FNMA and FMCC preferreds. In search of the elusive 10 bagger.

[Guest cherzeca]

"If he doesn't recuse, what's the next step for government? Do they file a motion with another court to force removal of judge?"

 

don't think failure to recuse decision is appealable except as part of an appeal of a decision on merits

 

Thanks Chris - as always very useful insight (also into what (not) to do with judges). So if I understand you correctly, the decision in Thapur's and there is only a small risk that this may create problems for plaintiffs later on if he rules in their favor?

 

C.

 

i think that is right, and others should feel free to correct me if their experience is otherwise, but i think federal law sets out the standard for the judge to apply, and only an appeal on merits can include argument that judge was in error in not recusing.  this gives a certain lack of finality to a decision since this is an obvious grounds for appeal, but in this instance, $32 would not seem to be a big risk, and Ps brief, filed within 24 hours, seems to indicate that there is more than ample discretion for a judge to fit $32 into.  this 16 share issue was something that the judge was not aware of, it was brought to everyone's attention when judge became aware (bigger issues of conflict arise if a party can prove that an issue, even if small, was not disclosed by judge but was discovered by party later), the judge invited briefing, and the applicable federal law seems to indicate that if the conflict can be resolved and is resolved, then no harm no foul, and so this looks like just another delay.

 

i may be overstating this, but judge has seen a failed removal attempt by D, and what i believe is a failed molehill to mountain conflict recusal attempt by D over $32.  i just dont think this looks like a confident D, it may even look like a D that doesnt want to argue in front of this judge, and all of this is not likely to endear judge to D.  most judges want to hear the case assigned to them expeditiously.

[Guest cherzeca]

Wouldn't the whole thing be resolved if he simply sold his shares? I don't understand why this has to be such a process.

 

law is all about process, as well as substance.  i think this will be resolved through sale, as per P brief

[Mephistopheles]

i may be overstating this, but judge has seen a failed removal attempt by D, and what i believe is a failed molehill to mountain conflict recusal attempt by D over $32.  i just dont think this looks like a confident D, it may even look like a D that doesnt want to argue in front of this judge, and all of this is not likely to endear judge to D.  most judges want to hear the case assigned to them expeditiously.

 

+1

 

I agree. Let's inverse and assume all else was equal except the Judge was Lamberth in this case. Would the defendants really cause a fuss over $32? My guess is not.

 

Prolonging the case is particularly beneficial for defendants in this instance: 1) Nobody is personally footing the legal bill for all the delay tactics, 2) Meanwhile the government lawyers continue to punch the clock, 3) Delay also means pushing more briefs/arguments to beyond the election, a significant benefit for Clinton, 4) The further out from Obama's Presidency this is settled, the less affect it will have on his legacy, or the legacy of anyone else involved.

 

So, as silly and self-damaging trying to get him to recuse over $32 may be, it helps with the greater goal for the govt. There's really no reason for the defendants or their lawyers to act rationally here as would a private party in the same situation.

[Guest cherzeca]

this is the final paragraph of the relevant federal recusal statutory provision:

 

"(f) Notwithstanding the preceding provisions of this section, if any justice, judge, magistrate judge, or bankruptcy judge to whom a matter has been assigned would be disqualified, after substantial judicial time has been devoted to the matter, because of the appearance or discovery, after the matter was assigned to him or her, that he or she individually or as a fiduciary, or his or her spouse or minor child residing in his or her household, has a financial interest in a party (other than an interest that could be substantially affected by the outcome), disqualification is not required if the justice, judge, magistrate judge, bankruptcy judge, spouse or minor child, as the case may be, divests himself or herself of the interest that provides the grounds for the disqualification."

 

P's brief construed "substantial judicial time" in terms of judicial attention.  while i dont disagree, it can also simply be construed as passage of substantial time.  in either event, judge is on record as believing that he should render decision on MTD by end of july, and he stated that he discovered ownership after he had read briefing while preparing for oral argument, so it seems both time and effort had been expended.

 

so we can expect his decision monday that he sold the shares and is not recusing.  then we have this charade where D has to convince judge that he was wrong notwithstanding the statutory provision.

[Sunrider]

Thanks Chris. Intuitively I agree with your view that this will not endear D with the judge here and will also look very odd as something to be argued in an appeal (given what I read in P's brief).

[Guest cherzeca]

judge thapar is recusing himself.  he claims that although statute allows him to sell shares to avoid recusal, he thinks the ability of judge to potentially pick and choose when to sell and not recuse is troublesome.  so he is taking an above reproach approach.

 

no, i dont get it

 

edit:  "Robinson responds that the undersigned can avoid recusal by simply selling off the

sixteen shares. R. 57-1. And Robinson is right: A judge is not required to recuse if he or his

spouse “divests himself or herself of the [financial] interest” after discovering it. 28 U.S.C.

§ 455(f). But the statute does not mandate that judges sell their shares in order to avoid

recusing. Nor does the Court consider such a practice sound judicial policy. A judge could

effectively pick and choose his cases by selling certain shares and keeping others. Such

maneuvering would be obviously unfair to litigants—not to mention unnecessary, given a

bench full of other uniformly qualified and impartial judges. The undersigned therefore will

not divest the shares simply in order to hear this case. Thus, the undersigned must recuse."

 

second edit:  essentially thapar doesn't like the discretion that the recusal statute gives him.. he could avoid discretion by adopting a uniform policy. could be i will always sell shares and not recuse. could be i will never sell shares and always recuse.  i guess he knows his portfolio better than we do

[TonyG]

Wow. Now how long is it going to take to get another judge up to speed?

[Guest cherzeca]

Wow. Now how long is it going to take to get another judge up to speed?

 

you would have thought thapar would have considered this delay "unfair to the litigants"...

[Eye4Valu]

Was the Kentucky case that important? Seems to me that Ct. App. for D.C., Ct. of Fed. Claims and Delaware cases are the big ones. Am I missing something? Was Kentucky closest to being adjudicated?

[Guest cherzeca]

Was the Kentucky case that important? Seems to me that Ct. App. for D.C., Ct. of Fed. Claims and Delaware cases are the big ones. Am I missing something? Was Kentucky closest to being adjudicated?

 

speaking for myself, i thought we might have gotten a ruling on a MTD by end of july.  if in favor of Ps that would have been a big development

[Mephistopheles]

This is bizarre, he seemed so enthusiastic about hearing this case.

[muscleman]

This is bizarre, he seemed so enthusiastic about hearing this case.

 

Maybe there was the invisible Obama hand trying to manipulate justice. I can tell that from the recent FBI statement about Hillary's email gate.

::)

 

I am sure behind the doors, Obama is pushing the Perry Appeal judges hard as well.

[Sunrider]

Bugger.

 

Chris - am I reading this right that the case will go to Judge Caldwell, or is she simply to decide which other judge to allocate it to?

 

If it stays with her - anything in her record that would indicate he pre-dispositions?

 

Thank you

C

[muscleman]

Was the Kentucky case that important? Seems to me that Ct. App. for D.C., Ct. of Fed. Claims and Delaware cases are the big ones. Am I missing something? Was Kentucky closest to being adjudicated?

 

speaking for myself, i thought we might have gotten a ruling on a MTD by end of july.  if in favor of Ps that would have been a big development

 

The court allowed Fairholme to file supplemental briefs, so that would take a bit more time for them to read and discuss. The DE case is not moving and Sweeney's still not deciding on the release of the documents yet. Is it normal for courts to drag on for so long?

[Eye4Valu]

"The wheels of justice turn slowly, but grind exceedingly fine."

[doughishere]

Mortgage Credit Availability Decreases in June

 

https://www.mba.org/2016-press-releases/july/mortgage-credit-availability-decreases-in-june

[Guest cherzeca]

Bugger.

 

Chris - am I reading this right that the case will go to Judge Caldwell, or is she simply to decide which other judge to allocate it to?

 

If it stays with her - anything in her record that would indicate he pre-dispositions?

 

Thank you

C

 

it appears that this referral is just back to the chief judge for her to assign out.  all judges at eastern district kentucky were appointed by #41

[hardincap]

watt's letter to community groups:

[Guest cherzeca]

treasury has filed its supp brief in perry and raises a crucial argument.  treasury claims that federal govt can't be sued for state law claims under APA.  this argument is certainly not apparent from reading APA, but treasury cites cases.

 

this in effect would insulate treasury from injunctive relief where it buys up shares in any corporation and does an unfair squeeze out merger.

 

treasury also raises HERA 4617(f) as a bar but we could expect that.

 

counsel usually cherry picks cases favorable to its claim; we shall see if hume has his cases to pick from

treasury_reply_to_perry_supp_brief.pdf

[Guest cherzeca]

judge sleet (hindes/jacobs) awakes:

 

ORDER

Civil Action No. 15-708-GMS

CLASS ACTION

IT IS HEREBY ORDERED THAT the Stay

imposed on March 29, 2016 (D.I. 44) is LIFTED

 

next time i have insomnia, i want to take what sleet takes

[merkhet]

FHFA's supplemental brief is pretty favorable for shareholders, IMHO. See attached.

 

(1) FHFA does not assert sovereign immunity.

 

(2) FHFA argues that 4623(d) removes jurisdiction because any relief would "affect the effectiveness" of FHFA's regulatory action in enacting the Third Amendment.

 

I think (2) is a HUGE stretch because paying out on a breach of K claim does not affect the regulatory regime enacted by the NWS. It will be the same as it was afterwards -- the only difference is that the shareholders would get paid for the breach. Moreover, I suspect that they came up w/ the argument in (2) because (A) they had no good arguments for withdrawal of jurisdiction and (B) they think the Court likes the idea of 4623(d) and might just go with it.

 

Finally, and I hope Hume picks up on this and hammers it in -- FHFA argues in (1) that they do not have sovereign immunity because they acted as a conservator and not a regulator, and then in (2) asks for a withdrawal of subject matter jurisdiction because they are a regulator. Oops.

2016-07-13_Supplemental_Brief_for_the_FHFA.pdf

[Guest cherzeca]

FHFA's supplemental brief is pretty favorable for shareholders, IMHO. See attached.

 

(1) FHFA does not assert sovereign immunity.

 

(2) FHFA argues that 4623(d) removes jurisdiction because any relief would "affect the effectiveness" of FHFA's regulatory action in enacting the Third Amendment.

 

I think (2) is a HUGE stretch because paying out on a breach of K claim does not affect the regulatory regime enacted by the NWS. It will be the same as it was afterwards -- the only difference is that the shareholders would get paid for the breach. Moreover, I suspect that they came up w/ the argument in (2) because (A) they had no good arguments for withdrawal of jurisdiction and (B) they think the Court likes the idea of 4623(d) and might just go with it.

 

Finally, and I hope Hume picks up on this and hammers it in -- FHFA argues in (1) that they do not have sovereign immunity because they acted as a conservator and not a regulator, and then in (2) asks for a withdrawal of subject matter jurisdiction because they are a regulator. Oops.

+1

 

using the 4623(d) argument is weaker for these private law claims than it is for the APA claim, but first rule of litigation is use what you got

 

edit:  giving fhfa just a little credit, i think their point is that they act as both C and R, and anything that they do as C (NWS) cannot be voided since to do so would affect what they did as R.  sounds a bit like a monarch talking...

[rros]

i think their point is that they act as both C and R, and anything that they do as C (NWS) cannot be voided since to do so would affect what they did as R.  sounds a bit like a monarch talking...

Problem with this is that before Appeals brought this up FHFA and DOJ didn't even know there was such a thing as a 4623. Yet, now they want to tie the nws from the conservatorship to something they weren't aware of at the time. It would be really bad if the ones moving the goal post are the judges themselves.

[Guest cherzeca]

i think their point is that they act as both C and R, and anything that they do as C (NWS) cannot be voided since to do so would affect what they did as R.  sounds a bit like a monarch talking...

Problem with this is that before Appeals brought this up FHFA and DOJ didn't even know there was such a thing as a 4623. Yet, now they want to tie the nws from the conservatorship to something they weren't aware of at the time. It would be really bad if the ones moving the goal post are the judges themselves.

 

Agreed. But notice that fhfa's cited to no precedent in its brief. This is a tough case for FHFA to make

[merkhet]

Looks like we'll get to peak behind the curtain a little more with some more unsealed documents by this Friday.

2016-07-19_Order_Granting_Unopposed_Motion_to_Unseal_Fairholmes_First_Motion_for_Judicial_Notice.pdf