Enforceability of Certain Agreements Between 

the Department of the Treasury and 

Government-Sponsored Enterprises

The Amended and Restated Senior Preferred Stock Purchase Agreements between the United States 

Department of the Treasury and the Federal National Mortgage Association and the Federal Home 

Loan Mortgage Corporation, according to their terms, would create rights enforceable through 

actions brought in the United States Court of Federal Claims in accordance with the ordinary rules 

and procedures governing litigation in that Court. 

September 26, 2008 

LETTER OPINION FOR THE SECRETARY OF THE TREASURY

I am writing with regard to the Amended and Restated Senior Preferred Stock 

Purchase Agreements (“the Agreements”) between the United States Department 

of the Treasury (“Treasury”), and the Federal National Mortgage Association and 

the Federal Home Loan Mortgage Corporation, respectively (collectively the

“Government-Sponsored Enterprises” or “GSEs”). You have asked for our view 

whether the Agreements create enforceable rights against Treasury for certain 

holders of debt securities and beneficiaries of Mortgage Guarantee Obligations 

issued by the GSEs (collectively “the Holders”).∗

Under the Agreements, following a payment default by a GSE with respect to 

any Holders, and in the event Treasury fails to perform its obligations to either of 

the GSEs in respect of any draw on the Commitments, those Holders may file 

claims in the United States Court of Federal Claims for relief requiring Treasury to 

pay the relevant GSE a specified amount (called “the Demand Amount”) in the 

form of liquidated damages. After consultation with the Civil Division of the 

Department of Justice, we conclude that the United States Court of Federal Claims 

generally would have jurisdiction under the Tucker Act to entertain claims brought 

by the Holders for liquidated damages, payable to a GSE, according to the terms 

of the Agreements, if Treasury failed to perform its obligation under the Agreements to fund the Commitment in the event of a payment default by the GSE to 

the Holders. The general jurisdictional provision of the Tucker Act, section 

1491(a)(1) of title 28 of the United States Code, authorizes the Court of Federal 

Claims “to render judgment upon any claim against the United States founded” on, 

among other bases, “any express . . . contract with the United States, or for 

liquidated . . . damages in cases not sounding in tort.” A Holder’s claim against 

Treasury for liquidated damages, payable to a GSE, under the Agreements falls 

within the general scope of section 1491(a)(1). It is established that the Court of 

Federal Claims has jurisdiction under section 1491(a)(1) to hear a breach of 

∗ Any capitalized terms used but not defined in this letter opinion have the meanings set forth in the 

Agreements. 

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Opinions of the Office of Legal Counsel in Volume 32 

contract claim brought by a properly authorized party for payment of damages 

owed to a corporation. See First Hartford Corp. Pension Plan & Trust v. United 

States, 194 F.3d 1279, 1293–94 (Fed. Cir. 1999). Accordingly, the Court of 

Federal Claims generally would have jurisdiction under this provision of the 

Tucker Act to hear such claims by Holders. Because the Tucker Act constitutes 

express statutory consent to the award of monetary relief against the United States, 

the sovereign immunity of the United States would not be a bar to any such claim. 

See United States v. Mitchell, 463 U.S. 206, 212 (1983) (“[T]he Tucker Act 

constitutes a waiver of sovereign immunity.”); Adair v. United States, 497 F.3d 

1244, 1250 (Fed. Cir. 2007) (Tucker Act “waives the government’s sovereign 

immunity for these claims”).

We therefore conclude that the Agreements, according to their terms, would 

create rights enforceable through actions brought in the Court of Federal Claims in 

accordance with the ordinary rules and procedures governing litigation in that 

Court.

STEVEN G. BRADBURY 

Principal Deputy Assistant Attorney General

Office of Legal Counsel

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