Thursday, May 28, 2015

Why not sue the FHFA for not following HERA?

Why not sue the FHFA for not following HERA?
Same with Treasury? Forget suing for fannie as a shareholder, as FHFA has standing that it stands in place of shareholders.
Work around this by suing FHFA and treasury for not following the law.
It is obvious this is the case, they are breaking the law as written in HERA.
Hell this is the United States for crying out loud.
FHFA could not give the same bs of no standing since we are shareholders.
Not true in this type of suit. Follow the law!
Citizen suit
From Wikipedia, the free encyclopedia
In the United States, a citizen suit is a lawsuit by a private citizen to enforce a statute.[1] Citizen suits are particularly common in the field of environmental law.[2]
Citizen suits come in three forms. First, a private citizen can bring a lawsuit against a citizen, corporation, or government body for engaging in conduct prohibited by the statute. For example, a citizen can sue a corporation under the Clean Water Act (CWA) for illegally polluting a waterway. Second, a private citizen can bring a lawsuit against a government body for failing to perform a non-discretionary duty. For example, a private citizen could sue the Environmental Protection Agency for failing to promulgate regulations that the CWA required it to promulgate. In a third, less common form, citizens may sue for an injunction to abate a potential imminent and substantial endangerment involving generation, disposal or handling of waste, regardless of whether or not the defendant’s conduct violates a statutory prohibition. This third type of citizen suit is analogous to the common law tort of public nuisance.[3] In general, the law entitles plaintiffs who bring successful citizen suits to recover reasonable attorney fees and other litigation costs.[4]
In 1970, when amending the Clean Air Act, the United States Congress was inspired by similar legislation in the civil rights arena[5] to begin including specific provisions for citizens to bring suit against violators or government agencies to enforce environmental laws. Today, most anti-pollution laws have provisions for citizen suits and they have become a major means of ensuring compliance with environmental laws. Public-interest environmental legal service organizations, such as Earthjustice and the Tulane Environmental Law Clinic, often prosecute citizen suits.[6] Some non-environmental statutes, such as the Americans with Disabilities Act and the Fair Housing Amendments Act, also contain citizen suit provisions, but the majority of regulatory statutes do not.
Citizens may only bring citizen suits in federal court if they have “standing to sue”. To establish standing, the courts have required proof of three elements. First, the plaintiff must have suffered an “injury in fact”—an invasion of a legally protected interest which is (a) concrete and particularized and (b) “actual or imminent, not ‘conjectural’ or ‘hypothetical’”. Second, there must be a causal connection between the injury and the conduct complained of—the injury has to be “fairly … trace[able] to the challenged action of the defendant, and not … th[e] result [of] the independent action of some third party not before the court.” Third, it must be “likely”, as opposed to merely “speculative”, that the injury will be “redressed by a favorable decision.”[7]

THOMAS SAXTON, IDA SAXTON,BRADLEY PAYNTER,Plaintiffs,vs.THE FEDERAL HOUSING FINANCEAGENCY, in its capacity as Conservator of theFederal National Mortgage Association and theFederal Home Loan Mortgage Corporation,MELVIN L. WATT, in his official capacity asDirector of the Federal Housing FinanceAgency, and THE DEPARTMENT OF THETREASURY,Defendants.No. 1:15-cv-00047
Thomas Saxton, Ida Saxton, and Bradley Paynter, by and through their undersignedcounsel, hereby allege as follows

46138. Implicit in every contract is a covenant of good faith and fair dealing. The impliedcovenant requires a party in a contractual relationship to refrain from arbitrary or unreasonableconduct which has the effect of preventing the other party to the contract from receiving thefruits of the bargain.139. Holders of the Companies’ preferred and common stock have certain contractualrights. Preferred stockholders are entitled to a contractually specified, non-cumulative dividendand to a contractually specified liquidation preference. The dividend and liquidation rights of private preferred shareholder are prior to those of common shareholders. The Companies maynot pay dividends or make distributions on account of its common stock in any quarter wheredividends on preferred stock is not paid in full. Common shareholders are entitled to be paiddividends in parity with other common shareholders, and upon liquidation they are entitled to ashare of the residual economic value of the firm after payment of debtholders and equity holderssenior in priority to common stock.140. FHFA’s agreement to the Net Worth Sweep has arbitrarily and unreasonablyprevented Plaintiffs and other private shareholders from receiving any of the fruits of theirinvestment. Again, the Net Worth Sweep replaced the 10% dividend on Treasury’s GovernmentStock with a perpetual requirement that the Companies pay their entire net worth to Treasury.The Net Worth Sweep thus strips the Companies of their ability to generate and retain funds todistribute as dividends to Plaintiffs and other holders of preferred and common stock.141. The Net Worth Sweep also (a) subverts the priority rights of preferredshareholders by effectively transforming Treasury’s Government Stock into common stock andrequiring the Companies to pay dividends on that common stock without first paying dividends
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47on preferred stock, and (b) effectively replaces the Companies existing common stock withTreasury’s Government Stock.142. By essentially expropriating the entirety of the Companies’ net worth for thegovernment, the Net Worth Sweep also nullified entirely the contractual right of Plaintiffs andother holders of common and preferred stock to receive a payment upon the dissolution,liquidation, or winding up of Fannie and Freddie.143. No provision of Plaintiffs’ contracts with Fannie and Freddie reserves to theCompanies any right to
 nullify entirely
 the Companies’ contractual obligations toPlaintiffs and other private shareholders by granting rights to another class of the Companies’stock.144. In sum, the Net Worth Sweep repudiates and nullifies entirely the scope, purpose,and terms of the contracts governing the relationships between Fannie and Freddie and theirpreferred and common shareholders.145. FHFA has therefore both exceeded its statutory authority under HERA andbreached the implied covenant of good faith and fair dealing.
146. WHEREFORE, Plaintiffs pray for an order and judgment:a. Declaring that the Net Worth Sweep, and its adoption, are not inaccordance with and violate HERA within the meaning of 5 U.S.C. § 706(2)(C), and thatTreasury acted arbitrarily and capriciously within the meaning of 5 U.S.C. § 706(2)(A)by executing the Net Worth Sweep;b. Vacating and setting aside the Net Worth Sweep, including its provisionsweeping all of the Companies’ net worth to Treasury every quarter;
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48c. Enjoining Treasury and its officers, employees, and agents to return toFHFA as conservator of Fannie and Freddie all dividend payments made pursuant to theNet Worth Sweep or, alternatively, recharacterizing a portion of such payments as a paydown of the liquidation preference and a corresponding partial redemption of Treasury’sGovernment Stock rather than mere dividends;d. Enjoining FHFA and its officers, employees, and agents fromimplementing, applying, or taking any action whatsoever pursuant to the Net WorthSweep;e. Enjoining Treasury and its officers, employees, and agents fromimplementing, applying, or taking any action whatsoever pursuant to the Net WorthSweep;f. Enjoining FHFA and its officers, employees, and agents from acting at theinstruction of Treasury or any other agency of the government and from re-interpretingthe duties of FHFA as conservator under HERA;g. Awarding Plaintiffs damages resulting from FHFA’s breach of contractand breach of the implied covenant of good faith and fair dealing, including withoutlimitation contractually-due dividends on the preferred and common stock for eachquarter when a dividend based on the net worth of the Companies was paid to Treasury;h. Awarding Plaintiffs their reasonable costs, including attorneys’ fees,incurred in bringing this action; andi. Granting such other and further relief as this Court deems just and proper

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