I’m hungry for what @carney is eating $FNMA #FANNIEGATE

Mr. Piszel’s complaint is about his employment contract with Fannie Mae.  GSE shareholders are complaining that Treasury is taking their money.  I think that’s a significant distinction with a material difference.

To me, there’s something odd about Judge Griggsby’s decision.  In one place she cites language from Hearts Bluff Game Ranch, Inc. v. United States, 669 F.3d 1326, 1330 (Fed. Cir. 2012) that says, “Where a citizen voluntarily enters into an area which from the start is subject to pervasive Government control, a property interest is likely lacking.”  That tells GSE shareholders you volunteered to own air.  But in another place she cites language from Connolly v. Pension Benefit Guar. Corp., 475 U.S. 211, 223-24 (1986), saying, “Contracts, however express, can not fetter the constitutional authority of Congress. . . .  Parties cannot remove their transactions from the reach of dominant constitutional power by making contracts about them.”) (quoting
Norman v. Balt. & Ohio R.R. Co., 294 U.S. 240, 307-08 (1935)).  To GSE shareholders, that sounds like Mel Watt is being told that the Third Amendments don’t trump HERA as he (probably inarticulately) indicated when testifying before a Congressional Committee not too long ago.  I’m surprised by Judge Griggsby’s frequent references to Judge Lamberth’s decision in Perry v. Lew, knowing, undoubtedly, that Judge Lamberth’s decision is under appeal.

If the government thinks the Piszel decision is a silver bullet that silences complaining shareholders, you can be certain that the lawyers in the Justice Department will rush a copy of the ruling to Judge Sweeney’s chambers without hesitation or delay.  If Fairholme (or another shareholder-plaintiffs) likes something in the Piszel decision, they’ll let Judge Sweeney know about their enthusiasm too.  If I were serving as counsel to either the Government or a GSE shareholder, I think I’d probably pass on trying to apply the Piszel decision to the cases before Judge Sweeney.

I suspect Mr. Carney would urge the Justice Department to use today’s decision by Judge Griggsby as bait to try to suck Judge Sweeney into yet one more sideshow.