Thomas Saxton v. Federal Housing Finance Agency
901 F.3d 954
8th Cir.2018Background
- In 2008 Congress enacted HERA, creating the FHFA with authority to serve as conservator or receiver of Fannie Mae and Freddie Mac when they become critically undercapitalized.
- FHFA placed both entities into conservatorship and entered funding agreements with the Treasury to stabilize them.
- Treasury and FHFA amended their agreement to implement a quarterly "net worth sweep" directing Fannie and Freddie to pay virtually all net worth to Treasury.
- Three shareholders sued FHFA and Treasury seeking only injunctive relief to set aside the net worth sweep, alleging FHFA exceeded its HERA authority and acted arbitrarily and capriciously.
- The district court dismissed the suit; the Eighth Circuit reviews de novo and joins other circuits in affirming dismissal, holding HERA’s anti‑injunction provision bars equitable relief because FHFA acted within its statutory authority.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does HERA’s anti‑injunction provision bar equitable relief against FHFA acting as conservator? | §4617(f) should be narrowly construed; courts may enjoin conservator action that exceeds statutory powers. | §4617(f) bars injunctions affecting FHFA’s conservatorship functions so long as FHFA acts within its statutory powers. | Anti‑injunction provision applies to equitable relief and bars the suit because FHFA acted within its HERA powers. |
| Did FHFA exceed its statutory conservatorship powers by agreeing to the net worth sweep? | The net worth sweep is contrary to a conservator’s duty to preserve and conserve assets and therefore ultra vires. | HERA grants broad, permissive "may" powers and allows actions that the FHFA determines are in the best interests of the entity or FHFA itself. | FHFA did not exceed its authority; the sweep falls within the broad discretionary powers HERA grants. |
| Can courts use the presumption of reviewability to interpret §4617(f) to allow judicial relief here? | The presumption of reviewability requires a narrow reading of jurisdiction‑limiting statutes so shareholders can obtain relief for ultra vires acts. | The statute’s text and structure show Congress intended to limit equitable relief against conservator actions within statutory authority. | The court accepts a limited presumption: §4617(f) bars only equitable relief and only when challenged conduct is within FHFA’s statutory powers. |
| Can Treasury be enjoined from participating in the sweep when FHFA’s action is authorized? | An injunction against Treasury would avoid FHFA’s anti‑injunction bar because it would restrain Treasury, not FHFA. | An injunction on Treasury would necessarily affect FHFA’s exercise of conservatorship powers and is therefore barred by §4617(f). | Injunction against Treasury is barred because it would restrain or affect FHFA’s conservatorship functions and FHFA acted within its authority. |
Key Cases Cited
- Perry Capital LLC v. Mnuchin, 864 F.3d 591 (D.C. Cir. 2017) (construing HERA and holding FHFA acted within statutory authority)
- Collins v. Mnuchin, 896 F.3d 640 (5th Cir. 2018) (addressing FHFA powers and related constitutional issues)
- Roberts v. Federal Housing Finance Agency, 889 F.3d 397 (7th Cir. 2018) (interpreting §4617(f) and FHFA conservatorship authority)
- Robinson v. Federal Housing Finance Agency, 876 F.3d 220 (6th Cir. 2017) (holding §4617(f) bars equitable relief when FHFA acts within statutory powers)
- Bowen v. Michigan Academy of Family Physicians, 476 U.S. 667 (1986) (presumption of reviewability in construing jurisdiction‑stripping statutes)