Federal Housing Financing Agency v. City of Chicago
962 F. Supp. 2d 1044
N.D. Ill.2013Background
- FHFA sued City of Chicago challenging July 2011 ordinance requiring mortgagees to register vacant buildings and maintain them; FHFA seeks preemption and tax immunity rulings.
- FHFA is the conservator for Fannie Mae and Freddie Mac under HERA and acts on their behalf in litigation.
- Chicago ordinance amended Chapter 13-12 to require mortgagees to register vacant buildings within set timeframes, renew registrations, and comply with maintenance standards, including a $500 base fee.
- FHFA alleges the ordinance directly targets FHFA and mortgagees through servicer payments and reimbursements, compelling FHFA to bear costs related to vacant properties.
- The court denied the City’s motion to dismiss and granted FHFA’s summary-judgment request on preemption/ immunity grounds, after addressing ripeness, standing, and authority questions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Express preemption of the ordinance under HERA § 4617(a)(7). | FHFA as conservator is subject to no state or local direction. | § 4617(a)(7) covers federal agencies and states, not municipalities. | Preemption does not rest on local governments; express preemption does not extend to Chicago. |
| Implied preemption: field preemption. | HERA occupies the field governing FHFA’s conservatorship over Fannie/Freddie. | Local regulation like Chicago’s ordinance lies outside the field. | Court finds field preemption since FHFA governs assets and operations of Fannie/Freddie. |
| Implied preemption: conflict preemption. | Ordinance obstructs Congress’s objectives by imposing costs and requirements on FHFA. | Overlap with FHFA guidelines means no obstacle to Congress’s aims. | Conflict preemption established; ordinance stands as obstacle to federal objectives. |
| FHFA standing/authority to sue given appointment validity. | Acting Director DeMarco validly appointed; FHFA may sue to protect assets. | Appointment may violate Appointments Clause; no standing. | Acting Director DeMarco valid; FHFA had authority to bring suit. |
| Tax immunity of FHFA re registration fee. | Registration fee is a tax impermissibly targeting the federal government. | Fee is a regulatory charge to defray city costs. | Registration fee is an impermissible tax under FHFA immunity. |
Key Cases Cited
- Mortier v. Mortier, 501 U.S. 597 (U.S. 1991) (express preemption requires clear statement; local preemption not assumed)
- City of Joliet v. New West Enterprises, 562 F.3d 830 (7th Cir. 2009) (land-use preemption considerations; not controlling here but relevance to preemption analysis)
- Hillsborough Cnty. v. Automated Med. Labs., 471 U.S. 707 (U.S. 1985) (premise that federal vs. local regulation analysis is guided by Supremacy Clause)
- Gade v. Nat’l Solid Wastes Mgmt. Ass’n, 505 U.S. 88 (U.S. 1992) (preemption analysis; field preemption considerations)
- Crosby v. Nat’l Foreign Trade Council, 530 U.S. 363 (U.S. 2000) (preemption analysis; statutory purpose and effects matter)