Replies to post #744057 on Fannie Mae-No Politics (FNMA)

[Robert from yahoo bd]

I finally reread parts of the Fairholme Funds and consolidated cases 3 Judge Panel opinion (I think it was 3-0 to deny Plaintiffs Shareholders even a trial on the 5th Amendment Takings Cases) from last February 2022, here's some quotes in quotation marks from last year of what that opinion said which is now the unequivocal law of the land when it comes to Takings Clause case lawsuits involving regulated financial institutions in Amerika.

Here's some rough observations I gleaned from the opinion.

1. Basically financial institutions regulated by the federal government can't exclude the federal government from coming on their property and inspecting their books, therefore no right of exclusive use of their property therefore no taking (but that's about physical real property not the economic rights property inherent in shares of stock, right? Good enough for Gubmint work though apparently, WE'RE TALKING A 5TH AMENDMENT BILL OF RIGHTS HERE! Our Constitutional Rights steam rolled and ignored by the SCOTUS because we can't physically exclude the FHFA and UST employees from the physical property?):

"Here, Barrett's derivative takings claims allege that the net worth sweep constituted a regulatory taking because it deprived the Enterprises of "all economically beneficial uses" of their net worth. *1303 J.A. 464 (¶ 181); J.A. 465 (¶ 190). As a matter of law, Barrett fails to state a claim upon which relief may be granted. Supreme Court case law has long held that the right to exclude is an essential element of property ownership. See Loretto, 458 U.S. at 435-36, 102 S.Ct. 3164 ("The power to exclude has traditionally been considered one of the most treasured strands in an owner's bundle of property rights." (citation omitted)). And our case law is clear that regulated financial entities lack the fundamental right to exclude the government from their property when the government could place the entities into conservatorship or receivership. See Cal. Hous. Sec., Inc. v. United States, 959 F.2d 955, 958 (Fed. Cir. 1992) ("Saratoga lacked the fundamental right to exclude the government from its property at those times when the government could legally impose a conservatorship or receivership on Saratoga."); see also Golden Pac. Bancorp. v. United States, 15 F.3d 1066, 1074 (Fed. Cir. 1994) ("At those times when the Comptroller could legally inspect the Bank or place it in receivership, the Bank ... was unable to exclude the government from its property.")."

2. This seems a little bizarre as well, the opinion says when HERA was passed we lost our rights to exclude the federal government from our Economic Rights (wouldn't that be a Taking?):

"Because the Enterprises lacked the right to exclude the government from their net worth after the passage of HERA, and especially after the imposition of the conservatorship, they had no investment-backed expectation that the FHFA would protect their interests and not dilute their equity. We find, accordingly, that the Claims Court erred in failing to dismiss Barrett's derivative takings claim under Rule of the Court of Federal Claims 12(b)(6). While this logic applies equally to Barrett's derivatively pled illegal exaction claims, there are additional reasons his illegal exaction claim fails, which we address below."

"As of at least 2008, then, the Enterprises lost their right to exclude the government from their property, including their net worth. They also lost the right to complain if and when the FHFA chose to elevate its interests, and the interests of the public, above the interests of the Enterprises. Without this right to exclude, the Enterprises lack any cognizable property interest on which Barrett may base a derivative Fifth Amendment takings claim. See Golden Pac., 15 F.3d at 1074. This conclusion is bolstered, moreover, by the fact that the Enterprises consented to the conservatorship, and consented to one where the conservator had extremely broad statutory powers. Because the Enterprises lacked the right to exclude the government from their net worth after the passage of HERA, and especially after the imposition of the conservatorship, they had no investment-backed expectation that the FHFA would protect their interests and not dilute their equity. We find, accordingly, that the Claims Court erred in failing to dismiss Barrett's derivative takings claim under Rule of the Court of Federal Claims 12(b)(6). While this logic applies equally to Barrett's derivatively pled illegal exaction claims, there are additional reasons his illegal exaction claim fails, which we address below.[14]"

You know, I just roll my eyes upward in disbelief that the USSCT can let the biggest theft in US Corporate History go on right in front of everyone and deny the Plaintiff Shareholders their day in court on the issue!

[kthomp19]

The derivative claims were held in abeyance until the direct claims appeals were resolved.

Wrong. The derivative claims were dismissed by the CAFC, and since the Supreme Court denied cert they are 100% dead.

Does this mean the derivative claims can now proceed to trial?

Nope; see above.

The CAFC's ruling in February of last year dismissed all the derivative claims. Since the Supreme Court denied cert, that dismissal is now binding and cannot be challenged anymore. Note that Bryndon Fisher's case is included in this dismissal (see p. 5).

Because we conclude that the Claims Court correctly dismissed shareholders’ directly pled claims but erred in not dismissing shareholders’ derivatively pled allegations, we affirm-in-part and reverse-in-part.

The Kelly case is technically still alive, but since it is derivative takings claims similar to Barret, Fisher, etc. it will be dismissed in its entirety soon due to the precedent set by the CAFC and Supreme Court.



This also means the idiotic argument that Fisher's case could be amended to include a challenge to Treasury exercising the warrants can finally be put to bed. It was never possible to begin with, but it will be nice to not have to hear that particular bit of common nonsense anymore.