Nicolai v. Federal Housing Finance Agency
928 F. Supp. 2d 1331
M.D. Fla.2013Background
- Nicolai filed a Florida case alleging Fannie Mae, Freddie Mac, and FHFA failed to pay Florida transfer tax and seeking statutory interest and damages.
- Defendants moved to dismiss; Nicolai opposed; Court granted the motion to dismiss with prejudice.
- Florida Transfer Tax is an excise tax; dispute centers on whether exemption statutes for the Enterprises and FHFA shield them from this tax.
- Exemption statutes exempt the entities from 'all taxation' but carve out real property taxes; the transfer tax is argued to be covered as an excise tax on an entity's actions.
- Courts rely on Hertel, Hager, and Bismarck to interpret 'all taxation' as applying to excise taxes levied on entities, not just direct property taxes.
- Court distinguishes Oakland v. FHFA but holds Hertel, Hager, and Bismarck provide the controlling framework; amendment would be futile.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Transfer Tax falls within the Exemption Statutes | Exemption applies only to direct taxes; Transfer Tax excise tax not within exemption. | Exemption covers all taxation, including excise taxes; transfer tax falls within exempted 'all taxation'. | Transfer Tax exempt; dismissal with prejudice. |
| Nicolai's standing to sue | State authority allocates transfer tax duties to the Department of Revenue; Nicolai has standing as to authority. | Not necessary; court should dismiss on substantive issues. | Nicolai has sufficient authority to bring action; survives threshold challenge. |
| Amendment to address direct vs. excise tax distinction | Leave to replead to address the distinction. | Amendment would be futile given controlling authorities. | Amendment would be futile; case dismissed with prejudice. |
Key Cases Cited
- Wells Fargo Bank, N.A. v. United States, 485 U.S. 351 (1988) (exemption of property from all taxation does not necessarily include excise taxes; 'property' focus)
- Federal Land Bank of St. Paul v. Bismarck Lumber Co., 314 U.S. 95 (1941) (unqualified term 'taxation' encompasses excise taxes when exemptions apply to entities, not property)
- Hertel v. Bank of Am., N.A., 897 F. Supp. 2d 579 (W.D. Mich. 2012) (supports reading exemption statutes as applied to entities and excise taxes)
- Hager v. Fed. Nat’l Mortg. Ass’n, 882 F. Supp. 2d 107 (D.D.C. 2012) (broad exemption from taxation for Enterprises and FHFA; excise taxes addressed)
- Oakland v. Federal Housing Finance Agency, 871 F. Supp. 2d 662 (E.D. Mich. 2012) (similar case; court notes distinction but not controlling)