United States Court of Appeals 

for the Fifth Circuit ____________ 

No. 22-20632 

____________ 

Patrick J. Collins; Marcus J. Liotta; 

William M. Hitchcock, 

Plaintiffs—Appellants, 

versus

Department of the Treasury; 

Federal Housing Finance Agency; Sandra L. Thompson; 

Janet Yellen, 

Defendants—Appellees. 

______________________________ 

Appeal from the United States District Court 

for the Southern District of Texas 

USDC No. 4:16-CV-3113 

______________________________ 

Before Smith, Southwick, and Higginson, Circuit Judges.

Jerry E. Smith, Circuit Judge: 

This is an appeal challenging the dismissal of plaintiffs’ claims under 

Federal Rule of Civil Procedure 12(b)(6). Plaintiffs are private shareholders 

of Fannie Mae and Freddie Mac—government sponsored home mortgage 

companies. Defendants include the Federal Housing Finance Agency 

(“FHFA”), the Treasury, and the Secretary of the Treasury and Director of 

the FHFA in their official capacities. This litigation began in 2016 and comes 

United States Court of Appeals 

Fifth Circuit 

FILED 

October 12, 2023 

Lyle W. Cayce 

Clerk 

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2 

to us on remand from Collins v. Yellen, where plaintiffs persuaded the 

Supreme Court that the statutory provision restricting the President’s ability 

to remove the director of the FHFA violates the separation of powers. 

141 S. Ct. 1761, 1783 (2021). We remanded to the district court for the limited purpose of determining whether that unconstitutional removal restriction caused plaintiffs’ harm. 

The district court concluded that plaintiffs had not plausibly alleged 

that the removal restriction caused them harm and dismissed their claims. It 

also dismissed their claims—raised for the first time on remand—that the 

FHFA’s funding mechanism is inconsistent with the Appropriations Clause, 

concluding that the claims were outside the scope of the Collins remand order 

in violation of the mandate rule. 

Plaintiffs raise two issues on appeal. The first is whether the district 

court erred in dismissing their claims that the unconstitutional removal 

restriction caused them harm. The second is whether the court erred in dismissing their Appropriations Clause claims. 

We reject these contentions. For the reasons that follow, we affirm 

the dismissal of the removal and Appropriations Clause claims. 

I. 

Fannie Mae and Freddie Mac are privately owned companies that 

operate under congressional charter. They are two of the nation’s leading 

sources of mortgage financing. They purchase residential mortgages, pool 

them into mortgage-backed securities, and sell those securities to investors. 

By 2007, the companies’ portfolio accounted for almost half of the nation’s 

residential mortgage market. 

When the housing market collapsed in 2008, the companies experienced large losses on account of the rise in defaults on residential mortgages. 

Their failure would have had a catastrophic impact on the housing market, 

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sending it further into a tailspin. Congress attempted to head off this catastrophe by enacting the Housing and Economic Recovery Act (“HERA”) of 

2008.1

 HERA created the FHFA and gave it the authority to appoint itself 

as the companies’ conservator in certain specified circumstances, such as 

when the companies possess insufficient assets to meet their obligations. 

12 U.S.C. § 4617(a)(3). The companies were placed into conservatorship in 

September 2008 and remain there to this day. HERA also provided that the 

FHFA Director would serve a five-year term and could be removed only for 

cause. 12 U.S.C. § 4512 (b)(2). Like other financial regulators, “the FHFA 

is not funded through the ordinary appropriations process,” Collins, 

141 S. Ct. at 1172, but rather through annual assessments on regulated entities, see 12 U.S.C. § 4516(a). 

Soon after HERA became law and the FHFA placed the companies 

into conservatorship, the FHFA—as conservator—entered into two preferred stock purchase agreements (“PSPAs”) with the U.S. Treasury. The 

Treasury agreed to provide up to $100 billion in funding for each company to 

draw on if its liabilities exceeded its assets. In return, the Treasury received 

four benefits: First, it had the option to buy 79.9% of the companies’ common 

stock at a nominal price and receive all associated benefits. Second, it received one-million shares of senior preferred stock in each company. That 

preferred stock had a liquidation preference equal to $1 billion per company 

with a dollar-to-dollar increase if the companies drew from the $100 billion 

capital commitment.2 Third, the Treasury was entitled to quarterly cash 

_____________________ 

1

 Pub L. No. 110-289, 122 Stat. 2654 (2008) (codified as amended at 12 U.S.C. 

§ 4501 et seq.). 

2

 A liquidation preference is a preferred shareholder’s right to receive a specified 

distribution before common stockholders receive anything. See, e.g., Michael Klausner & 

Stephen Venuto, Liquidation Rights and Incentive Misalignment in Start-Up Financing, 

98 Cornell L. Rev. 1399, 1404-07 (2013). In this case, if either company is liquidated, 

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dividends at an annual rate equal to 10% of the current liquidation preference. 

Fourth, it was entitled to a quarterly commitment fee. 

The Treasury and the FHFA have made several amendments to the 

initial PSPAs. Most relevant here is the third amendment. Because of the 

companies’ continued losses, they had drawn large amounts from the Treasury’s capital commitment. That increased the size of the Treasury’s liquidation preference, which resulted in the companies’ having to pay a larger 

quarterly cash dividend to the Treasury. To meet that increased obligation, 

the third amendment imposed a “Net Worth Sweep,” which divorced the 

companies’ dividend obligations from the Treasury’s liquidation preference 

and required them to pay the Treasury nearly their entire net worth every 

quarter as a dividend. The Sweep ensured that any value the companies generated would go to the Treasury and not to junior preferred and common 

stockholders such as plaintiffs. 

When President Trump took office in January 2017, his Administration announced two overarching goals for the companies: (1) End the conservatorships and (2) end government ownership by selling the Treasury’s 

shares. But the President was unable to nominate his own FHFA Director 

immediately because in December 2013, President Obama had nominated—

and the Senate had confirmed—Melvin Watt, whose five-year term expired 

in January 2019. 

Upon the expiration of Director Watt’s term, President Trump nominated Mark Calabria to serve as FHFA Director, and the Senate confirmed 

Director Calabria in April 2019. But before the companies could exit the 

_____________________ 

the Treasury has the right to be paid back $1 billion plus whatever dollar amount the company had drawn from the Treasury’s $100 billion capital commitment. The Treasury also 

has the right to have proceeds from any new stock issuance be used to pay down the 

liquidation preference. 

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conservatorships and transition to fully private entities, they needed to raise 

outside capital from private investors, to ensure that they would remain 

financially viable after the Treasury’s withdrawal. If the companies exited 

the conservatorships without sufficient private capital reserves, they risked 

needing another Treasury-backed capital infusion if they did not rapidly 

become profitable. Trump Administration officials were expecting a public 

offering of the companies’ stock in 2021 but were unable to hold the offering 

before the beginning of the Biden Administration. 

II. 

Plaintiffs, as individual shareholders of the companies, sued in 2016, 

challenging the third amendment and the Net Worth Sweep by urging that 

the FHFA Director’s removal protection was unconstitutional. See Collins, 

141 S. Ct. at 1775. The district court granted summary judgment in favor of 

the FHFA on the removal claim, but a panel of our circuit reversed. See 

Collins v. Mnuchin, 896 F.3d 640, 646, 676 (5th Cir. 2018) (per curiam). We 

reheard the case en banc, determined that the removal provision violated the 

separation of powers, and held that the proper remedy was to sever the 

removal restriction from the rest of HERA. See Collins v. Mnuchin, 938 F.3d 

553, 587, 595 (5th Cir. 2019) (en banc). 

The Supreme Court granted certiorari and held that the “for-cause 

restriction on the President’s removal authority violates the separation of 

powers.” Collins, 141 S. Ct. at 1783.3

 But the Court made clear that, because 

the Director who adopted the third amendment was properly appointed, no 

“actions taken by the FHFA in relation to the third amendment [were] 

void.” Id. at 1787. Therefore, the Court refused to “hold that the third 

_____________________ 

3

 Plaintiffs also asserted that the FHFA Director exceeded his statutory authority 

as conservator by adopting the third amendment, but the Supreme Court rejected that 

theory. See Collins, 141 S. Ct. at 1778. 

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amendment must be completely undone.” Id. at 1788. That holding, however, did “not necessarily mean . . . that the shareholders have no entitlement 

to retrospective relief.” Id. Rather, “it is still possible for an unconstitutional 

provision to inflict compensable harm[,]” so the Court could not rule out 

“the possibility that the unconstitutional restriction on a President’s power 

to remove a Director of the FHFA could have such an effect.” Id. at 1788–

89. 

Collins left it to the lower courts on remand to resolve whether the 

unconstitutional removal provision caused harm to plaintiffs as shareholders. 

To provide guidance, the Court gave two hypothetical situations in which the 

FHFA’s removal provision would clearly cause harm. 

Suppose, for example, that the President had attempted to 

remove a director but was prevented from doing so by a lower 

court decision holding that he did not have “cause” for removal. Or suppose that the President had made a public statement expressing displeasure with the actions taken by a director and had asserted that he would remove the director if the 

statute did not stand in the way. 

Id. at 1789. 

 On remand, the en banc court addressed whether the removal restriction caused plaintiffs’ harm. Collins v. Yellen, 27 F.4th 1068 (5th Cir. 2022) 

(en banc). A majority decided to remand the question of harm to the district 

court, but five judges believed the harm issue could be resolved in favor of 

defendants without further remand. See id. at 1069–70 (Haynes, J., 

dissenting). 

Plaintiffs filed an amended complaint on remand, bringing claims 

under the Administrative Procedure Act (“APA”) and directly under the 

Constitution. They alleged that the unconstitutional removal provision prevented the Trump Administration from ending the conservatorships and 

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government ownership of the companies.4 Specifically, they claim that the 

Trump Administration would have taken a series of steps to accomplish these 

goals—one of which would have been raising capital from an issue of new 

stock. According to plaintiffs, before such a stock issuance occurred, the 

Trump Administration would need to eliminate the Treasury’s liquidation 

preferences to make the stock attractive to private investors. 

But Director Watt supposedly opposed ending the conservatorships, 

so the Administration could not make any progress during the duration of 

Watt’s term. This meant the Administration allegedly did not have enough 

time between the confirmation of Director Calabria in January 2019 and the 

beginning of President Biden’s term in January 2021 to end the conservatorships and government ownership of the companies. 

As a result, plaintiffs reason that the unconstitutional removal restriction caused harm because the Trump Administration would have had the 

time needed to issue new stock had the President been able to remove Director Watt immediately. Such an issuance necessarily requires elimination 

of the liquidation preferences, which would have increased the value of plaintiffs’ shares. Plaintiffs thus seek an injunction directing the FHFA and the 

Treasury to eliminate the liquidation preference on the Treasury’s preferred 

_____________________ 

4

 The amended complaint alleged that President Trump’s inability to remove Director Watt prevented the Trump Administration from ending the conservatorships and 

government ownership of the companies. Plaintiffs claimed their harm allegedly stemmed 

from the Administration’s failure to exit the conservatorships and return the companies to 

private control. The amended complaint sought removal of the Treasury’s liquidation 

preferences only to remedy the harm they allegedly suffered from the Trump Administration’s failure to exit the conservatorships and return the companies to private control. Any 

attempt by plaintiffs in their briefs to claim that they are challenging the Administration’s 

failure to remove the Treasury’s liquidation preferences cannot be given effect. See Pin v. 

Texaco, Inc., 793 F.2d 1448, 1450 n.4 (5th Cir. 1986) (“The brief on appeal, of course, is not 

the appropriate place to amend a complaint.”). 

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stock. 

The amended complaint also alleges—for the first time—that the 

FHFA’s financing structure violates the Appropriations Clause. Plaintiffs 

seek a declaration that the FHFA’s funding structure violates the separation 

of powers and an order vacating and setting aside the third amendment 

and/or the PSPAs. 

Defendants moved to dismiss all counts for failure to state a claim. 

The district court granted the motion in its entirety and dismissed all claims 

with prejudice. It held that plaintiffs’ removal claims exceeded this court’s 

mandate on remand, and—alternatively—determined that plaintiffs could 

not plausibly show that the President’s inability to remove Watt caused harm 

because the Trump Administration lacked a concrete plan for ending the 

conservatorship. Further, even if plaintiffs had such a plan, the court also 

determined that the pleadings did not show that the Administration would 

have been able to accomplish it within four years. The district court also 

dismissed the Appropriations Clause claims, concluding they were outside 

the mandate of this court’s remand order. 

III. 

We review a dismissal de novo. Cicalese v. Univ. Tex. Med. Branch, 

924 F.3d 762, 765 (5th Cir. 2019). We may affirm a dismissal “on any basis 

supported by the record.” Asadi v. G.E. Energy U.S., L.L.C., 720 F.3d 620, 

622 (5th Cir. 2013). 

To withstand a motion to dismiss under Rule 12(b)(6), a complaint 

must present enough facts to state a plausible claim to relief. See Bell Atl. 

Corp. v. Twombly, 550 U.S. 544, 570 (2007). A plaintiff need not provide 

exhaustive detail to avoid dismissal, but the pleaded facts must allow a reasonable inference that the plaintiff should prevail. See id. at 555. Facts that 

only conceivably give rise to relief do not suffice. See id. Thus, although we 

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generally take as true what a complaint alleges, we do not credit a complaint’s 

legal conclusions or “[t]hreadbare recitals of the elements of a cause of 

action.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). We also “review de 

novo a district court’s interpretation of our remand order, including whether 

the law-of-the-case doctrine or mandate rule forecloses any of the district 

court’s actions on remand.” United States v. Pineiro, 470 F.3d 200, 204 (5th 

Cir. 2006). 

IV. 

The district court held that plaintiffs’ removal claims “far surpass[ed]” the Supreme Court’s “mandate for retrospective relief.” See Collins v. Lew, 642 F. Supp. 3d 577, 586 (S.D. Tex. 2022). Defendants contend 

that we can affirm on that ground alone.5

The mandate rule “provides that a lower court on remand must 

implement both the letter and the spirit of the appellate court’s mandate and 

may not disregard the explicit directives of that court.” United States v. 

Becerra, 155 F.3d 740, 753 (5th Cir. 1998) (cleaned up). When implementing 

a mandate, the district court must take “into account the circumstances that 

[the appellate court’s] opinion embraces.” Sobley v. S. Nat. Gas Co., 

302 F.3d 325, 333 (5th Cir. 2002). 

The original complaint sought retrospective relief relating to the 

“implementation of the Third Amendment.” See Collins, 141 S. Ct. at 1788–

89. The Supreme Court therefore discussed “remedy with respect to only 

the actions that confirmed directors have taken to implement the Third 

Amendment during their tenures.” Id. at 1787. The issue Collins directed 

_____________________ 

5

 Though this case is technically on remand from our circuit, not the Supreme 

Court, we remanded “for further proceedings consistent with the Supreme Court’s 

decision.” Collins, 27 F.4th at 1069. Our court’s mandate was therefore identical to the 

Supreme Court’s. 

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the lower courts to decide, however, was whether the unconstitutional 

removal restriction inflicted compensable harm on the companies’ shareholders. Id. at 1789. Collins expressly recognized plaintiffs’ “claim that the 

unconstitutional removal provision inflicted harm” and that the “federal 

parties disputed the possibility that the unconstitutional removal provision 

caused any such harm.” Id. Because Collins directed the lower courts to 

resolve that dispute, any harm that plaintiffs could plausibly allege was on 

account of the President’s inability to remove Director Watt is within “the 

letter and the spirit” of the mandate and not contrary to any “explicit directives” of Collins. See Becerra, 155 F.3d at 753. 

Therefore, the district court erred in holding that plaintiffs’ removal 

claims fell outside the scope of the Collins remand order. The mandate rule 

does not bar our consideration of these claims. 

V. 

Defendants next aver that HERA’s “anti-injunction” clause prevents 

judicial review of plaintiffs’ removal claims. HERA contains an FHFAspecific provision that “sharply circumscribe[s] judicial review of any action 

that the FHFA takes as a conservator or receiver.” Collins, 141 S. Ct. at 1775. 

Specifically, “no court may take any action to restrain or affect the exercise 

of powers or functions of the [FHFA] as a conservator or a receiver.” 

12 U.S.C. § 4617(f). This anti-injunction clause “prohibits relief where the 

FHFA action at issue fell within the scope of the Agency’s authority as conservator, but that relief is allowed if the FHFA exceeded that authority.” 

Collins, 141 S. Ct. at 1776.6

 

_____________________ 

6

 By its terms, § 4617(f) prohibits more than just injunctions, but the parties and 

the Supreme Court in Collins refer to it as either the anti-injunction clause or the antiinjunction provision, so we do the same. 

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Plaintiffs respond that the anti-injunction clause does not apply 

because Director Watt exceeded his authority by exercising the powers of 

FHFA director when, but for HERA’s unconstitutional removal protection, 

President Trump would have removed him from office. Collins forecloses 

that contention by holding that because “the officers who headed the FHFA 

during the time in question were properly appointed[,]” there was “no basis 

for concluding that any head of the FHFA lacked the authority to carry out 

the functions of the office.” Collins, 141 S. Ct. at 1787–88. This holding 

means that Watt had the authority to act as the FHFA throughout his tenure 

as Director because he was properly appointed to the office. 

Therefore, the anti-injunction clause applies and prevents courts from 

taking “any action to restrain or affect the exercise of powers or functions of 

the [FHFA] as a conservator or a receiver.” 12 U.S.C. § 4617(f). Because 

plaintiffs seek injunctive relief that would require the FHFA to take specific 

actions as conservator to restore plaintiffs to the position they would have 

been in if not for the unconstitutional removal restriction, they asked the district court to “affect” [sic] the “function of the [FHFA] as a conservator[.]” 

Id. So, plaintiffs’ APA claims are barred. 

But plaintiffs also brought a removal claim directly under the Constitution in count I of their amended complaint. They invoke Webster v. Doe to 

contend that judicial review cannot be precluded for this claim absent a clear 

statement to that effect. 486 U.S. 592, 603 (1988). Doe requires “that where 

Congress intends to preclude judicial review of constitutional claims[,] its 

intent to do so must be clear.” Id. The Doe rule is an interpretive tool of 

constitutional avoidance. Id. (requiring this heightened showing to avoid the 

serious constitutional question that would arise if a federal statute were construed to deny any judicial forum for a colorable constitutional claim); see also

Zummer v. Sallet, 37 F.4th 996, 1008–13 (5th Cir. 2022), cert. denied, 143 S. 

Ct. 1019 (2023). This circuit has refused to find the needed congressional 

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intent where the statute in question did not “explicitly preclude constitutional claims.” Ellison v. Connor, 153 F.3d 247, 254 (5th Cir. 1998). 

In FDIC v. Bank of Coushatta, we construed a provision of the Federal 

Deposit Insurance Act that prevented courts from enjoining any notice or 

order the Federal Deposit Insurance Corporation (“FDIC”) issued to regulated banks under the Act. 930 F.2d 1122, 1125–26 (5th Cir. 1991). The relevant statute said that “no court shall have jurisdiction to affect by injunction 

or otherwise the issuance or enforcement of any notice or order under this 

section, or to review, modify, suspend, terminate, or set aside any such notice 

or order.” 12 U.S.C. § 1818(i). We said that that language did not preclude 

review of constitutional claims. See Coushatta, 930 F.2d at 1130.7

 

Coushatta and Ellison defeat the FHFA’s argument that § 4617(f) 

contains the clear statement needed to preclude plaintiffs’ constitutional 

claim. Nowhere does § 4617(f) “explicitly preclude constitutional claims.” 

Ellison, 153 F.3d at 254. And § 4617(f) contains language very similar to 

§ 1818(i).8

Finally, unlike in Zummer, no party has identified “overriding consid-

_____________________ 

7

 This part of Coushatta is not binding because the FDIC conceded that § 1818(i) 

did not bar constitutional claims. But the panel nonetheless expressly said that it did not 

find the needed congressional intent to preclude judicial review of constitutional claims. 

See Coushatta, 930 F.2d at 1130. Given that statement and § 1818(i)’s and § 4617(f)’s 

similar language and context, Coushatta is at least persuasive authority. Cf. Humphrey’s 

Ex’r v. United States, 295 U.S. 602, 627 (1935) (“[D]icta . . . may be followed if sufficiently 

persuasive . . . .”). 

8 Compare 12 U.S.C. § 1818(i) (“[N]o court shall have jurisdiction to affect by 

injunction or otherwise the issuance or enforcement of any notice or order under this 

section, or to review, modify, suspend, terminate, or set aside any such notice or order.”), 

with 12 U.S.C. § 4617(f) (“[N]o court may take any action to restrain or affect the exercise 

of powers or functions of the [FHFA] as a conservator or a receiver.”). 

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erations” that would counsel against applying Doe’s canon of interpretation.9

Defendants also attempt to recharacterize plaintiffs’ constitutional 

claim as an APA claim. They cite Justice Thomas’s concurrence in Collins

for the proposition that the only claims available to plaintiffs are APA claims; 

they direct us to a district court opinion adopting that analysis. See Collins, 

141 S. Ct. at 1794 n.7 (Thomas, J., concurring); Bhatti v. FHFA, 646 F. Supp. 

3d 1003, 1010–11 (D. Minn. 2022). Justice Thomas believes that plaintiffs 

cannot bring a constitutional claim because Director Watt was not acting 

unconstitutionally at any time during his tenure. See Collins, 141 S. Ct. 

at 1794–95. The only claim Justice Thomas thinks plaintiffs can assert is an 

APA-based claim alleging that Watt’s actions were arbitrary, capricious, an 

abuse of discretion, or otherwise not in accordance with law. See id.

at 1794 n.7. 

Whatever merit that concurrence has, we are bound by the Collins

majority opinion. Despite recognizing that the unconstitutional removal 

restriction did not deprive Watt of lawful authority, the Collins majority made 

clear that “it is still possible for an unconstitutional provision to inflict compensable harm.” Id. at 1789. The majority opinion thus allowed plaintiffs 

the chance to show that they were harmed here. See id. at 1788–89. Nowhere 

did the majority limit the avenues of relief to the APA.10 This means that the 

_____________________ 

9 Zummer, 37 F.4th at 1009 (refusing to apply Doe where there were “countervailing doubts about the constitutionality” of reviewing the agency decision and the panel did 

not gravely doubt the constitutionality of precluding review). The FHFA contends that an 

injunction forcing it to eliminate the liquidation preferences would be extremely intrusive 

to the Biden Administration. But that bears on the constitutionality of the remedy that 

plaintiffs seek, not our ability to hear the constitutional claim. 

10 Cf. Free Enter. Fund v. Pub. Co. Acct. Oversight Bd., 561 U.S. 477, 491 n.2 (2010) 

(allowing a party to seek equitable relief when making an “Appointments Clause or 

separation-of-powers claim”). 

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FHFA is wrong in trying to turn count I into an APA claim because Collins

specifically said that “the unconstitutional restriction on the President’s 

power to remove a Director of the FHFA” is what could “inflict compensable harm” on plaintiffs. 141 S. Ct. at 1788–89. Count I of the complaint 

was therefore properly brought directly under the Constitution and was not 

barred by § 4617(f). 

This analysis is buttressed by the nature of the majority opinion in 

Collins. The plaintiffs brought both statutory and constitutional challenges 

to the third amendment. See id. at 1775. The majority dedicated nearly four 

pages to explaining why § 4617(f) barred plaintiffs’ statutory challenge to the 

third amendment. See id. at 1776–79. Yet the opinion did not mention 

§ 4617(f) when discussing whether plaintiffs could show that the unconstitutional removal restriction caused them harm. See id. at 1787–89. If 

§ 4617(f) barred consideration of constitutional claims, one would expect the 

opinion would have noted that. It would be strange for Collins to leave open 

the possibility of retrospective relief based on an unconstitutional removal 

restriction, give examples of when such relief would be available, and remand 

the case for resolution of that issue if the entire question was outside our 

ability to review. 

Therefore, § 4617(f) does not bar count I of the amended complaint 

seeking relief directly under the Constitution, and we may finally proceed to 

the merits of plaintiffs’ contention that HERA’s unconstitutional removal 

provision caused compensable harm. 

VI. 

“[A]fter Collins, a party challenging agency action must show not only 

that the removal restriction transgresses the Constitution’s separation of 

powers but also that the unconstitutional provision caused (or would cause) 

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them harm.”11 Collins gave two hypothetical situations in which the FHFA’s 

removal provision would clearly cause harm. Harm would occur if “the 

President had attempted to remove a director but was prevented from doing 

so by a lower court decision holding that he did not have ‘cause’ for 

removal.” Collins, 141 S. Ct. at 1789. The removal provision also would 

cause harm if “the President had made a public statement expressing displeasure with the actions taken by a [d]irector and had asserted that he would 

remove the [d]irector if the statute did not stand in the way.” Id. 

CFSA “distill[ed] from these hypotheticals three requisites for proving harm: (1) a substantiated desire by the President to remove the unconstitutionally insulated actor, (2) a perceived inability to remove the actor due to 

the infirm provision, and (3) a nexus between the desire to remove and the 

challenged actions” taken by Director Watt. CFSA, 51 F.4th at 632. The 

last prong is satisfied upon a showing that “but for the removal restriction, 

President Trump would have removed [Director Watt] and that the [FHFA] 

would have acted differently as to” the challenged actions. Id. at 633. “[S]econdhand accounts of President Trump’s supposed intentions are insufficient 

to establish harm.” Id.

CFSA made clear that plaintiffs must show a “nexus between the 

desire to remove and the challenged actions taken by the insulated actor” to 

prove that an unconstitutional removal restriction caused them harm. See id. 

That makes it necessary to determine exactly which FHFA action plaintiffs 

are challenging. The briefs are not entirely clear on this issue, but the 

_____________________ 

11 Cmty. Fin. Servs. Ass’n of Am., Ltd. v. CFPB (CFSA), 51 F.4th 616, 632 (5th Cir. 

2022), cert. granted, 143 S. Ct. 978 (2023). The grant of certiorari does not change the fact 

that CFSA remains binding precedent in this case unless and until the Supreme Court says 

otherwise. See Wicker v. McCotter, 798 F.2d 155, 157–58 (5th Cir. 1986). In any event, the 

Court agreed to hear the case only to decide the constitutionality of the CFPB’s funding 

structure. See Cmty. Fin. Servs. Ass’n of Am., Ltd. v. CFPB, 143 S. Ct. 981 (2023). 

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amended complaint appears to be challenging Watt’s failure to exit the conservatorships and return the companies to private control and seeks the elimination of the liquidation preferences as a remedy for the harm resulting from 

this failure. 

This means that plaintiffs must allege sufficient facts plausibly to 

claim that “but for the removal restriction” the Trump Administration 

would have exited the conservatorships and returned the companies to private control. See Twombly, 550 U.S. at 570; CFSA, 51 F.4th at 633. Considering all facts asserted in the amended complaint, plaintiffs fail to make 

that showing.12 

Plaintiffs’ chief support for their removal claim is a letter—written a 

few months after the Collins decision—from former President Trump to 

Senator Rand Paul.13 The letter explicitly says that President Trump would 

have fired Watt from his position as Director. President Trump then says 

that he would have ordered FHFA to release those companies from conservatorship, sold the Treasury’s common stock at a huge profit, and fully privatized the companies. 

Plaintiffs allege that the Trump Administration had a five-step plan to 

accomplish these goals. First, they contend that the Administration would 

have modified the PSPAs in a way that would remove the Net Worth Sweep 

and allow the companies to build net worth. Second, the companies would 

be directed to stop paying the Treasury quarterly cash dividends. Third, the 

_____________________ 

12 Because we conclude that the amended complaint in its entirety has failed to 

present sufficient factual allegations to survive a motion to dismiss, we need not reach 

defendants’ contentions that certain facts alleged in the amended complaint cannot be 

considered. 

13 Plaintiffs attached the letter to the complaint, so it is part of the pleadings. See 

Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir. 2000). 

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FHFA would implement a new regulatory framework, setting capital guidelines for the companies once they had been returned to private control. 

Fourth, the FHFA and the companies would develop plans for raising the 

financial capital needed to exit conservatorship safely. Fifth, and finally, the 

FHFA would raise this capital by holding a public sale of new stock. According to plaintiffs, this last step required the elimination of the liquidation 

preferences because no private investor would purchase shares of the companies while the Treasury retained the right to receive preferred 

distributions. 

The facts in the amended complaint show that President Trump had 

“a substantiated desire . . . to remove” Director Watt and “a perceived inability to” do so because of HERA’s removal restriction. See CFSA, 51 F.4th 

at 632. But the complaint fails plausibly to allege “a nexus between the desire 

to remove and the” Trump Administration’s failure to exit the conservatorships and return the companies to fully private control. See id. There is 

nothing in the amended complaint showing that the companies would have 

exited the conservatorships and returned to private control if the Trump 

Administration had a full four years with its chosen director. The amended 

complaint contains no well-pleaded facts demonstrating that the five-step 

plan would have been completed if President Trump had an extra two years 

with Director Calabria as the head of the FHFA. At most, the amended complaint alleges that the Trump Administration would have eliminated the 

liquidation preferences in preparation for a public offering of shares that was 

scheduled to take place in 2021, roughly two years after Director Calabria 

took office.14 

_____________________ 

14 This allegation is inconsistent with the amended complaint’s statement that the 

Trump Administration increased the Treasury’s liquidation preference in January 2021. 

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Even if the liquidation preferences had been eliminated and a public 

offering held two years after Director Calabria assumed office, the plaintiffs 

plead no facts explaining how a public offering of new shares would eliminate 

the Treasury’s existing ownership stake in the companies or result in the end 

of the conservatorships. In other words, all the complaint plausibly alleges is 

that—after two years with Calabria as the head of the FHFA—the Trump 

Administration would have held a public offering of shares, and that offering 

would likely have resulted in the elimination of the Treasury’s liquidation 

preferences. No well-pleaded facts support plaintiffs’ allegations that—

given another two years of Director Calabria—the Administration would 

have completed its five-step plan, guided the companies out of conservatorship, and returned them to fully public control before President Biden took 

office. 

Therefore, the facts in the amended complaint only conceivably give 

rise to a conclusion that “but for the removal restriction” the Trump Administration would have exited the conservatorships and returned the companies 

to private control. See Twombly, 550 U.S. at 570; CFSA, 51 F.4th at 633. That 

level of uncertainty and speculation cannot survive a motion to dismiss, so 

the dismissal of plaintiffs’ removal claims was proper. 

VII. 

Turning to plaintiffs’ theory that the FHFA’s funding structure violates the Appropriations Clause, the district court dismissed these claims 

after determining that they were outside the mandate of the Collins remand 

order. As discussed above, the mandate rule “provides that a lower court on 

_____________________ 

plaint. See Leal v. McHugh, 731 F.3d 405, 414 (5th Cir. 2013). Therefore, we must accept 

as true that the Trump Administration would have eliminated the liquidation preferences 

before making a public offering of shares. Cf. Foster v. City of Lake Jackson, 28 F.3d 425, 

428 (5th Cir. 1994). 

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remand must implement both the letter and the spirit of the appellate court’s 

mandate and may not disregard the explicit directives of that court.” Becerra, 

155 F.3d at 753 (5th Cir. 1998) (cleaned up). But the mandate rule does not 

apply when “‘there has been an intervening change of law by a controlling 

authority.’” Ball v. LeBlanc, 881 F.3d 346, 351 (5th Cir. 2018) (quoting 

United States v. McCrimmon, 443 F.3d 454, 460 (5th Cir. 2006)). One case 

from our circuit refused to apply this exception when the “constitutional 

argument existed” in the prior proceeding. See McCrimmon, 443 F.3d at 462. 

The majority opinion in Collins made clear that it is “possible for an 

unconstitutional provision to inflict compensable harm.” Collins, 141 S. Ct. 

at 1789. The Court, however, did not decide whether plaintiffs had demonstrated that “the unconstitutional restriction on the President’s power to 

remove a Director of the FHFA” caused them harm. Id. Instead, Collins

remanded, directing that this question was to be “resolved in the first 

instance by the lower courts.” Id. 

“[T]he letter and the spirit” of this mandate leave no opening for 

plaintiffs to bring a challenge under a completely different constitutional 

theory for the first time on remand. See Becerra, 155 F.3d at 753. Plaintiffs 

contend that Collins recognized a fundamental shift in the constitutional separation of powers as applied to the FHFA and that the natural follow-on question is whether Congress should be permitted to exercise its constitutional 

appropriation power over the FHFA. That may or may not be true, but it 

does not change the fact that the FHFA’s funding structure has nothing to 

do with the issue for which Collins remanded: whether President Trump’s 

inability to remove Director Watt caused plaintiffs’ compensable harm. Considering any other issue would “disregard the explicit directives of” Collins. 

Becerra, 155 F.3d at 753. 

Plaintiffs also contend that the mandate rule should not apply because 

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both Collins and CFSA constituted an “intervening change in law by a controlling authority.” LeBlanc, 881 F.3d at 351. This circuit’s caselaw is not 

well developed on what counts as an intervening change in law, but whatever 

the exact contours of this exception may be, neither Collins nor CFSA

qualifies. Collins was not an intervening change in law because it was not an 

Appropriations Clause case.15 Neither the majority opinion nor any of the 

four separate concurrences and dissents cited the Appropriations Clause. 

The majority does refer to the FHFA’s funding structure, but merely as a 

passing reference in the factual summary of the opinion that has no relevance 

to the legal analysis.16 Therefore, Collins in no way changes the law with 

respect to the Appropriations Clause and cannot be an intervening change in 

law that justifies ignoring the mandate rule. 

The argument that CFSA represents an intervening change in law is 

stronger because CFSA was at least an Appropriations Clause case. See

51 F.4th at 635. A careful read, however, shows that CFSA did not change 

any law with respect to the FHFA’s funding structure. CFSA went to 

exceptional lengths to limit its Appropriations Clause analysis to its facts: the 

funding structure of the Consumer Financial Protection Bureau (“CFPB”).17 

The opinion even expressly distinguished the FHFA by name.18 Given that 

the CFSA opinion, by its terms, did not apply to the funding structure of the 

_____________________ 

15 Cf. Collins, 141 S. Ct. at 1770 (“[T]he shareholders argued that the FHFA’s 

structure violates the separation of powers because the Agency is led by a single Director 

who may be removed by the President only for cause.”)). 

16 See id. at 1772. 

17 See 51 F.4th at 641 (“Even among self-funded agencies, the [CFPB] is unique” 

because its “perpetual self-directed, double-insulated funding structure goes a significant 

step further than that enjoyed by the other agencies on offer.”). 

18 See id. (calling a comparison of the CFPB to the FHFA “mix[ing] apples with 

oranges”). 

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FHFA, the constitutional argument against the funding structure “existed” 

in its current form in the prior proceeding. See McCrimmon, 443 F.3d at 462. 

Therefore, CFSA was not an “intervening change in the law,” and we must 

abide by the Collins mandate. Id. at 460. 

As tempting as it may be to reach the novel question of whether the 

FHFA’s funding mechanism is constitutional, the issue is not within the 

mandate of the Collins remand order, and plaintiffs have cited no relevant 

intervening change in law that would justify departing from that mandate. 

The district court properly invoked the mandate rule to dismiss these claims. 

* * * * * 

The judgment dismissing the removal and Appropriations Clause 

claims is AFFIRMED. 

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