Tweets by @SCOTUSblog On its face, the phrase of competent jurisdiction look[s] to outside sources of jurisdictional authority. Califano v. Sanders, 430 U.S. 99, 106 n.6 (1977). Congress' motivation and method in amending Fannie Mae's charter have proved obscure to some. During debate on this provision, Senator Logan asked Senator Bulkley, the chair of the subcommittee with authority over the bill, about the original sue-and-be-sued clause. The corporate charter of the Federal National Mortgage Association, known as Fannie Mae, authorizes Fannie Mae to sue and to be sued, and to complain and to defend, in any court of competent jurisdiction, State or Federal. 12 U.S.C. 1723a(a). Docketed: March 3, 2015: Lower Ct: United States Court of Appeals for the Ninth Circuit: Case Nos. Information Regarding the Activities of the Assn. A court must have the power to decide the claim before it (subject-matter jurisdiction) and power over the parties before it (personal jurisdiction) before it can resolve a case. We disagree. See Fed.R.Civ.P. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. Senator Bulkley explained that it merely conferred a capacity to sue and be sued and [did] not confe[r] a right to go into a Federal court where it would not otherwise exist. 78 Cong. Under the general federal question jurisdiction statute, 28 U.S.C. No. Ballotpedia: The Encyclopedia of American Politics. Thus, all that was intended was to render this corporation capable of suing and being sued by its corporate name in any court . on Banking and Currency, 93d Cong., Compilation of the Housing and Community Development Act of 1974, at 277 (Comm. at 2. 12008 (1934). Times, Mar. nowhere contains an explicit grant of jurisdiction, the Court pointed to two clauses requiring judicial review . v. Constr. But if the majority seeks post-Red Cross cases that agree with this dissent that an independent basis is needed to support federal subject matter jurisdiction for Fannie Mae, we need only look to the numerous district court opinions in this Circuit that the majority overrules with its decision. But opting out of some of these cookies may affect your browsing experience. Indeed, the usual assumption is that state courts are up to the task of adjudicating their own laws. In 1970, when Freddie Macs sue-and-be-sued clause and related jurisdictional provisions were enacted, Freddie Mac was a Government-owned corporation. The Supreme Court's decision in the case of Lightfoot v. Cendant Mortgage Corp. ends a 15-year court battle between a mother-daughter duo and a mortgage lender, in which the plaintiffs claimed . That method was to follow Deveaux and simply to omit the reference to federal courts. Then, in D'Oench, Duhme & Co. v. FDIC, 315 U.S. 447 (1942), the Court upheld federal question jurisdiction based on a federal charter authorizing the Federal Deposit Insurance Corporation to sue or be sued in any court of law or equity, State or Federal. Id . Like Justice Scalia and his fellow dissenters in Red Cross, the dissent argues that the clause confers only corporate capacity to sue and be sued, and that subject matter jurisdiction must come from some other provision of federal law. Lightfoot v. Cendant Mortg. Facts of the case. 616. . at 8990. Red Cross does not require a different result. (b)Fannie Maes arguments against reading its sue-and-be-sued clause as merely capacity conferring are unpersuasive. 317, 33435 (2009) (calling the number of corporations with automatic access to federal courts through their sue-and-be-sued clauses a select group and a handful). In authorizing Fannie Mae to sue and to be sued, and to complain and to defend, in any court of competent jurisdiction, State or Federal, 12 U.S.C. 1723a(a), it specifically mentions the federal courts. Red Cross, 505 U.S., at 255. I respectfully dissent. 2. at 81718. Fannie Mae first offers several alternative readings of court of competent jurisdiction. It suggests that the phrase might refer to a court with personal jurisdiction over the parties before it, a court of proper venue, or a court of general, rather than specialized, jurisdiction. See id., at 255 (reading this Courts sue-and-be-sued clause cases to support the rule that a . The Supreme Court hear the oral argument for Lightfoot v. Cendant Mortgage Corp., docket number 14-1055. Lightfoot and Hollis-Arrington also argue that Congresss 1954 and 1974 amendments to Fannie Maes charter and the context in which they occurred support its interpretation of the sue-and-be-sued clause. "[5][6] District Judge Sidney H. Stein, sitting by designation, dissented, concluding that the sue-and-be-sued clause required an independent source for jurisdiction in cases involving Fannie Mae. The time to file respondents' brief on the merits is extended to and including September 19, 2016. In Osborn, the purpose of the phrase in all State Courts having competent jurisdiction was to emphasize that the clause did not authorize or require the exercise of subject matter jurisdiction by a state court with narrow, specialized jurisdiction. The district courts thus have jurisdiction over suits by or against federally chartered corporations under 28 U.S.C. It described the previous quartet of decisions as reflecting this Courts best efforts at divining congressional intent retrospectively, efforts that had put Congress on prospective notice of the language necessary and sufficient to confer jurisdiction. Id., at 252. The House Bill, which used the phrase court of competent jurisdiction, was designed to effectuate a transformation of Fannie Mae from a government-owned corporation to a privately owned, but still federally chartered, corporation. at 8586. 11CV489, 2011 WL 1598944, at *3 (N.D.Ga. See Paul E. Lund, Federally Chartered Corporations and Federal Jurisdiction, 36 Fla. St. U.L.Rev. In noting that the actual text . at 265 (Scalia, J., dissenting). The District Court then dismissed the claims against Fannie Mae on claim preclusion grounds. Admin. 1332(c)(1), (e). 831429, at 18. v. EcorseLincoln Park Bank, 38 N.W.2d 921, 92122 (Mich.1949) (Fannie Mae sued for breach of a mortgage-related contract). 2:02-cv-06568 District Judge Consuelo B. Marshall, presiding. Congress later amended 206 to permit suit in any Federal court of competent jurisdiction regardless of the amount involved. Defense Production Act Amendments of 1951, 204, 65 Stat. Fannie Mae, preferring to be in federal court, raises several arguments against reading its sue-and-be-sued clause as merely capacity conferring. CONTACT US. In 1954, Congress rechartered Fannie Mae. Dev. that any grant of a general capacity to sue with mention of federal courts will suffice to confer jurisdiction (emphasis deleted)). Thus, the outcome here turns on the meaning of court of competent jurisdiction.. at 81728). We cannot ignore the of competent jurisdiction proviso; we must determine what it means. Ginnie Mae received the same set of powers as Fannie Mae. Co., 118 U.S. 610 (1886), provides an example. Congress' pronouncement confirms that Fannie Mae's sue-and-be-sued clause does not confer federal jurisdiction. Among other things, it took steps to increase liquidity (reasonably available funding) in the mortgage market. . By statute, Fannie Mae has the power to sue and to be sued, and to complain and to defend, in any court of competent jurisdiction, State or Federal. 12 U.S.C. 1723a(a). The district court dismissed both suits, and we affirmed on appeal. Fannie Mae provides no reason to think that in other cases, involving only state-law claims, access to the federal courts gives Freddie Mac an unintended competitive advantage over Fannie Mae that Congress would have wanted to avoid. & P. Ry. Importantly, Congress amended the relevant provision of the Red Cross's charter just five years after D'Oench was decided. 136), the judgment entered on June 11, 2010 (Dkt. As explained above, the phrase of competent jurisdiction signals that the section containing that phrase will not also harbor a grant of jurisdiction. Ginnie Mae had no use for diversity jurisdiction whatsoeverit had plenary access to the federal courts as an agency of the federal government. 10-56068 (Apr. (Both requests went to Barrett because they arose out of the 7th Circuit, where Barrett handles emergency appeals). Fannie Mae continues to participate in the secondary mortgage market. Lightfoot V. Cendant Mortgage Corporation Petition for Certiorari. Those cases confirm that the provisions require suit to be brought in federal courts but do not discuss the basis for federal jurisdiction. See Conf. 831429, at 1 (1954). Find Instagram, Twitter, Facebook and TikTok profiles, images and more on IDCrawl - free people search website. Nat'l Mortg. 83560, 201, 68 Stat. No. The Ninth Circuit initially affirmed but, while Lightfoot and Hollis-Arringtons petition for rehearing was pending, withdrew its disposition, appointed pro bono counsel [to represent Lightfoot and Hollis-Arrington], and ordered the parties to brief whether Fannie Maes federal charter granted the district court subject matter jurisdiction. Upon review, the Ninth Circuit held that Fannie Maes charter confers federal question jurisdiction over every case brought by or against Fannie Mae. Most obviously, these clauses make clear that the federal entityas opposed to, for example, its administratorhas the ability to engage in litigation. Armed with these earlier cases, as synthesized by Red Cross, we turn to the sue-and-be-sued clause at issue here. See 22 U.S. (9 Wheat.) The phrase makes clear that state courts of specialized jurisdictionsuch as family courts and small-claims courtsneed not entertain suits that do not satisfy those courts' jurisdictional requirements. Housing Act of 1954 (1954 Act), 201, 68 Stat. As originally chartered, Fannie Mae was wholly owned by the Federal Government and had three objectives: to establish a market for [FHA-insured] first mortgages covering new housing construction, to facilitate the construction and financing of economically sound rental housing projects, and to make [the bonds it issued] available to . It expected that Fannie Mae would repurchase all of its preferred stock and that legislation would then be enacted to turn Fannie Mae over to the private stockholders. This case presents the question whether this sue-and-be-sued clause grants federal district courts jurisdiction over cases involving Fannie Mae. This is an unduly narrow reading of the clause. Red Cross did not tie Congress' hands, preventing it from crafting sue-and-be-sued clauses as it deems fit. ICYMI: Shadow docket update in a TikTok minute. The certainty of the dissent may explain the lower court decisions adopting a broader reading of Red Cross. 1702. Lightfoot and Hollis-Arrington claim that the Ninth Circuit erred when it found a clear rule in Am. 1345. Fannie Maes argument on this front, moreover, contains a deeper flaw. The amendment to Fannie Mae's sue-and-be-sued clause was part and parcel of this overarching intendment. Follow Admin. By contrast, the second Banks charter did grant jurisdiction to the federal circuit courts because it used words expressly conferring a right to sue in those Courts. Ibid. 831429, at 9091; S.Rep. Corp. on CaseMine. Corp., 465 F. App'x 668 (9th Cir.2012). Lightfoot and Hollis-Arrington argue that the imperative to avoid constitutional difficulty under the constitutional avoidance doctrine would preclude Fannie Mae from having automatic federal question jurisdiction. 241 U.S., at 304. (Distributed). A party decided to to file a brief asking the Supreme Court to hear the Lightfoot v. Cendant Mortgage Corporation case (trying the Court grants the party a writ of certiorari). Since we cannot presume that Congress amends statutes with frivolous intent, it follows that Fannie Mae must have needed this jurisdictional hook. Nat'l Mortg. We also use third-party cookies that help us analyze and understand how you use this website. Using this approach, Fannie Mae's sue-and-be-sued clause allows for only one readinga court must have an independent basis of jurisdiction to hear a suit involving that company. at 257. 147. to proceed in a court specified by statute or in a court of competent jurisdiction and stated that both seem to look to outside sources of jurisdictional authority. Id., at 105106, and n.6. at 817. 22 U.S. (9 Wheat.) DECIDED BY: Roberts Court (2016- ) LOWER COURT: United States Court of Appeals for the Ninth Circuit. The outcome instead turns on the meaning of court of competent jurisdiction in Fannie Maes sue-and-be-sued clause. Id. Nat'l Mortg. The Supreme Court's application of the default rule over the past two centuries defines the interpretive tools for our analysis. Brief for Respondents 4145. For petitioner: E. Joshua Rosenkranz, New York, N. Y.; and Ann O'Connell, Assistant to the Solicitor General, Department of Justice, Washington, D. C. (for United States, as amicus curiae.) Before 1954, Fannie Mae, like the Red Cross, had the statutory authority to sue and be sued; complain and defend, in any court of law or equity, State or Federal. H.R.Rep. Both statutes expressly refer to the corporation a citizen of the relevant forum. See id. The 1954 Act was prompted by President Eisenhower's desire to develop a new and revitalized housing program better adapted to current requirements, which would clearly identify the proper role of the Federal Government in the housing field and outline more economical and effective means for improving the housing conditions of our people. H.R.Rep. Fannie Mae's sue-and-be-sued clause should be no different. 831472, at 43. The Court concluded that this section merely granted the Bank the capacity to sue. We hold that this language confers federal question jurisdiction over claims brought by or against Fannie Mae. 80773, 1332, 1343, 134546, 62 Stat. On November 8, 2016, the U.S. Supreme Court heard oral argument in a case Helmer Friedman LLP successfully convinced the high court to hear. The proviso performs the same function when it modifies Federal courts. Lightfoot ET AL v/s Cendant Mortgage Corp. No. https://www.supremecourt.gov/orders/courtorders/110422zr_5i26.pdf. Last month, Amy Coney Barrett single-handedly denied a separate but similar request. Three clauses were held to grant jurisdiction, while two were found wanting. ), SET FOR ARGUMENT On Tuesday, November 8, 2016. Today at SCOTUS: Orders at 9:30 a.m. EST, followed by oral arguments at 10 a.m. in a pair of cases that could further reduce the power of federal executive-branch agencies. Pp. Accord Pirelli, 534 F.3d at 785. investors. Fed. I therefore respectfully dissent. Under the rule announced in American National Red Cross v. S.G., 505 U.S. 247 (1992), Fannie Mae's federal charter confers federal question jurisidiction over claims brought by or against Fannie Mae. Nat'l Mortg. But federally chartered corporations are not citizens of any State for the purposes of section 1332. . In 1954, Congress had no reason to think that replacing the phrase court of law or equity with the phrase court of competent jurisdiction would eliminate federal question jurisdiction under Fannie Mae's sue-and-be-sued clause. Litig., No. NEW: Amy Coney Barrett has again denied a request on the shadow docket to block Biden's student-debt relief plan. Thus, arguments as to why the phrase court of competent jurisdiction could still have meaning if it does not carry its ordinary meaning are beside the point. 633, 727 (codified as amended at 12 U.S.C. L.Rev. The Senate Bill, which retained the old phrase in any court of law or equity, would not have changed the ownership of Fannie Mae. It did not enlarge the jurisdiction of any particular court. Id. Fannie Mae contends that Red Cross reaffirmed the decision from Osborn, holding that Congresss power under Article III is broad enough as to allow legislative bestowal of federal question jurisdiction for GSEs. Lightfoot v. Cendant Mortgage Corporation United States Supreme Court 137 S. Ct. 553 (2017) Facts In 1938, the Fair Housing Administration chartered the Federal National Mortgage Association (Fannie Mae) (defendant). However, Red Cross did not announce any new rule of law. It has been just over four months since the Supreme Court issued its decision in Dobbs v. Jackson Womens ABOUT 93383, tit. Beverly Ann Hollis-Arrington and Crystal Monique Lightfoot brought several claims against the Federal National Mortgage Association ("Fannie Mae"). See also Shoshone Mining Co. v. Rutter, 177 U.S. 505, 506507 (1900) (statute authorizing suit in a court of competent jurisdiction . Rep. No. Its alternative readings of court of competent jurisdiction are premised on the already rejected reading of Red Cross. The court reasoned that the Supreme Court in Am. Housing and Urban Development Act of 1968, Pub.L. The dissent relies heavily on the fact that the 1954 amendments were part of a broad reform reducing the federal government's role in Fannie Mae. Fund Co., 903 F.2d 114, 118 (2d Cir.1990); Lomas & Nettleton Co. v. Pierce, 636 F.2d 971, 973 (5th Cir.1981); BorSon Bldg. [4] The district court denied the motion, but on appeal, the United States Court of Appeals for the Ninth Circuit held that Fannie Mae's sue-and-be-sued clause "confers jurisdiction on the federal courts. at 257. No longer wholly Government owned, Fannie Mae had mixed ownership: Private shareholders held its common stock and the Department of the Treasury held its preferred stock. This brief, ambiguous statement did not settle the meaning of 216(b), and thus did not settle the meaning of the phrase court of competent jurisdiction. The other cases in this set dealt with the Housing and Rent Act of 1947. Ramos v.Louisiana, 590 US ___ (2020). CRYSTAL MONIQUE LIGHTFOOT, et al., Petitioners v. CENDANT MORTGAGE CORPORATION, dba PHH MORTGAGE et al. 646, 1346, 62 Stat. The judgment of the Ninth Circuit is reversed. The two places where a corporation is essentially at home and therefore subject to general jurisdiction are its place of incorporation and its principal place of business. Argued November 8, 2016Decided January 18, 2017 The Federal National Mortgage Association (Fannie Mae) is a federally chartered corporation that participates in the secondary mortgage market. 1717(a)(2)(A). In 2002, Lightfoot and Hollis-Arrington filed a joint action, again pro se, in California state court against the same parties from the 2001 federal action and alleging the same conspiracy. H.R.Rep. Sotomayor, J. 1723a (a). The Court took from Deveaux that a general capacity in the Bank to sue, without mentioning the Courts of the Union, may not give a right to sue in those Courts. 9 Wheat., at 818. See id. IT IS SO ORDERED. Lightfoot v. Cendant Mortgage Corp. federal courts civil procedure subject matter jurisdiction original jurisdiction Issues Do federal courts have subject matter jurisdiction over lawsuits against the Federal National Mortgage Association ("Fannie Mae") based soley on the sue-and-be-sued clause in its congressional charter? At most then, this point might support reading the phrase to refer to both subject-matter and personal jurisdiction. Brief of petitioners Crystal Monique Lightfoot, et al. CRYSTAL LIGHTFOOT AND BEVERLY HOLLIS-ARRINGTON, Petitioners, v. CENDANT MORTGAGE CORP. D/B/A PHH MORTGAGE, FANNIE MAE, ROBERT O. MATTHEWS AND ATTORNEYS EQUITY NATIONAL CORP., Respondents. It never once mentioned the change to Fannie Mae's sue-and-be-sued clause. On this understanding, Fannie Maes sue-and-be-sued clause is most naturally read not to grant federal courts subject-matter jurisdiction over all cases involving Fannie Mae but to permit suit in any state or federal court already endowed with subject-matter jurisdiction. See 7 U.S.C. Some, including the lower courts here, have understood it to set out a rule that an express reference to the federal courts suffices to make a sue-and-be-sued clause a grant of fed-eral jurisdiction. court of competent jurisdiction. 6(d)(1), 88 Stat. The House subcommittee summarized the amendment as provid[ing] that the principal office of FNMA be located in the District of Columbia metropolitan area, as well as in the District of Columbia, though for jurisdiction and venue purposes FNMA would be considered a District corporation. Subcomm. Tag: Lightfoot v. Cendant Mortgage Corporation. 4. At the time of the 1954 amendment, Fannie Mae's charter's reference to court[s] of law or equity had become an antiquarian relic with little relevance to the American legal system. Sign up to receive a daily email In Lightfoot v. Cendant Mortgage Corp., No. . Since eliminating the reference to federal courts in the FSLIC amendment eliminated federal question jurisdiction over FSLIC suits brought under its sue-and-be-sued clause, Congress had no reason also to insert the phrase court of competent jurisdiction to accomplish the same thing. PHH MORTGAGE, ET AL. 1723a(a). Corp. v. Ticktin, 490 U.S. 82, 8687 & n.5 (1982) (Congress can write provisos that limit broad grant[s] of federal jurisdiction.). Yet Fannie Mae and Ginnie Mae kept precisely the same sue-and-be-sued clause, authorizing them both to sue and be sued, and to complain and to defend, in any court of competent jurisdiction, State or Federal. 12 U.S.C.