Saxton v. Federal Housing Finance Agency, No. 17-1727 (8th Cir. 2018)
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Plaintiffs, three shareholders, filed suit claiming that the federal agency Congress created to serve as conservator of Fannie Mae and Freddie Mac exceeded its powers under the Housing and Economic Recovery Act (HERA) and acted arbitrarily and capriciously by agreeing to a "net worth sweep."
The Eighth Circuit joined four sister circuits that have already rejected materially identical arguments from other shareholders. The court interpreted the anti-injunction provision to apply only to equitable relief, and only where FHFA has acted within its statutory powers. Such a reading was consistent with the presumption of reviewability. The court held that FHFA did not exceed its powers in assenting to the net worth sweep and thus HERA's anti-injunction provision was applicable.
Court Description: Kelly, Author, with Benton and Stras, Circuit Judges] Civil case - Housing and Economic Recovery Act. In action by three owners of Fannie Mae and Freddie Mac common stock against the Federal Housing and Finance Agency and the U.S. Treasury alleging the agencies exceeded their powers under the Housing and Economic Recovery Act and acted arbitrarily and capriciously by agreeing to a "net worth sweep" (whereby Fannie and Freddie each quarter pay to Treasury their entire net worth, minus a small buffer), this court joins four other circuits which have rejected similar suits from other shareholders. Judge Stras, concurring.
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