$FNMA #FANNIEGATE

The parties submitted their papers to Chief Judge Sweeney yesterday, recommending they ask the Federal Circuit to answer six questions.  Fairholme wants the Federal Circuit to say:

     (A) Whether Plaintiffs’ direct claims for breach of fiduciary duty sound in tort, and are thus outside this Court's Tucker Act jurisdiction;

     (B) Whether, for purposes of the Court’s jurisdiction, Plaintiffs are third-party beneficiaries of implied-in-fact contracts between the Government and the GSE's; and

     (C) Whether Plaintiffs who purchased GSE stock after the Third Amendment have standing to litigate their direct takings claims;

and the government wants the appellate court to answer these three questions:

     (1) Whether plaintiffs have standing to assert derivative claims notwithstanding the succession clause contained in HERA;

     (2) Whether actions by FHFA as conservator for Fannie Mae and Freddie Mac are attributable to the United States such that the Court possesses subject-matter jurisdiction to entertain plaintiffs' derivative takings and illegal exaction claims; and

     (3) Whether plaintiffs' allegations that FHFA entered into an implied-in-fact contract with the Enterprises to operate the conservatorships for shareholder benefit fail as a matter of law;

in an effort to materially advance the litigation in the U.S. Court of Claims challenging the Net Worth Sweep.

13-465-0456Download

13-465-0457Download

Copies of the parties' filings are attached to this e-mail message.