Oakland Cnty. v. Fed. Nat'l Mortg. Ass'n, Civil Action No. 11-12666
Decision Date | 20 September 2011 |
Docket Number | Civil Action No. 11-12666 |
Parties | OAKLAND COUNTY, and ANDREW E. MEISNER, Plaintiffs, v. FEDERAL NATIONAL MORTGAGE ASSOCIATION, and FEDERAL HOME LOAN MORTGAGE CORPORATION, Defendants. |
Court | U.S. District Court — Eastern District of Michigan |
OPINION AND ORDER GRANTING
Oakland County and Andrew E. Meisner, the Oakland County Treasurer, ("Plaintiffs") brought this action against Federal National Mortgage Association and Federal Home Loan Mortgage Corporation ("Defendants") asserting that Defendants recorded real estate transactions with the County Register of Deeds without paying the accompanying transfer tax. Presently before this Court for Hearing and Determination (Dkt. 26) is Federal Housing Finance Agency's Motion to Intervene (Dkt. 13). For the following reasons, this Court GRANTS Federal Housing Finance Agency's Motion to Intervene.1
The Federal National Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac") are government-sponsored enterprises ("GSEs"): private, shareholder-owned corporations with federal government charters. See Mark Jickling, Cong. Research Serv., RS22950, Fannie Mae and Freddie Mac in Conservatorship 1 (2008); see also . ) Generally speaking, the GSEs buy home mortgages from the original lenders, "repackage them as mortgage-backed securities, and either sell them or hold them in their own investment portfolios." Jickling, supra at 1.
On July 30, 2008, Congress passed the Housing and Economic Recovery Act of 2008, ("Act" or "HERA") and established the Federal Housing Finance Agency ("Agency" or "FHFA"). See id. at 2. Pursuant to the Act, on September 6, 2008, the Agency's Director appointed the Agency asconservator of Fannie Mae and Freddie Mac. Under HERA, the Agency "succeed[ed] to all rights, titles, powers, and privileges of [Fannie Mae and Freddie Mac], and of any stockholder, officer, or director of [Fannie Mae and Freddie Mac] with respect to [Fannie Mae and Freddie Mac] and [their] assets." 12 U.S.C. § 4617(b)(2)(A)(i). "In other words, FHFA completely controls Fannie Mae and Freddie Mac."
Oakland County and the Oakland County Treasurer (collectively, "County") assert that through the foreclosure process Fannie Mae and Freddie Mac became the owners of certain properties. (Dkt. 5, Pls.' Mot. Summ. J. at 1-3.) Defendants then conveyed those properties and recorded the accompanying deeds with the Oakland County Register of Deeds. But, Plaintiffs claim, Defendants did so without paying the requisite transfer tax. (Compl. ¶¶5-6.) Accordingly, on June 20, 2011, the County filed this suit to recover the unpaid transfer taxes. (Dkt. 1.)
On July 20, 2011, the Agency, as conservator of Fannie Mae and Freddie Mac, filed a motion to intervene in this case. (Dkt. 13.) The motion is fully briefed (Dkts. 22, 25), and on September 15, 2011, this Court heard oral argument (see Dkt. 28).
"On timely motion, the court must permit anyone to intervene who is given an unconditional right to intervene by a federal statute." Fed. R. Civ. P. 24(a)(1). 6 James Wm. Moore et al., Moore's Federal Practice § 24.02 (3d ed. 2011).
The Agency asserts that the Act makes plain that Congress granted it an unconditional statutory right to intervene. (FHFA's Mot. Intervene at ECF 13-14; FHFA's Reply for Mot. to Intervene at 1-2.) The Agency also asserts that "Federal courts have consistently recognized FHFA's statutory right to intervene under 12 U.S.C. § 4617(b)(2)(A)(i) in cases involving Fannie Mae or Freddie Mac." (Id. at ECF 14 (citing cases).)
The County responds by asserting that HERA contains no provision explicitly granting the Agency a right to intervene, and the Act's silence is notable given that in other statutes Congress has explicitly provided for the right. The County further explains that the cases relied upon by the Agency are not persuasive authority because they involved intervention motions that were stipulated to or unopposed, and/or present little or no justification for granting Agency intervention. (Id. at 5-6.)
While both parties have presented strong arguments in support of their respective positions, this Court concludes that the Agency's position is better supported by both the text of the Act and the limited case law on point.
The starting place for interpreting a statute is its text. See Rubin v. United States, 449 U.S. 424, 430 (1981). If an act's "language at issue has a plain and unambiguous meaning with regard to the particular dispute in the case," further inquiry is unnecessary. Robinson v. Shell Oil Co., 519 U.S. 337, 340 (1997); accord Roberts ex rel. Wipfel v. Hamer, — F.3d —, 2011 WL 3768254, at *4 (6th Cir. Aug. 26, 2011) (" .
An examination of HERA as a whole reveals that Congress granted FHFA an unconditional right to intervene in this case. The Act makes the Agency, as conservator, the immediate successor to "all rights, titles, powers, and privileges of the regulated entity, and of any stockholder, officer, or director of such regulated entity with respect to the regulated entity and the assets of the regulated entity." 12 U.S.C. § 4617(b)(2)(A)(i). Similarly, the Act provides that the Agency has the right to "take over the assets of and operate the regulated entity with all the powers of the shareholders, the directors, and the officers of the regulated entity and conduct all business of the regulated entity." 12 U.S.C. § 4617(b)(2)(B)(i). These provisions make clear that Congress intended to grant the Agency the right to exercise plenary control over Fannie Mae and Freddie Mac. Cf. In re Federal Home Loan Mortg. Corp. Derivative Litig., 643 F. Supp. 2d 790, 797 (E.D. Va. 2009) ( ); Esther Sadowsky Testamentary Trust v. Syron, 639 F. Supp. 2d 347, 350 (S.D.N.Y. 2009) () . This Court views Congress's broad grant of authority to the Agency under 12 U.S.C.§§ 4617(b)(2)(A)(i), (b)(2)(B)(i) to include the right to participate in the defense of Fannie Mae and Freddie Mac's assets.
To the extent that the County demands something more explicit in this regard, the Act provides that the Agency as conservator has the power to (1) "preserve and conserve the assets and property of the regulated entity," 12 U.S.C. § 4617(b)(2)(B)(iv), (2) take such action as may be "necessary to put the regulated entity in a sound an solvent condition," 12 U.S.C. § 4617(b)(2)(D)(i), and (3) take such action as "appropriate to carry on the business of the regulated entity and preserve and conserve the assets and property of the regulated entity," 12 U.S.C. § 4617(b)(2)(D)(ii). And the Court notes that a suit such as the present one could significantly affect the conservation and management of Fannie Mae and Freddie Mac's assets and alter their future business practices. As such, the Court disagrees with the County that "there is no connection between [the Agency's] right to operate Fannie Mae and Freddie Mac and 'an unconditional right to intervene.'"2
Yet the Act still does not use the word "intervene," and the County asserts that notwithstanding the foregoing statutory provisions, "Congress knows how to confer the right to intervene and, when it does, it does so explicitly." The Court does not quarrel with the general rule - more applicable in some situations than others - that when Congress intends a particular result, it says so explicitly. See, e.g., Meghrig v. KFC Western, Inc.,516 U.S. 479, 484-85 (1996) () ; FCC v. NextWave Personal Commc'ns, Inc., 537 U.S. 293, 302 (...
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