It is interesting to think about. Whether it's fair or not the courts in this country are extremely politically motivated. The 5th circuit en banc panel is made up of 12 conservatives and 5 democrats. 6 of those conservatives are also fresh Trump appointees. Before it was shareholders vs Trumps DOJ, today it's shareholders vs Bidens DOJ and Trump is publicly siding with shareholders. 9 of those judges were already ok siding with shareholders that the NWS was illegal, 7 of them were ok saying the remedy for a constitutional violation was to vacate the NWS.
If you read the en banc majority ruling re: unconstitutional remedy closely, the 9 judges who ruled against vacating the NWS claimed to do so because President Trump wasn’t opposed to the NWS as one of their main points so they believed only prospective relief to be appropriate… This rationale is completely disproven by the recent Trump letter as well as the fact that the ruling was written in September 2019 and the admin promptly ended the cash payments of the NWS shortly after the ruling was released with the Trump picked Calabria/Mnuchin duo in charge. How can those 9 judges square that ruling with the Trump letter and SCOTUS instructions re: shareholders being entitled to retrospective remedy if Trumps agenda was aggravated by the unconstitutional provision?
Trump and SCOTUS have given the greenlight to the conservative judges to rule infavor of shareholders like never before. the long wait is over. the 5th circuit en banc WILL deliver. in Willet we trust
The 5th circuit en banc pretty straight forward. The same 16 judges that previously ruled in favor of shareholders that the NWS was illegal, now have another shot at the apple due to the SCOTUS opinion (technically now 17 judges with another trump appointee in the mix). They have to decide if because Trump couldn't fire Watt, are shareholders entitled to relief? And according to SCOTUS a public statement by Trump expressing that he wanted to fire Watt but couldn't would confirm this. Enter the Trump letter... Trump claims if he could have fired Watt day 1, he would have done so and would have had 4 years to complete recap and release instead of 2 and would have monetized the governments stake for billions of dollars. Shareholders argue that if that's the case, bc Trump couldn't fire Watt day 1, we are entitled to remedy to put us back into a position as if Trump could have fired him from day 1 but wasnt allowed to due so because of the unconstitutional removal provision.
Depending on how the court rules, possibly a 10 if the judges agree the Trump letter satisfies the SCOTUS requirement to prove shareholders were harmed and are entitled to remedy, possibly a 0 if they don't and case gets dismissed, possibly a 5 if further testimony is required (maybe get Mnuchin and Calabria to comment on the situation but I would think Trump's voice is most relevant here and he already opined what he would have done had it not been for the removal restriction).
The ideal ruling would read "We order the district court to enter an injunction placing Plaintiffs in the position they would be in absent the unconstitutional removal restriction."
Gorsuch's concurring in part/dissenting in part SCOTUS opinion further highlights that the 5th circuit SHOULD acknowledge the Trump letter as evidence that shareholders are entitled to relief...
"Instead of applying our traditional remedy for constitutional violations like these, the Court supplies a novel and feeble substitute. The Court says that, on remand in this suit, lower courts should inquire whether the President would have removed or overruled the unconstitutionally insulated official had he known he had the authority to do so. So, if lower courts find that the President would have removed or overruled the Director, then the for-cause removal provision “clearly cause[d] harm” and the Director’s actions may be set aside."
The lower courts no longer need to "inquire" as Trump provided them with that evidence.
"Consider the guidance the Court offers ... To ascertain with any degree of confidence the President’s state of mind regarding the Director, don’t we need testimony from him or his closest staff?"
Well.. we got exactly the testimony Gorsuch claimed was most important.
There are only TWO possible logical remedies I can think of:
1) The first would be Plaintiffs ideal remedy request, to put shareholders back into position they would have been if Trump had 4 years to complete GSE privatization and monetized the government's stake for billions. Jr pfds should get made whole in this scenario ($25/shr), and I have no idea how to calculate value for common in this scenario.
2) This remedy is much more straightforward and should be a worst case scenario if Judges agreed we are entitled to remedy. While judges can disagree that privatization would have been hypothetically completed in time, it is no hypothetical that under Calabria not 1 cash NWS payment was made to the government as it all stayed on the GSEs balance sheet under his and Mnuchins orders. So at a minimum the judges should reverse Watt's implementation of the NWS for 2 years that saw ~$45b move over from GSEs to the government. If Calabria was in that seat day 1 that $45b would still be on the GSE balance sheet taking total capital from ~$67b today to ~$112b (will be $120b shortly as this quarter is pretty much over). More importantly it will require the government to write a cash check for $45b to fulfill this remedy obligation which might prompt settlement.
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