At page 22 (PDF page 45) of its amended omnibus motion to dismiss (Doc. 421) filed in Fairholme v. U.S. on Oct. 1, 2018, the government provides Judge Sweeney with a long list of cases saying Fannie, Freddie and FHFA are not government actors.  As you’ve likely read in the past couple of weeks, that uniform holding was disrupted by a decision in a foreclosure-related lawsuit in Rhode Island in August.

FHFA wants the U.S. Court of Appeals for the First Circuit to review a recent decision by the Honorable John J. McConnell, Jr., in Sisti v. FHFA, ___ F. Supp. 3d ___, 2018 WL 3655578, slip op. https://ecf.rid.uscourts.gov/cgi-bin/show_public_doc?2017cv0005-39 (D. R.I. Aug. 2, 2018), holding that FHFA is a government actor for purposes of evaluating due process rights and claims under the Fifth Amendment of the U.S. Constitution.  Judge McConnell concluded that Fannie Mae, Freddie Mac and FHFA can be found to be government actors for purposes of a due process claim.  Judge McConnell’s analysis and conclusion differs from dozens of other court rulings saying the opposite.

FHFA says immediate appellate review of Judge McConnell’s decision is appropriate because (i) it involves a controlling question of law, (ii) there is substantial ground for difference of opinion, and (iii) an immediate appeal from the order could materially advance the ultimate termination of the litigation.

Opposing FHFA’s request for immediate review of Judge McConnell’s analysis of the law at this early juncture, Mmes. Sisti and Boss say FHFA’s appeal should occur after a trial.  Mmes. Sisti and Boss argue they shouldn’t be forced to engage in burdensome piecemeal litigation.

In a reply filed today, FHFA counters that the question about whether or not the housing finance trio are government actors is a purely legal question, therefore militating in favor of immediate certification to and review by the First Circuit prior to a trial in the District Court.

Copies of the briefs urging and opposing an immediate appeal to the First Circuit to answer the narrow question about whether FHFA and its wards are government actors are attached to this e-mail message.  Judge McConnell will issue his decision about whether to permit or deny FHFA’s interlocutory appeal in the coming days, weeks, or months. 17-cv-00005-0041 17-cv-00005-0047 17-cv-00005-0045