as number seventeen down three seven nine four davis changes versus federal housing finance  week on the basis of twelve united states code section forty six f eighteen s the so called anti injunction clause of housing economic recovery act of two thousand and eight or ha as i'm sure that you will soon be hearing from appellant by circuit courts of appeal have dismissed stockholder claims challenging the network's we on the basis of the injunction third amendment how does don't i was it true that all your claims don't can some way affect the exercise of their statutory authority well the the you're right anti injunction it is more it's the courts in these five circuits if consistently held that it affects only equitable relief ok put all of them were confronted as to why should we agree with that even those that discrepancies and that  goes i believe the question that the court asked in its august twenty first letter about damages and whether damages can the amount of damages for example or other relief could potentially affect a staff exercise of powers if they just say first of course i've already referenced the fact that these other courts in a lot of other courts construing the fire engages in wrongful acts they cause small amounts of relief from releases that are small amounts of harm relief is available that doesn't make sense it would be very hard to draw the line in the statute frankly she will be construed to are obviously a number of ways that the images can be looked at in a court would have to after trial and hearing yes for testimony figure out what is best most the most appropriate relief and circumstances but you're right one way is to look at if this is never been implemented this the forty six and you are a claim so why again is our case any different and it's because none of those other cases had the unique claims that we have here which is statutory claims and none of them analyze the issue and we we contend that if you accept all of the reasoning of those other five certain that you still need to reach a different result here because under hara s h s they stepped into the where it's the step in the shoes and that's the melody in my ears he's from the us or that under that you step into the shoes and only have the powers of the entities but there are other provisions you're right you have to read the statute as a whole and look at each of those other powers and they are powers such as taking over the assets of an operating the regulated entity with all the powers of the shareholders directors and officers of the regulated any i think you back to the same place if they don't have those powers under wall or permits a rate even if the rate is one hundred percent permits purge shares of stock this is in preference even though it's a complete reference so i think that there's a colorable argument to do that if it isn't always how was this a violation of the requirement that there be a rate table in preference to the the there we refer to here is there is a rate of return on the capital investment or some relationship to that and there are two issues under delaware law this is the dollar statute once if you see one is that there has to be a great and we can hand that a rate of one hundred percent of the positive net worth minus a small  during any relation to the capital investment of treasury or or a stated value of the stock if it's completely different in the second we have the issue of it has to be in preference to or in relation to dividends on the other secure more junior secure but this falls within the works what you're really pleading is a huge violation if you share unfortunately a violation of that use your duty is actionable here right you have to show some do not permit these features we cite a virginia case where because of the magnitude of the features well that's what i'm wrestling it's one hundred percent so good but ten percent so k twelve percent so ok somewhere you know the higher goes the less you like it it's not just magni to that it's everything right so ninety nine ninety nine percent ok one hundred percent i don't believe it would be based on network i will say i think ninety nine point nine percent of the amount that treasury invested is capital if it's a very different turn tied to its investment or tied to some other feature of its stock may well be a  may well be a rate of return within which i believe is what rate is meant to be in the statute and but this is one hundred percent of the entire positive net worth quarterly for ever leaving absolutely think i believe the statutory language one fifty one c c i i have to admit i'm not aware of any dollar case directly dealing with this issue because no one has ever done this before right away one of the hazards of doing preference to or in relation to dividends payable in any other classes and then when you read the next sentence of the statute that says when dividends upon the preferred and special stock if any to the extent of the preference to the extent of upside risk preferred stocks risk more limited it's contractual but they have more certainty and this this is turning that concept on a head by by thankfully giving the preferred stock obviously says that but there's a there's a reason based on the statutory text as well and that's that when when the government when the government succeeds to all the rights high dose powers  stockholders officers directors stockholder you can see here it's with respect to the regulated entity in the assets of the regulator can you tell me where you are so i'm so sorry it's forty six seventeen b two a one wit capital were allowed to pursue i just might takes two to three minutes to give background on their claims which i think in of itself will answer many of the course questions this is something that's totally ignored in pla case was originally filed in twenty fifteen it had ten counts edition to the account essentially honey the only how geisha unless that state law is violated plaintiff had that they left that the networks we eliminate contract rights there were the two sharing claims and went to great detail and as the court they weren't combined in overtime one all the other cases but what i think it's important for the court to realize is plaintiff made a testicle decision in the context of the n d l did is they dropped counts three to ten and i think and i read you what plaintiff said in doing that because it's very telling and refer the court the documents in which this is stated in a in david jacobson gary hines notice the supplemental information consist concerning state law claims in delaware action and this was file on may nineteenth twenty sixteen before the m d l panel it says that the jacobs plaintiff have informed defendants that they intend to file pursued to rule forty one a one day notice of voluntary dismissal without prejudice of counts three through ten when the state is lifted and then they go on to say counts three through ten of the complaint in the delaware action or the state common law claims against attendance for breach of contract breach of the implied covering of good faith and fair dealing in breach of fiduciary duty and then we continue the only remaining claims and a fundamental point i'd create with that i don't surrender and i was that that argument representing the day and i heard it maybe that's how it came in the transcript but that is not at all what i understood to be said because what we're dealing with in the courts have been very clear powers was did the s h s say exercise and power granted by congress when it  agreed to and the amendments to the financing agreement allows freddie and fannie to exist and every case i believe circuit court has said you're in the heartland that it's a quick to central power there is no quarter suggested that it was any think of a close call whether the power exercised in this court in this case was granted by congress and your honor the is one point that i wanted to make because of the court's questions about aft and does it apply to damages if the court were to go back and look at the original complaint the court will see that the references to compensatory damages in the current complaint are really an artifact of couse that were deleted because in the original complaint the court will see that with respect to the claims that are still left counts one and two and three and four it says just repeat that for treasury that no compensatory relief was requested on  only town that are left by plaintiff asked for in the original complaint was granting appropriate equitable and injunctive relief to remedy wrongdoing including rescission of the network suite and restitution of the respect your honor what i believe is shockingly unfair is that plaintiff appellants left out the key points in the description of the facts they treat this as a and you see in the question stated the f h a if they stole billions of dollars that's what they say and but what they ignore is this was a contractual transaction and sh f a gave up a lot in the there was backing for west ignored for example is in addition to changing the didn't formula to something called a periodic commitments to the treasury and that is a theory that would be paid to treasury under the original agreement and it says in direct terms the periodic commitments the was to pay treasury the taxpayers for the full ongoing value of the continuing commitment to the continues to be to this day a commitment of tax dollars by the department of treasury of over a quarter of a trillion dollars that's it still begs the question that once treasury was getting an excellent rate of return the taxpayers got the money back why why continue or why  and wiping out this class of for shareholders that's still of puzzling question is not about trying to wipe out any class because when you look at these institutions players got older so profitable now the these institutions to me capital god lines would need a lot of capital that they don't have because don't forget they were taken over ten years ago and what the original deal was is treasury will infuse money when ever the net worth goes below zero but under the the way it was set up is we're not going to capitalize this three percent or six percent or ten percent but we're going to keep the capital of the the barrel and the reason for that is there's a statutory provision here the mandatory receivership and it says if an institution is has negative haplessly to more than thirty or sixty days eppy check they has no choice but to place it into mandatory receivership so so we've had from two thousand and eight through two thousand swell a number of infusions totally negli one hundred  what we have is we still have the original paradigm that see to use to war because the markets are accepting it and they're in business now is the goal to allow the fannings bready to fulfill actively engaged in business receivership you stop doing transactions and you liquidate assets these are again on the basis of the treasury continuing quarter trillion plus dollar capital commitments they are engaged in business every day so they're continually to facilitate the how housing markets and congress gave the conservative that authority because congress wanted to facilitate the housing market even if freddie and fannie it financial were up patch congress try to come up with something rather than throwing them into receiver harman your question there is no staff of hundreds of billions of dollars there's no step to the penny a decision was made and it can be agreed with or not i believe the reasons are laid out into the government i didn't ask you there we're talking about hundreds of billions of dollars of capital that would need to be infused into these institutions for them to operate as a normal financial institutions independently and on their own that capital doesn't exist perhaps some investors will come which we've never seen or they'll be an infusion from somewhere but right now on the basis of this quarter trillion dollars back up the institutions are able to remain in business but there is no basis for plaintiffs to complain hey these are ready to go back to the private sector i mean that takes enormous tens and tens and hundreds hundreds of billions of dollars i don't have a number here on earth but we're not in the world in light of in light of what happened this class the private sector me never have interest your honor again if you go back to the beginning there were efforts to bring in capital none of those efforts succeeded and therefore congress passed special legislation here authorizing the department of treasury for period of time to make unlimited contributions to fannie and freddie to keep them in business and i mentioned the periodic commitments to which plaintiffs choose to ignore the reason that is important is congress when it authorized treasury to make these transactions it's made very clear in everything you do here is your goal you need to protect the taxpayers and in protecting the taxpayers that was with the periodic commitments to it was a quarter of a trillion dollars capital there for the indefinite future it's worth a lot of money that the thingy that treasure was supposed to get for that has been abated has been given up at least so long as the thir facts were drawing from the commitment just to pay those dividends and so the third amendment came about to end that practice and in fact effectively ended that practice and i would point out another thing going to the equities and also underscoring why this is a business judgment  fees themselves or or the agency which is generally viewed as a public interest and we know also with treasury compelled are required to consider taxpayers  markets interest and what's been done here is in for the last you know it's now eight years since the start or six years and the third and then a ten years since a conservatorship is these entities are operating these are incredibly important to the housing market they're doing all of what them and in so they haven't they haven't made that out but you know it in general if it's just a purely equitable relief and does the things which they're entitled then perhaps it would fit with and we haven't argued that it isn't but certainly  well yes we have that we amended the complaint to focus in on the statutory issue we didn't think with all these claims out there all the other places so we have counts one in two then in one of these we have one to three in four one in two  go go to the statutory claims one as to anyone it's a pretty high three and four go to the unjust enrichment claims against treasury but you're seeking equitable relief we're seeking both equitable relief and damages and rest monetary restitution and i don't know how anyone can claim that that's not the case i'll refer the court to both paragraph twenty one of the complaint at eight fifty six and requests for relief f g h i j k and m at age seventy seven to seventy eight we seek restitution we seek discourse mut we seek damages we seek equitable relief all sorts of relief there is no waiver here the defendants below moved to dismiss on the basis of forty six sevent it says we are moving to dismiss the equitable claims under forty six seventeen after they don't argue they're seeking to dismiss other claims then they go on and did address the other claims i was shocked when judge fleet held this claim this complaint seeks only equitable relief i've never heard that before so i was unable to argue it court below because if there's any waiver here it's waiver by descending but they never made the arctic move reconsideration we did not let me just ask you about the equities because i was beaten up opposing counsel if treasury hadn't come to the rescue here with a pile of money your clients would be wiped out and that what treasury and that's a did was capitalize on the fact that we're on the brink of recovery to essentially nationalize this asset and make sure that all future upside profits for ever went to treasury and not to these other stockholders and judge we somehow bought into and this is i think is a lesson to penticton his opinion this belief that they had to do this to prevent this never ending cycle  i don't have a cite for those thirty five which is a fifty nine the district court violated the fundamental principle that you construe the evidence in the which under section seven to seven into the ministry procedures act is not money damages and so there's no sovereign immunity for restitution monetary restitution is not seeking in time for compensatory damages it's a it's a different equitable restitution the receipt it's monetary diggle restitution equitable restitution would be a constructive trust or an equitable lien seeking specific property or sometimes a specific segregated f restitution originated law and i think of quite a contract and doctrine such as that originated in the law here receiving substitutionary restitution of all of the money what the treasury has  ped from the stockholders in from the entity and that's legal monetary restitution that is not true hence it's very damages and that's not something that's covered by section s