Following up on this post, the challengers have filed a petition for writ of certiorari in Collins v. Mnookin, the case challenging the constitutionality of the Federal Housing Finance Agency (FHFA) on the ground that its director can be removed by the President only for cause. At Volokh Conspiracy, Jonathan Adler explains: Shareholders Challenging FHFA's Constitutionality Want Supreme Court to Hear Their Case—Even Though They Won. From the introduction:
Several shareholders of Fannie Mae and Freddie Mac were unhappy with actions taken by the Federal Housing Finance Agency (FHFA) that greatly diminished the value of their shares. The shareholders sued, alleging (among other things) that the FHFA is unconstitutional because its Director is insulated from Presidential control because the director may only be removed for "cause."
Last summer, a divided panel of the U.S. Court of Appeals for the Fifth Circuit agreed with the shareholders' claim. Earlier this month, the entire Fifth Circuit, sitting en banc, agreed (albeit in a highly splintered opinion), affirming the panel's opinion that the limitations on the removal of the FHFA's Director violates the separation of powers.
Despite their victory, the shareholders filed a petition for certiorari last week, asking the Supreme Court to review the Fifth Circuit's decision. Why would a prevailing party do such a thing? In this case, because the shareholders are unsatisfied with the remedy provided by the Fifth Circuit's decision.
A majority of the en banc court found that the FHFA Director's for-cause removal protection infringes upon the President's ability to supervise the agency and ensure that it faithfully executes its legal obligations. A different majority of the en banc court held that the only remedy to which the shareholders were entitled was the prospective remedy of voiding the for-cause removal action. This left the shareholders unsatisfied because such a remedy does nothing to redress the injury—the devaluation of their shares in Fannie Mae and Freddie Mac—that was the basis of their suit.
Among other things, the Collins petition argues that the Fifth Circuit's holding on the for-cause director issue creates a split in authority with the Ninth Circuit's decision in Seila Law v. CFPB (discussed in my prior post, and also on petition to the Supreme Court) but that Collins is a better case for the Court to hear.
(Thanks to Peter Patterson for the pointer).
Posted at 6:42 AM