Description: Appellant Arnetia Joyce Robinson is a
stockholder in the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home
Loan Mortgage Corporation (“Freddie Mac”; collectively, the “Companies”). During the
economic recession in 2007–2008, Congress enacted the Housing and Economic Recovery Act
of 2008 (“HERA”), which created an agency, Appellee Federal Housing Finance Agency
(“FHFA”), and authorized FHFA to place the Companies in conservatorship. The Companies,
through FHFA as their conservator, entered into agreements with Appellee Department of the
Treasury (“Treasury”) that allowed the Companies to draw funds from Treasury in exchange for
dividend payments and other financial benefits. The Third Amendment to those agreements
modified the dividend payment structure and required the Companies to pay to Treasury, as a
quarterly dividend, an amount just short of their net worth. The Third Amendment effectively
transferred the Companies’ capital to Treasury and prevented dividend payments to any junior
stockholders, such as Robinson. Robinson brought suit against FHFA, its Director, and
Treasury, alleging that the Third Amendment violated the Administrative Procedure Act
(“APA”). The district court found that Robinson’s claims were barred by HERA’s limitation on
court action and that Robinson had failed to state a claim upon which relief can be granted. We
Fannie Mae and Freddie Mac are for-profit, stockholder-owned corporations organized
and governed by the federal government, pursuant to the Federal National Mortgage Charter Act,
12 U.S.C. §§ 1716–1723i, and the Federal Home Loan Mortgage Corporation Act, 12 U.S.C.
§§ 1451–1459, respectively. Private stockholders own and trade the Companies’ securities.1
1We discuss here only the factual details that are pertinent to Robinson’s claims. For more in-depth
discussion of the historical background of this case, please see Perry Capital LLC v. Mnuchin, 864 F.3d 591 (D.C.
Cir. 2017), petition for cert. docketed, No. 17-580 (Oct. 18, 2017).
No. 16-6680 Robinson v. Fed. Housing Fin. Agency, et al. Page 3
In 2008, during the economic downturn, Congress enacted the Housing and Economic
Recovery Act of 2008 (“HERA”), Pub L. No. 110-289, 122 Stat. 2654 (codified at scattered
sections of 12 U.S.C.), which created the Federal Housing Finance Agency (“FHFA”) and
authorized it to place the Companies in conservatorship or receivership under certain
circumstances. HERA authorized FHFA as the Companies’ conservator to “take such action as
may be—(i) necessary to put the [Companies] in a sound and solvent condition; and
(ii) appropriate to carry on the business of the [Companies] and preserve and conserve the assets
and property of the [Companies].” 12 U.S.C. § 4617(b)(2)(D). HERA also detailed a
“[l]imitation on court action,” stating that, “[e]xcept as provided in this section or at the request
of the Director, no court may take any action to restrain or affect the exercise of powers or
functions of [FHFA] as a conservator or a receiver.” Id. § 4617(f). Moreover, HERA amended
the Companies’ charters to temporarily authorize Treasury to “purchase any obligations and
other securities issued by the [Companies] . . . .” 12 U.S.C. §§ 1455(l)(1)(A), 1719(g)(1)(A).
HERA also provided that the “Secretary of the Treasury may, at any time, exercise any rights
received in connection with such purchases.” Id. §§ 1455(l)(2)(A), 1719(g)(2)(A). The
authority to purchase the Companies’ securities expired on December 31, 2009. Id.
§§ 1455(l)(4), 1719(g)(4).
FHFA placed the Companies into conservatorship on September 6, 2008, and one day
later Treasury entered into materially identical Preferred Stock Purchase Agreements (“PSPAs”)
with each of the Companies. Under the original PSPAs, Treasury committed to provide up to
$100 billion in funding to each of the Companies. In exchange, Treasury received one million
shares of government stock2 in each of the Companies and warrants to purchase 79.9% of the
common stock of each of the Companies at a nominal price. Treasury’s government stock had
an initial liquidation preference of $1 billion for each company. Treasury’s liquidation
preference increased proportionately (dollar for dollar) to the amount that the Companies
withdrew from Treasury pursuant to the PSPAs. In addition to the liquidation preference, the
PSPAs provided that Treasury would receive a cumulative cash dividend equal to 10% of the
2Robinson refers to Treasury’s “government stock” throughout her complaint and we adopt that convention
to refer to the Variable Liquidation Preference Senior Preferred Stock granted to Treasury by the PSPAs.
No. 16-6680 Robinson v. Fed. Housing Fin. Agency, et al. Page 4
value of the outstanding liquidation preference or an in-kind government-stock dividend.3 The
PSPAs prohibited the Companies from paying dividends on any securities junior to Treasury’s
government stock unless full cumulative dividends had been paid to Treasury for all current and
past dividend periods.
On May 6, 2009, Treasury and the Companies, through FHFA, entered into the First
Amendment to the PSPAs, which increased Treasury’s total commitment to each of the
Companies from $100 billion to $200 billion. On December 24, 2009, the parties executed the
Second Amendment to the PSPAs, which again increased Treasury’s funding commitment to the
Companies. The Second Amendment established a formula that allowed Treasury’s total
commitment to each of the Companies to exceed (but not fall below) $200 billion depending
upon any financial deficiencies the Companies experienced in 2010–2012 and any surplus
existing as of December 31, 2012.
By August 2012 (and as of December 2015, the date the amended complaint was filed),
the Companies had drawn approximately $187 billion from Treasury, and—including the
initial $1 billion liquidation preference from each of the Companies—Treasury held a total of
$189 billion in liquidation preference between the Companies. The Companies drew
approximately $26 billion of that combined amount from Treasury to pay the 10% cumulative
dividends owed to Treasury under the PSPAs.
The focus of this litigation is a third amendment to the PSPAs. On August 17, 2012,
Treasury and the Companies, through FHFA, agreed to the Third Amendment, which replaced
the previous dividend formula with a requirement that the Companies pay to Treasury a quarterly
dividend equal to their entire net worth minus a diminishing capital reserve amount. Robinson
refers to this portion of the Third Amendment as the “Net Worth Sweep.”4 The quarterly
dividend payments do not reduce Treasury’s outstanding liquidation preference or operate to
3The original PSPAs also provided that the Companies would pay to Treasury a quarterly periodic
commitment fee to fully compensate Treasury for its ongoing financial commitment. Treasury had the option to
waive the fee and repeatedly exercised that option. The periodic commitment fee was never requested under the
PSPAs and never paid to Treasury.
4The Third Amendment also eliminated the requirement that the Companies pay a periodic commitment
fee to Treasury.
No. 16-6680 Robinson v. Fed. Housing Fin. Agency, et al. Page 5
otherwise redeem any of Treasury’s government stock. The practical effect of the Net Worth
Sweep is that the majority of the Companies’ accumulated capital is delivered to Treasury each
quarter, Treasury’s liquidation preference and stock holdings remain the same, and private
stockholders are even less likely to receive a return on their investment while the Net Worth
Sweep is in place. Under the dividend structure in the Third Amendment, the Companies paid
Treasury approximately $186 billion between the first quarter of 2013 and the final quarter of
2015. Had the Companies instead paid the 10% cash dividends detailed in the original PSPAs,
the Companies would have paid Treasury approximately $57 billion over that same time period.
Robinson alleges that she has owned shares of the Companies’ common stock since
September 2008. Robinson argues that FHFA and Treasury agreed to the Third Amendment to
“[e]xpropriate” private stockholders’ investments and to “[e]nsure” that the Companies could not
exit conservatorship. Specifically, she alleges that “[t]he Net Worth Sweep . . . unlawfully
usurped nearly $130 billion from the Companies and sent it all into Treasury’s coffers,” and
“plainly prevents the Companies from operating in a sound and solvent manner by prohibiting
them from rebuilding their capital.” Robinson also alleges that “FHFA agreed to the Net Worth
Sweep only at the insistence and under the direction and supervision of Treasury,” abandoning
its responsibility to act independently as the Companies’ conservator.
In October 2015, Robinson filed suit in the United States District Court for the Eastern
District of Kentucky, seeking declaratory and injunctive relief against FHFA, Melvin Watt (the
Director of FHFA), and Treasury. She argued that the Third Amendment violated the
Administrative Procedure Act (“APA”), 5 U.S.C. § 706, because the Third Amendment
exceeded FHFA’s and Treasury’s statutory authority under HERA and Treasury’s conduct was
arbitrary and capricious. Robinson requested (1) a declaration that the Net Worth Sweep portion
of the Third Amendment violated HERA and Treasury acted arbitrarily and capriciously; (2) an
injunction requiring Treasury to return all payments received through the Net Worth Sweep or to
recharacterize such payments as a pay down of Treasury’s liquidation preference and redemption
of Treasury’s stock; (3) vacatur of the Net Worth Sweep portion of the Third Amendment; (4) an
injunction preventing FHFA and Treasury from enforcing the Net Worth Sweep; and (5) an
No. 16-6680 Robinson v. Fed. Housing Fin. Agency, et al. Page 6
injunction prohibiting FHFA from acting on the instructions of Treasury and from re-interpreting
its conservator duties under HERA.
Treasury filed a motion to dismiss under Federal Rules of Civil Procedure 12(b)(1) and
12(b)(6) for lack of jurisdiction and failure to state a claim, and FHFA and Watt filed a separate
but similar motion to dismiss on the same grounds. The district court granted both motions to
dismiss, finding that Robinson had failed to state a claim upon which relief could be granted.
The district court determined that Robinson’s claims were barred by HERA, which prohibits
courts from granting equitable relief affecting FHFA’s conduct as a conservator, and that
Robinson had not alleged that FHFA or Treasury acted beyond the scope of the statutory
authority granted by HERA. Robinson timely appealed the district court’s judgment.
This court reviews de novo the dismissal of Robinson’s APA claims. See Latin Ams. for
Soc. & Econ. Dev. v. Adm’r of Fed. Highway Admin., 756 F.3d 447, 462 (6th Cir. 2014).
HERA grants FHFA certain authority as the Companies’ conservator, and it imposes
certain limitations on review of FHFA’s actions. As relevant here, it explicitly limits judicial
review of claims that would hamper FHFA’s conduct as a conservator: “[N]o court may take any
action to restrain or affect the exercise of powers or functions of [FHFA] as a conservator or a
receiver.” 12 U.S.C. § 4617(f). Our court has not previously construed this particular limitation,
but this anti-injunction language is not new. Courts have interpreted nearly identical statutory
language—found in the Financial Institutions Reform, Recovery, and Enforcement Act of 1989
(“FIRREA”), 12 U.S.C. § 1821(j)—to bar claims for declaratory, injunctive, and other equitable
relief against an agency acting within its statutory authority as conservator. Courts have
construed this language to “effect a sweeping ouster of courts’ power to grant equitable
remedies . . . .” Freeman v. F.D.I.C., 56 F.3d 1394, 1399 (D.C. Cir. 1995); accord Courtney v.
Halleran, 485 F.3d 942, 948 (7th Cir. 2007); Hanson v. F.D.I.C., 113 F.3d 866, 871 (8th Cir.
1997). The anti-injunction language in § 1821(j), however, “shields only ‘the exercise of powers
or functions’ Congress gave to the [agency]; the provision does not bar injunctive relief when the
No. 16-6680 Robinson v. Fed. Housing Fin. Agency, et al. Page 7
[agency] has acted beyond, or contrary to, its statutorily prescribed, constitutionally permitted,
powers or functions.” Sharpe v. F.D.I.C., 126 F.3d 1147, 1155 (9th Cir. 1997) (quoting Nat’l
Trust for Historic Pres. v. F.D.I.C., 995 F.2d 238, 240 (D.C. Cir.), vacated, 5 F.3d 567 (D.C. Cir.
1993), reinstated in relevant part, 21 F.3d 469 (D.C. Cir. 1994)); accord Bank of Am. Nat’l.
Ass’n v. Colonial Bank, 604 F.3d 1239, 1243 (11th Cir. 2010); Elmco Props., Inc. v. Second
Nat’l Fed. Savings Ass’n, 94 F.3d 914, 923 (4th Cir. 1996).
We conclude that this interpretation applies equally to HERA’s anti-injunction language,
found at 12 U.S.C. § 4617(f). See Perry Capital LLC v. Mnuchin, 864 F.3d 591, 605–06 (D.C.
Cir. 2017) (quoting Freeman, 56 F.3d at 1399), petition for cert. docketed, No. 17-580 (Oct. 18,
2017); see also Cty. of Sonoma v. Fed. Hous. Fin. Agency, 710 F.3d 987, 992–93 (9th Cir. 2013).
“The plain statutory text [of § 4617(f)] draws a sharp line in the sand against litigative
interference—through judicial injunctions, declaratory judgments, or other equitable relief—with
FHFA’s statutorily permitted actions as conservator or receiver.” Perry Capital, 864 F.3d at
606. Claims that seek to “restrain or affect the exercise” of FHFA’s powers or functions as the
Companies’ conservator are therefore barred by HERA. Like the limitation in § 1821(j),
however, HERA’s limitation on court action does not apply if a litigant properly alleges that
“FHFA act[ed] beyond the scope of its conservator power.”5 Cty. of Sonoma, 710 F.3d at 992
(citing Sharpe, 126 F.3d at 1155). “[I]f the FHFA were to act beyond statutory or constitutional
bounds in a manner that adversely impacted the rights of others, § 4617(f) would not bar judicial
oversight or review of its actions.” Cty. of Leon v. Fed. Hous. Fin. Agency, 700 F.3d 1273, 1278
(11th Cir. 2012) (citation omitted); see Perry Capital, 864 F.3d at 606.
A litigant’s claims against Treasury are likewise barred if he or she seeks equitable relief
that would restrain or affect FHFA’s power as conservator. Although § 4617(f) specifically
5The district court below and the United States District Court for the District of Columbia recognized that
FHFA may also be subject to suit if Treasury alone exceeded its statutory authority. See Perry Capital LLC v. Lew,
70 F. Supp. 3d 208, 223 (D.D.C. 2014) (“[I]f FHFA, as a conservator or receiver, signs a contract with another
government entity that is acting beyond the scope of its HERA powers, then FHFA is functionally complicit in its
counterparty’s misconduct, and such unlawful actions may be imputed to FHFA.”), aff’d in part, rev’d on other
grounds, Perry Capital LLC v. Mnuchin, 864 F.3d 591 (D.C. Cir. 2017). However, as discussed below, neither
FHFA nor Treasury has exceeded its statutory authority, and we need not address whether § 4617(f) would bar
Robinson’s claims if only Treasury exceeded its statutory authority.
No. 16-6680 Robinson v. Fed. Housing Fin. Agency, et al. Page 8
addresses FHFA, that provision also forecloses claims against Treasury that seek imposition of
equitable relief that would restrain or affect FHFA’s powers or functions as conservator. Perry
Capital, 864 F.3d at 615–16; see also Dittmer Props., L.P. v. F.D.I.C., 708 F.3d 1011, 1017 (8th
Cir. 2013) (addressing anti-injunction language in FIRREA, 12 U.S.C. § 1821(j)); Telematics
Int’l, Inc. v. NEMLC Leasing Corp., 967 F.2d 703, 707 (1st Cir. 1992) (same). “[A]n action can
‘affect’ the exercise of powers by an agency without being aimed directly at [the agency].”
Hindes v. F.D.I.C., 137 F.3d 148, 160 (3d Cir. 1998).
Robinson’s claims for equitable relief indisputably “restrain or affect the exercise” of
FHFA’s powers or functions as conservator. Robinson seeks declaratory and injunctive relief
against FHFA that would effectively unravel the Third Amendment. She also alleges that by
agreeing to the Third Amendment FHFA exceeded its statutory authority under HERA and, in
turn, violated the APA. Therefore, to the extent that FHFA’s agreeing to the Third Amendment
is within the bounds of the statutory authority granted by HERA, Robinson’s claims against
FHFA are barred by HERA.6
Robinson’s claims against Treasury are also barred by HERA, to the extent that Treasury
acted within the bounds of its statutory authority by agreeing to the Third Amendment, because
those claims also seek to unravel the Third Amendment. Thus, providing equitable relief on
Robinson’s claims against Treasury would have the exact same consequence—effectively
undoing the Third Amendment—as would providing equitable relief on Robinson’s claims
against FHFA. “Accordingly, Section 4617(f)’s prohibition on relief that ‘affect[s]’ FHFA
applies here because the requested injunction’s operation would have exactly the same force and
effect as enjoining FHFA directly.” Perry Capital, 864 F.3d at 615–16 (alteration in original)
(citing Dittmer Props., 708 F.3d at 1017); accord Collins v. Fed. Hous. Fin. Agency, 254 F.
Supp. 3d 841, 846 (S.D. Tex. 2017), appeal docketed, Collins v. Mnuchin, No. 17-20364 (5th
Cir. May 30, 2017).
6FHFA and Treasury also argue that Robinson’s claims are barred because HERA provides that FHFA
“immediately succeed[s] to” Robinson’s rights and powers as a stockholder in the Companies. 12 U.S.C.
§ 4617(b)(2)(A). The parties dispute whether this provision deprives Robinson of the right to bring direct and
derivative claims regarding FHFA’s conduct. The district court did not address this argument; because we find that
Robinson’s claims are barred by 12 U.S.C. § 4617(f), nor do we.
No. 16-6680 Robinson v. Fed. Housing Fin. Agency, et al. Page 9
Robinson argues, nonetheless, that § 4617(f) is inapplicable because FHFA and Treasury
exceeded the statutory authority granted them by HERA. We address Robinson’s claims against
FHFA and Treasury in turn.
Robinson asserts that FHFA, by agreeing to the Third Amendment, exceeded its statutory
authority under HERA in four ways: (1) FHFA failed to comply with its general statutory
mandate to act as conservator; (2) FHFA, via the Third Amendment, improperly sought to wind
down the Companies during conservatorship; (3) FHFA’s agreeing to the Third Amendment
placed the Companies in unstable business conditions; and (4) FHFA failed to act independently
when it agreed to the Third Amendment.7 None of Robinson’s arguments on this matter is
Robinson first asserts that FHFA violated HERA’s mandate to act as conservator of the
Companies. Robinson relies on the traditional definition of “conservator” to support this
argument, but she fails to demonstrate that the traditional understanding of conservatorship is
relevant when determining whether FHFA exceeded its statutory authority under HERA. When
Congress uses a term, we presume that Congress intended that term to have its established
meaning. However, that presumption is inapplicable when the statutory language employed by
Congress contradicts or conflicts with the customary meaning of that term. See McDermott Int’l,
Inc. v. Wilander, 498 U.S. 337, 342 (1991). Robinson’s argument—that Congress intended to
give the term “conservator” its customary meaning—fails here because Congress explicitly
delegated to FHFA conservator authority that exceeds the customary meaning of the term.
7Robinson also argues that the Third Amendment resulted from improper or duplicitous motivations on the
part of FHFA. “Generally, ‘[i]t is not [the Court’s] place to substitute [its] judgment for FHFA’s.’” Perry Capital,
70 F. Supp. 3d at 226 (alterations in original) (quoting Cty. of Sonoma v. Fed. Hous. Fin. Agency, 710 F.3d 987, 993
(9th Cir. 2013)). As the district court explained, the § 4617(f) inquiry is limited to the contents of the Third
Amendment, not why FHFA executed the Third Amendment or what FHFA has publicly stated about its role as the
Companies’ conservator or the Third Amendment. Therefore, we address only whether FHFA’s actual conduct—
that is, its agreeing to and conduct pursuant to the Third Amendment—exceeded its statutory authority.
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First, FHFA is not a traditional conservator because Congress granted FHFA a broad
array of discretionary authority. Rather than requiring FHFA to revive or rehabilitate the
Companies (as a traditional conservator may be required to do), HERA expressly states that
FHFA “may, as conservator, take such action as may be—(i) necessary to put the [Companies] in
a sound and solvent condition; and (ii) appropriate to carry on the business of the [Companies]
and preserve and conserve the assets and property of the [Companies].” 12 U.S.C.
§ 4617(b)(2)(D) (emphasis added). This language is permissive and, as the district court
explained, details powers that FHFA holds rather than duties that FHFA must perform.
A divided panel of the D.C. Circuit agrees. “[T]ime and again, [HERA] outlines what FHFA as
conservator ‘may’ do and what actions it ‘may’ take. The statute is thus framed in terms of
expansive grants of permissive, discretionary authority for FHFA to exercise as the ‘Agency
determines is in the best interests of the regulated entity or the Agency.’” Perry Capital,
864 F.3d at 607 (quoting 12 U.S.C. § 4617(b)(2)(J)). “It should go without saying that ‘may
means may.’ And ‘may’ is, of course, ‘permissive rather than obligatory.’” Id. (internal
Second, FHFA is not a traditional conservator because the express powers granted to
FHFA by HERA conflict with the customary meaning of the term “conservator.” Specifically,
HERA provides that FHFA as conservator may “take any action authorized by this section,
which [FHFA] determines is in the best interests of the [Companies] or [FHFA].” 12 U.S.C.
§ 4617(b)(2)(J)(ii). HERA explicitly authorizes FHFA to consider its own interests when acting
as the Companies’ conservator. “That explicit statutory authority to take conservatorship actions
in the conservator’s own interest, which here includes the public and governmental interests,
directly undermines [the plaintiff’s] supposition that Congress intended FHFA to be nothing
more than a common-law conservator.” Perry Capital, 864 F.3d at 613 (quoting 12 U.S.C.
§ 4617(b)(2)(J)(ii)); see also Saxton v. Fed. Hous. Fin. Agency, 245 F. Supp. 3d 1063, 1076
(N.D. Iowa 2017), appeal docketed, No. 17-1727 (8th Cir. Apr. 4, 2017) (“Plaintiffs suggest that
8Judge Janice Rogers Brown dissented from the D.C. Circuit panel’s holding in Perry Capital, explaining
in a footnote that the panel majority placed too great an emphasis on Congress’s use of the word “may” in § 4617.
Instead, she reasoned: “Congress’s decision to use permissive language with respect to a conservator’s duties is best
understood as a simple concession to the practical reality that a conservator may not always succeed in rehabilitating
its ward.” Perry Capital, 864 F.3d at 638 n.1 (Brown, J., dissenting).
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FHFA’s actions as conservator must achieve certain goals—namely, rehabilitation and a return
to normal operations. Plaintiffs’ suggestion is contradicted by HERA’s text.”); Roberts v. Fed.
Hous. Fin. Agency, 243 F. Supp. 3d 950, 962 (N.D. Ill. 2017), appeal docketed, No. 17-1880 (7th
Cir. Apr. 27, 2017) (“And here Congress did not set up a typical conservatorship. This is best
evidenced by the fact that FHFA is empowered, in its role as conservator, to act in its own best
interests.” (citing 12 U.S.C. § 4617(b)(2)(J)(ii))). The plain language of HERA, instead,
“endows FHFA with extraordinarily broad flexibility to carry out its role as conservator,” far
beyond that contemplated in a traditional conservatorship arrangement. Perry Capital, 864 F.3d
at 606. Therefore, Robinson has failed to demonstrate that the customary definition of
“conservator” is applicable here, or that FHFA must comply with the restrictions and duties of a
traditional conservator when exercising its conservator powers under HERA.
With respect to her second and third arguments, Robinson asserts that FHFA’s agreement
to the Third Amendment improperly placed the Companies in a financial position akin to that of
liquidation. Under HERA, liquidation is a power unique to FHFA’s role as a receiver. See
12 U.S.C. § 4617(b)(2)(E) (describing FHFA’s “[a]dditional powers as receiver”). Robinson
reasons, therefore, that FHFA exceeded its statutory authority because it acted as a receiver at a
time when it was supposed to act as a conservator. However, HERA does not bar FHFA’s
decision as conservator to restructure the Companies’ dividend payments to Treasury. Nor does
HERA oblige FHFA as conservator to preserve certain capital. Robinson may disagree about the
necessity or financial wisdom of the Third Amendment, but “Congress could not have been
clearer about leaving those hard operational calls to FHFA’s managerial judgment.” Perry
Capital, 864 F.3d at 607. FHFA’s agreement to the Third Amendment is well within its
statutory conservator authority.
HERA grants FHFA far-reaching powers to direct the Companies’ business and to act on
the Companies’ behalf as conservator. HERA authorizes FHFA to “be appointed conservator or
receiver for the purpose of reorganizing, rehabilitating, or winding up the affairs of [the
Companies].” 12 U.S.C. § 4617(a)(2) (emphasis added). Specifically, HERA provides FHFA
with “[g]eneral powers” to “[o]perate” and “conduct all business” of the Companies, take such
No. 16-6680 Robinson v. Fed. Housing Fin. Agency, et al. Page 12
action as may be necessary to put the Companies in a “sound and solvent condition,” “carry on
the business” of the Companies, “preserve and conserve the assets and property” of the
Companies, “transfer or sell any asset or liability” of the Companies, and “pay all valid
obligations.” Id. § 4617(b)(2). HERA also grants to FHFA “[i]ncidental powers” to
(i) exercise all powers and authorities specifically granted to conservators or
receivers, respectively, under this section, and such incidental powers as shall be
necessary to carry out such powers; and
(ii) take any action authorized by this section, which the Agency determines is in
the best interests of the [Companies] or [FHFA].
Id. § 4617(b)(2)(J) (emphasis added).
FHFA’s execution of the Third Amendment to the PSPAs falls squarely within its
statutory conservator authority to operate the Companies, carry on business, transfer or sell
assets, and to do so in the best interests of the Companies or itself. HERA’s language—that
FHFA may take action that it determines is in the “best interests” of the Companies or FHFA,
12 U.S.C. § 4617(b)(2)(J)(ii)—is significantly different from the comparable language used in
FIRREA, which states that FDIC may take action that it determines is in the best interests of “the
depository institution, its depositors, or [FDIC],” 12 U.S.C. § 1821(d)(2)(J)(ii) (emphasis added).
FDIC is instructed to take into consideration the depositors to the failed bank in receivership or
conservatorship. FHFA does not have a similar instruction to consider the best interests of the
stockholders who invested in the Companies. See Perry Capital, 864 F.3d at 607–08.
“Renegotiating dividend agreements, managing heavy debt and other financial obligations, and
ensuring ongoing access to vital yet hard-to-come-by capital are quintessential conservatorship
tasks designed to keep the Companies operational.” Perry Capital, 864 F.3d at 607; see also
Collins, 254 F. Supp. 3d at 846 (“For the reasons set forth in Perry Capital, the arguments
asserted by Plaintiffs here—the same arguments asserted by the plaintiffs in Perry Capital—fail
to demonstrate that the FHFA's conduct was outside the scope of its broad statutory authority as
conservator.”); Saxton, 245 F. Supp. 3d at 1076 (“Plaintiffs’ outcome-oriented interpretation of
HERA therefore misses the mark. HERA speaks to FHFA’s powers as conservator, and such
powers plainly allow for the actions contemplated by the Third Amendment.”).
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Robinson has failed to allege that FHFA’s agreement to the Third Amendment exceeded
its statutory conservator authority. HERA does not require FHFA to prioritize one of its
obligations over others. Instead, FHFA may carry out its various duties in the ways it determines
are in the best interests of the Companies or itself. “[T]he most natural reading of [HERA] is
that it permits FHFA, but does not compel it in any judicially enforceable sense, to preserve and
conserve Fannie’s and Freddie’s assets and to return the Companies to private operation. . . .
[HERA] imposes no precise order in which FHFA must exercise its multi-faceted
conservatorship powers.” Perry Capital, 864 F.3d at 607. FHFA does not violate HERA when
it prioritizes certain responsibilities—such as managing heavy debt and other financial
obligations—over preserving and conserving the Companies’ assets in the short term.
Even if HERA required FHFA to put the Companies in a “sound and solvent condition”
and to “preserve and conserve” their assets—to the exclusion of other interests—Robinson has
not alleged that FHFA exceeded its statutory authority. See id. at 609; Roberts, 243 F. Supp. 3d
at 962–63. Nothing in HERA’s text requires FHFA to return the Companies to business as usual
while in conservatorship. Indeed, the Companies likely should not return to business as usual.
Robinson concedes that in conservatorship the Companies have returned to profitability, even if
a large portion of that profit was sent to “Treasury’s coffers.” And Treasury’s continuing
funding commitment guarantees that the Companies will remain solvent. See Roberts, 243 F.
Supp. 3d at 963. FHFA’s agreeing to the Third Amendment is therefore well within its
conservator powers under HERA and does not intrude on FHFA’s separate and inapplicable
authority as the Companies’ receiver.9
9Judge Brown in her Perry Capital dissent determined that FHFA may not exercise its powers as both a
conservator and receiver simultaneously. See id. at 642–43 (Brown, J., dissenting). She further found that FHFA
had violated HERA because, under the guise of a conservator, FHFA “had functionally removed itself from the role
of a HERA conservator,” id. at 645, and its agreement to the Third Amendment “placed the Companies in de facto
liquidation,” id. at 646. We agree with Judge Brown that FHFA exceeds its statutory conservator authority if it
attempts to exercise its conservator and exclusive receiver powers simultaneously. See id. at 642–43. However, we
must agree with the Perry Capital majority that in agreeing to the Third Amendment, FHFA did not encroach on
any of the exclusive powers granted to FHFA when it acts as a receiver.
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In her fourth argument, Robinson asserts that FHFA improperly ceded its independence
to Treasury by agreeing to the Third Amendment. Robinson argues that FHFA violated
HERA—specifically § 4617(a)(7), which states that FHFA “shall not be subject to the direction
or supervision of any other agency”—because it agreed to the Third Amendment under pressure
from Treasury. The district court rejected this argument, determining that Robinson did not fall
within the “zone of interests” protected by that provision and that she lacked prudential standing
to pursue the claim.
Robinson has failed to allege that she is within the zone of interests protected by the
relevant provision of HERA. The zone-of-interests test asks “whether the interest sought to be
protected by the complainant is arguably within the zone of interests to be protected or regulated
by the statute or constitutional guarantee in question.” Ass’n of Data Processing Serv. Orgs. v.
Camp, 397 U.S. 150, 153 (1970). “Whether a plaintiff’s interest is ‘arguably . . . protected . . .
by the statute’ within the meaning of the zone-of-interests test is to be determined not by
reference to the overall purpose of the Act in question . . . , but by reference to the particular
provision of law upon which the plaintiff relies.” Bennett v. Spear, 520 U.S. 154, 175–76 (1997)
(citation omitted). HERA gives FHFA authority over “critically undercapitalized regulated
entities,” 12 U.S.C. § 4617, including specifically, Fannie Mae and Freddie Mac, see 12 U.S.C.
§ 4502 (20)(A) and (B). Section 4617(a) governs the appointment of FHFA as conservator or
receiver of such entities, and subsection 4617(a)(7) in particular establishes FHFA’s
independence “[w]hen acting as conservator or receiver.” Robinson relies on subsection
4617(a)(7) to assert that FHFA exceeded its statutory authority by yielding to Treasury’s
demands and agreeing to the Third Amendment. But § 4617(a) mentions shareholders only
twice, both times in the context of FHFA’s appointment as conservator or receiver, and
subsection 4617(a)(7) mentions shareholders not at all. Rather, that subsection addresses only
FHFA and explicitly protects FHFA’s independence when acting as conservator or receiver.
It does not concern shareholders, much less protect Robinson’s interest as a shareholder in the
Companies. See Saxton, 245 F. Supp. 3d at 1077 (“In other words, § 4617(a)(7) specifically
functions to remove obstacles to FHFA’s exercise of conservator powers—i.e. to preserve
No. 16-6680 Robinson v. Fed. Housing Fin. Agency, et al. Page 15
FHFA’s interests, not those of [the Companies’] shareholders. Appropriately viewed through
this lens, the court concludes that Plaintiffs are not within the zone of interests created by
§ 4617(a)(7).”); cf. Fed. Hous. Fin. Agency v. City of Chicago, 962 F. Supp. 2d 1044, 1059 (N.D.
Ill. 2013) (explaining that HERA preempts municipalities from regulating FHFA via passage of
local laws and ordinances). Robinson has thus failed to allege that she falls within the zone of
interests protected by § 4617(a)(7), and the district court properly determined that she lacked
prudential standing to bring her claim regarding FHFA’s independence.10
After considering all of Robinson’s arguments, we conclude that Robinson has failed to
demonstrate that FHFA exceeded its statutory authority by agreeing to the Third Amendment.
Her claims against FHFA, therefore, are barred by HERA’s limitation on court action, § 4617(f).
Robinson also asserts that HERA’s limitation on court action does not apply to her claims
against Treasury because Treasury exceeded its statutory authority in two ways. Robinson
argues, first, that Treasury exceeded its statutory authority under HERA by effectuating a
“purchase” of new securities after the 2009 statutory deadline. Robinson asserts that, under the
Third Amendment, the Companies effectively “sold Treasury a new obligation—to hand over
their net worth each quarter—in exchange for canceling the Companies’ fixed-dividend
obligations.” This argument is meritless.
The Third Amendment does not effectuate a new “purchase” of the Companies’
securities. Treasury obtained no new shares of the Companies’ stock as a result of the Third
Amendment, and it did not commit any additional funds to the Companies. Cf. Katz v. Gerardi,
655 F.3d 1212, 1223 (10th Cir. 2011) (explaining exchange of stock units for cash or new stock
was not a “purchase” under the 1933 Securities Act because plaintiff “owned the same A–1
Units both before and after the merger was announced. Nothing can convert the sale . . . into a
purchase of shares he never acquired”); Isquith v. Caremark Int’l, Inc., 136 F.3d 531, 534 (7th
Cir. 1998) (explaining that the exchange of one stock for another during spinoff of a
10FHFA also argues that, even if Robinson fell within the relevant zone of interests, she failed to plausibly
allege that Treasury compelled FHFA to agree to the Third Amendment. The district court did not address this issue
and, having determined that Robinson lacks prudential standing to bring such a claim, we need not address it either.
No. 16-6680 Robinson v. Fed. Housing Fin. Agency, et al. Page 16
manufacturer’s wholly owned subsidiary did not constitute a sale or purchase of securities
because plaintiffs did not “buy or sell any securities”). Instead, the Third Amendment merely
altered the compensation structure for the stock that Treasury already owned and for which
Treasury was already receiving dividends. See Roberts, 243 F. Supp. 3d at 963 (“[T]he Third
Amendment was an exercise of rights received in connection with securities it had purchased
before its purchase authority expired, not a new purchase.” (internal citations omitted)); Perry
Capital LLC v. Lew, 70 F. Supp. 3d 208, 224 (D.D.C. 2014) (“Without providing an additional
funding commitment or receiving new securities from the [Companies] as consideration for its
Third Amendment to the already existing PSPAs, Treasury cannot be said to have purchased new
securities . . . .” (internal citation omitted)), aff’d in part, rev’d on other grounds, Perry Capital
LLC v. Mnuchin, 864 F.3d 591 (D.C. Cir. 2017). The Third Amendment altered Treasury’s
compensation structure, but that restructuring does not constitute a “purchase” of new securities
from the Companies.
Second, Robinson asserts that Treasury exceeded its statutory authority by agreeing to the
Third Amendment because HERA does not authorize Treasury to amend the PSPAs. Even
though HERA authorizes Treasury to “exercise any rights received in connection with . . . any
obligations or securities purchased” from the Companies, 12 U.S.C. §§ 1455(l)(2)(D),
1719(g)(2)(D), Robinson argues that those rights do not include the right to amend. Specifically,
Robinson argues that a “right” is an “entitlement to do something” and, because the Companies
must consent to amendment, Treasury does not have an entitlement to any amendment.
The plain language of the PSPAs disproves Robinson’s assertion. The original PSPAs
explicitly conferred on the Companies and Treasury the right to “waive or amend [the
PSPAs] solely by writing executed by both of the parties . . . .” Presuming that Robinson’s
definition of the term “right” is accurate, the PSPAs expressly grant Treasury an entitlement to
amend, albeit with the condition that such entitlement be exercised in coordination with the
Companies. Treasury and the Companies exercised that right when they agreed to the each of
the three amendments to the PSPAs, and Robinson does not allege that the First Amendment or
Second Amendment exceeded Treasury’s authority under HERA. Robinson cites no case, and
we have found none, that supports her contention that Treasury did not exercise its right to
No. 16-6680 Robinson v. Fed. Housing Fin. Agency, et al. Page 17
amend the PSPAs simply because it “could not unilaterally require” the Companies to agree to
the amendment. Because the PSPAs gave Treasury the express right to amend, Treasury’s
agreement to the Third Amendment did not exceed its statutory authority under HERA.
Robinson has failed to demonstrate that Treasury exceeded its statutory authority by
purchasing new securities from the Companies or by agreeing to the Third Amendment. Her
claims against Treasury, therefore, are barred by HERA’s limitation-on-court-action provision,
The district court correctly determined that Robinson’s APA claims against FHFA and
Treasury are barred by HERA’s limitation-on-court-action provision. Robinson’s protean
attempts to unravel the Third Amendment all “restrain or affect” FHFA’s “exercise of powers or
functions” as the Companies’ conservator,” 12 U.S.C. § 4617(f), and she has failed to
demonstrate that FHFA or Treasury exceeded the statutory authority granted to them by HERA.
In the wake of the 2007–2008 economic recession, Congress granted to the Companies
“unprecedented access” to guaranteed capital from Treasury. And, in exchange, Congress also
granted FHFA unparalleled authority to manage the Companies’ business. As unfair and illadvised
as Robinson understandably finds that allocation to be, “even the most formidable
argument concerning the statute’s purposes [cannot] overcome the clarity [of] the statute’s
text.” Kloeckner v. Solis, 568 U.S. 41, 55, n.4 (2012). The Constitution granted to Congress
“[a]ll legislative Powers” enumerated in the Constitution, U.S. Const. art. 1, § 1, making
Congress, and not appellate courts, “responsible for both making laws and mending them.” King
v. Burwell, 135 S. Ct. 2480, 2505 (2015) (Scalia, J., dissenting). Absent constitutional defect,
which Robinson has not alleged here, Congress is the proper governmental body to address poor
legislative decisions. Appellate courts hold only “judicial power—the power to pronounce the
law as Congress has enacted it.” Id. We must therefore AFFIRM the district court’s judgment.