Big Win for GSE Plaintiffs
The FHFA and Treasury had tried to consolidate all the various GSE lawsuits into one. It was yet another stall tactic to delay the various suits progress in their respective courts. To some degree it worked, cases by in large were stalled pending the outcome of this panel.
The government lost. The cases will immediately resume and we can get on with discovery and litigation. The WSJ will tell us of course this ruling in meaningless. I guess the question to ask them would be “if it meant nothing, why was the government trying to consolidate?” …. You can ask it but you won’t get an answer.
It is so sad to see how the WSJ has become ruled by a naked political bias. It opinion pages are wholly useless now for those seeking any type of impartiality. On its opinion pages you will find not a single piece that supports plaintiffs in the GSE litigation. I’ll ask the question I asked before and have not gotten an answer from them….”how is that possible?”. I only see two options: either those in charge will simply not allow it (pure editorial bias) or the entire group is plagued by a dangerous “group think”. While they have become the perfect counter to Krugman and the NYT’s opinion pages, that still really sucks. They should want to be better ….and this is coming from a Reagan Republican….
From the order:
On the basis of the papers filed and hearing session held, we conclude that centralization is not necessary for the convenience of the parties and witnesses or to further the just and efficient conduct of the litigation. These actions arise from the agreement in August 2012 between FHFA and the Treasury Department to enter into the third amendment of their preferred stock purchase agreement. Specifically, most plaintiffs allege that the third amendment constituted a de facto nationalization of Fannie Mae and Freddie Mac that extinguished the private shareholders’ economic interests in the companies by replacing a fixed quarterly dividend with a variable dividend equal to Fannie Mae’s and Freddie Mac’s quarterly earnings, if any, less a small and decreasing capital reserve.
Plaintiffs opposing centralization argue that there are not sufficient common disputed facts to warrant centralization, and that discovery will be minimal. Defendants have not persuasively refuted these arguments.