Fanniegate · Litigation Survey
Fannie/Freddie Shareholder Lawsuits
Every major case since the 2012 Net Worth Sweep — surveyed in plain English.
Perry Capital. Fairholme. Collins v. Yellen. The Berkley class action. Kelly. Joshua Angel. Six tracks. One sweep. $5T at stake.
6
Major case tracks
13 yrs
Of litigation
$612M
Berkley jury verdict
Live
DC Circuit appeal
In August 2012, Treasury and FHFA executed the Third Amendment to the Fannie Mae and Freddie Mac Senior Preferred Stock Purchase Agreements — the "Net Worth Sweep." Every dollar of net worth at each Enterprise, every quarter, in perpetuity, would flow to Treasury. Junior preferred and common shareholders — many of whom had bought after the conservatorship in reliance on contractual rights — got nothing.
Almost every major shareholder lawsuit since then is, at root, an attack on the Net Worth Sweep under a different legal theory. Below is the map.
The Six Major Tracks
Perry Capital v. Lew (later Mnuchin)
Mostly lost on appealJul 2013 · U.S. District Court, D.C. → D.C. Circuit · 864 F.3d 591 (D.C. Cir. 2017)
What
The first major institutional challenge to the August 2012 Third Amendment / Net Worth Sweep. Hedge funds and shareholders sued FHFA and Treasury for breach of contract, breach of fiduciary duty, and violations of the Administrative Procedure Act (APA).
Holding
The D.C. Circuit ruled FHFA's HERA conservator powers were broad enough that the Net Worth Sweep was inside the agency's authority. APA review was barred by 12 USC § 4617(f). State-law contract and fiduciary claims survived for some plaintiffs and went back to the district court for further proceedings — those eventually folded into the consolidated class action.
Why it matters
Established the legal frame for everything that came after. The 2017 affirmance was a major setback for shareholders on the APA path. Forced future litigation toward Tucker Act / takings claims at the Court of Federal Claims.
Fairholme Funds v. United States
Lost at Federal Circuit, cert deniedJul 2013 · Court of Federal Claims → Federal Circuit · 26 F.4th 1274 (Fed. Cir. 2022), cert. denied 143 S.Ct. 563
What
Tucker Act companion case to Perry. Bruce Berkowitz's Fairholme alleged a Fifth Amendment taking and breach of contract over the Net Worth Sweep. Litigated in the CFC by Senior Judge Sweeney across nearly a decade of discovery battles.
Holding
Federal Circuit held the government 'owed no fiduciary duties to the shareholders under HERA.' Direct shareholder claims for illegal exaction were largely held derivative — meaning the Enterprises (under conservatorship by FHFA) were the proper plaintiffs, not individual shareholders. Cert denied 2022.
Why it matters
Fairholme's loss is the precedent every subsequent shareholder case has had to fight against — including Joshua Angel's. The 'derivative claim' framing is the doctrinal lock that's kept individual takings cases out of the CFC.
Collins v. Yellen (formerly Mnuchin)
Constitutional win, no remedySep 2016 · U.S. Supreme Court · 594 U.S. 220 (2021)
What
Texas-based shareholders argued FHFA's single-director-removable-only-for-cause structure was unconstitutional under the separation of powers. The case piggybacked on Seila Law (CFPB) doctrine.
Holding
Supreme Court held 7-2 that FHFA's structure violated the separation of powers. But the Court declined to invalidate the Net Worth Sweep itself, sending the question of whether the unconstitutional removal protection caused compensable harm back to the lower courts.
Why it matters
Constitutional victory for shareholders that didn't put any money back in their pockets. The remedy question went back to the Fifth Circuit and the Court of Federal Claims — and eventually fueled the Berkley class-action damages theory.
Berkley Insurance / Class Action (consolidated)
On appeal — D.C. Circuit oral argument heard Apr 21, 20262013-2018 (consolidated) · U.S. District Court, D.C. (Lamberth) → D.C. Circuit (on appeal) · Class Action Nos. 13-cv-1053, 13-cv-1149 (D.D.C.); No. 25-5113 (D.C. Cir.)
What
The big one. State-law contract and implied-covenant claims that survived Perry got consolidated under Judge Lamberth in D.C. Went to a jury trial in 2022. The jury found for shareholders. FHFA appealed.
Holding
Aug 2023: jury verdict for the class on breach of the implied covenant of good faith and fair dealing. Damages: roughly $612M total. FHFA / Treasury appealed. April 21, 2026: D.C. Circuit oral argument heard by Walker, Childs, Ginsburg. Opinion expected Jul 2026 - Jan 2027.
Why it matters
This is the case that put real money on the table and proved the contractual claims have weight. If the jury verdict survives appeal, every junior preferred holder benefits — and the framework for resolving the conservatorship gets a lot clearer.
Kelly v. United States
On appeal — Federal Circuit2022 · Court of Federal Claims → Federal Circuit · Fed. Cir. (oral argument heard 2026)
What
Direct takings-clause case in the CFC arguing the Net Worth Sweep was a Fifth Amendment taking of preferred shareholders' contractual property rights, distinct from the derivative path Fairholme failed on.
Holding
Pending. Currently on appeal at the Federal Circuit after the CFC dismissed at the trial level. Oral argument heard 2026.
Why it matters
If Kelly survives the derivative-claim doctrine that killed Fairholme, it opens a direct-takings path back to the CFC for individual shareholders. Long shot, but live.
Joshua Angel v. United States (Angel I-V)
Dismissed with prejudice + anti-filing injunction (Apr 23, 2026)2018-2025 · D.C. District / Circuit + Court of Federal Claims · 815 F. App'x 566 (D.C. Cir. 2020); 165 Fed. Cl. 453 (2023); 172 Fed. Cl. 102 (2024); No. 25-cv-2040 (Fed. Cl. 2025)
What
Five pro se complaints filed by attorney Joshua Angel — junior preferred shareholder — across two federal courts. Theories: breach of the certificate of designation, breach of the federal government's implicit guaranty, illegal exaction of MBS-litigation proceeds, and § 1124 declaratory relief that the preferreds are mandatorily redeemable.
Holding
Apr 23, 2026: Judge Meriweather dismissed Angel V with prejudice and entered an anti-filing injunction barring further filings without leave from the Chief Judge. Apr 27, 2026: Angel filed a 36-page motion for reconsideration arguing the court got the Trump-statement timeline factually wrong.
Why it matters
Angel's track is parallel to (not part of) the Berkley class. His implicit-guaranty theory — newly bolstered by Trump's May 2025 'implicit GUARANTEES' Truth Social post — is being tested separately. The anti-filing injunction effectively closes the CFC door on his pro se path.
Frequently Asked Questions
How many shareholder lawsuits are there over Fannie Mae and Freddie Mac?
Dozens of complaints have been filed since the 2012 Net Worth Sweep, but they've consolidated into a smaller number of major tracks: Perry Capital (D.C. APA), Fairholme (CFC takings), Collins (Supreme Court constitutional structure), the Berkley / consolidated class action (D.C. district court → D.C. Circuit on appeal), Kelly (Federal Circuit takings), and Joshua Angel's five pro se complaints. This page surveys all six of those tracks.
What is the Net Worth Sweep and why is it the focus of every lawsuit?
On August 17, 2012, Treasury and FHFA executed the 'Third Amendment' to the Senior Preferred Stock Purchase Agreements. It replaced a fixed 10% dividend with a sweep of 100% of each Enterprise's net worth (minus a small reserve) every quarter, in perpetuity. Every shareholder lawsuit since then is, at root, a challenge to the Net Worth Sweep — under different legal theories. Contract law, takings clause, fiduciary duty, implied covenant, and now (post-Trump's May 2025 statement) implicit guaranty.
Which case is the biggest deal for shareholders right now?
The Berkley / consolidated class action. The August 2022 jury verdict in front of Judge Lamberth was the first time shareholders won real money — about $612M on the implied-covenant theory. FHFA appealed to the D.C. Circuit, which heard oral argument April 21, 2026. The opinion is expected between July 2026 and January 2027. If the jury verdict survives, it's the biggest legal win for GSE preferred holders in over a decade.
Who is Joshua Angel and how does his case differ?
Joshua Angel is a New York attorney and junior preferred shareholder who has filed five separate pro se complaints (Angel I through Angel V) across two federal courts since 2018. He's not part of the Berkley class — he chose to litigate his own theories independently, including a particularly aggressive 'implicit guaranty' argument. On April 23, 2026, the Court of Federal Claims dismissed Angel V with prejudice and entered an anti-filing injunction. On April 27, 2026, he filed for reconsideration. Full case tracker: /joshua-angel-v-united-states.
What did Collins v. Yellen actually decide?
Collins held that FHFA's structure — single director removable only for cause — was unconstitutional under the separation of powers. But the Supreme Court declined to undo the Net Worth Sweep as a remedy. The case got remanded for the lower courts to figure out what damages, if any, the unconstitutional removal protection caused. That damages question fed into the Berkley class action and remains live in 2026.
Why did Fairholme lose?
Two reasons. First, the Federal Circuit held the government 'owed no fiduciary duties to the shareholders under HERA' — so fiduciary-duty claims failed at the threshold. Second, the court held that most of the takings claims were 'derivative' — meaning they belonged to the Enterprises (which are under FHFA conservatorship) rather than to individual shareholders. That derivative-claim doctrine is the doctrinal lock that's kept individual CFC takings cases (including Joshua Angel's) from succeeding.
What's the most important legal question still unresolved?
Whether the August 2022 jury verdict in the Berkley class action survives D.C. Circuit appeal. If it does, the framework for ending the conservatorship and recapitalizing Fannie and Freddie shifts dramatically — junior preferreds get reinstated as part of the recap math, and the path to par becomes much clearer. Glen's read on the April 21, 2026 oral argument: bullish-leaning. The recap is at /blog/fannie-freddie-dc-circuit-oral-argument-recap-april-21-2026.
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