Atif Bhatti v. Federal Housing Finance Agency, 15 F.4th 848

In 2009 FHFA’s director resigned and Edward DeMarco served as Acting Director for ~4 years under the statutory acting-official provision; a presidential nomination for a permanent director stalled.
During DeMarco’s tenure FHFA (as conservator for Fannie Mae and Freddie Mac) and Treasury executed a third amendment to the Preferred Stock Purchase Agreements, including the “Net Worth Sweep” that effectively eliminated common shareholders’ value.
Three shareholders sued, alleging violations of the Appointments Clause, the separation of powers (removal restriction), and the nondelegation doctrine under the Housing and Economic Recovery Act, 12 U.S.C. § 4617.
The district court dismissed for lack of standing and on the merits. The Eighth Circuit reviewed the case in light of the Supreme Court’s decision in Collins v. Yellen.
The court held shareholders have Article III standing for retrospective relief, rejected Appointments Clause-based relief because of the de facto officer doctrine and ratification, found the statutory removal restriction unconstitutional, and upheld the statute against a nondelegation challenge.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Standing to challenge third amendment	Shareholders suffered concrete injury traceable to the third amendment and can obtain retrospective relief	FHFA argued lack of traceability, mootness by later amendment, and succession-bar to relief	Standing exists for retrospective but not prospective relief (Collins controls)
Validity of Acting Director’s tenure; remedy for Appointments defect	DeMarco overstayed a permissible acting term; his acts are invalid and require relief	De facto officer doctrine and subsequent directors’ ratification validate actions	De facto doctrine bars relief; ratification cures any defect; no appointment-based voiding of the amendment
Separation of powers: removal restriction on FHFA Director	Removal restriction (for-cause) unlawfully limits President’s removal power and voids actions taken under it	FHFA argued removal limits permissible under precedent and do not require relief here	For-cause removal restriction violates separation of powers; remanded to determine whether shareholders suffered compensable retrospective harm
Nondelegation: 12 U.S.C. § 4617 delegation	Statute gives FHFA unacceptably broad discretion without intelligible principle	Statute supplies clear conservatorship goals and standards (rehabilitate, preserve/conserve assets)	Delegation meets intelligible-principle standard; nondelegation claim dismissed

Collins v. Yellen, 141 S. Ct. 1761 (2021) (Supreme Court decision governing standing, ratification, and remedy questions)
Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (standing requirements)
Ryder v. United States, 515 U.S. 177 (1995) (de facto officer doctrine)
Norton v. Shelby County, 118 U.S. 425 (1886) (historical roots of de facto officer doctrine)
Selia Law, LLC v. CFPB, 140 S. Ct. 2183 (2020) (limits on removal restrictions for single-director independent agencies)
Gundy v. United States, 139 S. Ct. 2116 (2019) (intelligible-principle standard for nondelegation)
Mistretta v. United States, 488 U.S. 361 (1989) (delegation and intelligible principle)
National Broadcasting Co. v. United States, 319 U.S. 190 (1943) (example of broad-but-sufficient intelligible principle)
Saxton v. Fed. Hous. Fin. Agency, 901 F.3d 954 (8th Cir. 2018) (Eighth Circuit analysis upholding statutory conservatorship delegation)