PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 16-1384

MERIDIAN INVESTMENTS, INC.,

Plaintiff − Appellant,

v.

FEDERAL HOME LOAN MORTGAGE CORPORATION; FEDERAL 

HOUSING FINANCE AGENCY, Conservator for Federal Home Loan Mortgage 

Corporation,

Defendants − Appellees.

--------------------------------------

TIMOTHY HOWARD, 

Amicus Supporting Appellant.

Appeal from the United States District Court for the Eastern District of Virginia, at 

Alexandria. James C. Cacheris, Senior District Judge. (1:15−cv−01463−JCC−TCB)

Argued: March 22, 2017 Decided: April 28, 2017 

Before NIEMEYER, DUNCAN, and HARRIS, Circuit Judges.

Affirmed by published opinion. Judge Duncan wrote the opinion, in which Judge 

Niemeyer and Judge Harris joined.
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ARGUED: Jay Ian Igiel, NEALON & ASSOCIATES, P.C., Alexandria, Virginia, for 

Appellant. Howard N. Cayne, ARNOLD & PORTER LLP, Washington, D.C., for 

Appellees. ON BRIEF: Robert B. Nealon, NEALON & ASSOCIATES, P.C., 

Alexandria, Virginia, for Appellant. Asim Varma, David B. Bergman, Ian S. Hoffman, 

ARNOLD & PORTER LLP, Washington, D.C., for Appellee Federal Housing Finance 

Agency. Graciela M. Rodriguez, Merritt E. McAlister, Taylor T. Lankford, KING & 

SPALDING LLP, Washington, D.C., for Appellee Federal Home Loan Mortgage 

Corporation. Geoffrey T. Hervey, BREGMAN, BERBERT, SCHWARTZ & GILDAY, 

LLC, Bethesda, Maryland, for Amicus Curiae.
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DUNCAN, Circuit Judge:

The genesis of this appeal is an unconsummated business deal between Meridian 

Investments, Inc. (“Meridian”) and Federal Home Loan Mortgage Corporation (“Freddie 

Mac”). The district court dismissed Meridian’s breach-of-contract suit against Freddie 

Mac and the Federal Housing Finance Agency (“FHFA”) (collectively, “Defendants”). 

For the reasons that follow, we affirm.

I.

A.

Congress created Freddie Mac in 1970 to facilitate access to mortgage credit and 

foster competition in the secondary market for residential mortgages. Freddie Mac has 

always existed as a private, federally chartered corporation. Freddie Mac, and its sistercorporation, Federal National Housing Association (“Fannie Mae”), purchase and 

securitize residential mortgages, freeing up capital for private lenders to make more 

loans. Since 1989, Freddie Mac has operated as a publicly traded company. 

By 2008, Freddie Mac and Fannie Mae together held or guaranteed over $5 trillion 

of home mortgage debt, but the American housing market crash and resulting financial 

crisis threatened to bankrupt both entities. To save Freddie Mac from collapse, Congress 

passed the Housing and Recovery Act of 2008 (“the Act”), Pub. L. No. 110-289, 122 
4

Stat. 2654 (codified as amended in scattered sections of 12 U.S.C.).1

 The Act established 

FHFA, an independent government agency charged with supervising Freddie Mac. 12 

U.S.C. § 4511. The Act also gave FHFA and its Director broad powers to address 

Freddie Mac’s financial situation, including the ability to appoint FHFA as conservator or 

receiver “for the purpose of reorganizing, rehabilitating, or winding up” Freddie Mac’s 

affairs. Id. § 4617(a)(1)–(2).

On September 6, 2008, FHFA’s Director exercised that authority and placed

Freddie Mac into conservatorship. Thereafter, as conservator, FHFA “immediately 

succeed[ed] to all rights, titles, powers, and privileges” of Freddie Mac. 

Id. § 4617(b)(2)(A). As conservator, FHFA also could “take over the assets of and 

operate” as well as “conduct all business of” Freddie Mac. Id. § 4617(b)(2)(B). Pursuant 

to this authority, on September 7, 2008, FHFA entered into a Senior Preferred Stock 

Purchase Agreement (“PSPA”) with the United States Treasury. Under the PSPA, 

Treasury provided Freddie Mac with a multi-billion dollar line of credit, which Freddie 

Mac needed to remain solvent. In return, Freddie Mac gave Treasury $1 billion of senior 

preferred stock and agreed to certain restrictive covenants. As relevant to this appeal, the 

PSPA prohibited Freddie Mac from selling, conveying, or transferring any assets without 

Treasury’s prior consent. 

 1 The relevant Act provisions relate to both Freddie Mac and Fannie Mae. 

Because this appeal only concerns Freddie Mac, we limit our discussion to that entity.
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B.

In October 2008, Meridian approached FHFA about a possible financial 

transaction involving Freddie Mac’s Low Income Housing Tax Credits (“LIHTC”). 

LIHTCs provide investors in affordable housing tax credits to apply against profits on 

their federal tax returns. As Freddie Mac was unlikely to be profitable in the near future, 

however, it would not be able to use its LIHTCs. Therefore, Meridian proposed a deal 

whereby it would purchase Freddie Mac’s $3 billion LIHTC portfolio for $3.4 billion. 

As is customary with large, complex financial transactions, the parties first negotiated a 

Memorandum of Understanding (“MOU”). The MOU broadly outlined the basics of the 

transaction, titled Project America. Three MOU provisions are relevant to this appeal.

Paragraph 3(a) states that “[u]pon execution of this MOU, Freddie Mac shall 

promptly consult with, and to the extent required, exercise commercially reasonable 

efforts to obtain applicable consent from, FHFA to proceed with the transactions 

contemplated by this MOU. . . . The Parties agree to take all commercially reasonable 

efforts to execute definitive documents . . . as soon as possible hereafter.” J.A. 38. In 

Paragraph 7, “[t]he Parties acknowledge and understand that future actions are required 

in order to implement and comply with the terms of this MOU.” J.A. 40. Finally, 

Paragraph 12, titled “NON-BINDING” states:

Notwithstanding the terms of this MOU, or any other past, present or future 

written or oral indications of assent or indications of results of negotiation 

or agreement to some or all matters then under negotiation, it is agreed that 

no Party hereto (and no person or entity related to any such Party) will be 

under any legal obligation with respect to the proposed transaction or any 

similar transaction, unless and until formal written definitive agreements 

have been executed and delivered by all Parties intending to be 
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bound; provided, however, that the obligations set forth in paragraph 1(j) 

and paragraphs 4, 6, 7, 8, 9, 10, 11 and 12 (the “Binding Provisions”) 

hereof will be binding on the Parties upon execution and delivery of this 

MOU in accordance with the terms hereof.

J.A. 41.

Meridian and Freddie Mac signed the MOU on June 1, 2009. Over the next five

months, both parties worked diligently toward executing a final formal agreement. As 

required under securities laws, Meridian prepared a Private Placement Memorandum for 

prospective investors, which detailed Project America’s terms, tax considerations, and 

risk factors. As part of the general risks, the Private Placement Memorandum

acknowledged Freddie Mac’s PSPA with Treasury and noted that “[u]ntil Freddie Mac 

pays or redeems the senior preferred stock in full, certain actions require the prior written 

consent of the Treasury, including, but not limited to the ability to sell, transfer or 

otherwise dispose of any assets, including its interest” in the LIHTC portfolio. J.A. 211. 

Meridian also warned prospective investors that “[t]o the extent the Treasury does not 

approve the sale of the [LIHTC Portfolio] or delays such approval, the Closing will not 

occur and the Tax Credits expected to be realized may be adversely affected.” J.A. 211–

12.

Ultimately, Treasury did not approve Project America. On November 23, 2009, 

FHFA’s Acting Director informed Freddie Mac that, after discussing Project America 

with Treasury, Treasury would not consent to the project. As such, the deal could not 

move forward. On February 18, 2010, FHFA informed Freddie Mac that it could not sell 
7

or transfer its LIHTC portfolio by any means. Accordingly, Freddie Mac wrote down the 

carrying value of its LIHTC portfolio to zero as of December 31, 2009.

C.

Nearly six years later, Meridian filed a complaint against Freddie Mac and FHFA, 

alleging that Defendants (1) breached the MOU by not completing Project America; (2) 

failed to satisfy certain MOU obligations; and (3) breached the implied covenants of 

good faith and fair dealing. Defendants moved to dismiss, which the district court 

granted on three different bases. First, the district court found that Virginia’s five-year 

statute of limitations for contract actions, Virginia Code Section 8.01-246(2), barred 

Meridian’s claim. Second, the district court concluded that, even if the action were not 

time-barred, Meridian’s complaint failed to state a cause of action because the MOU is, 

under Virginia law, only an unenforceable “agreement to agree.” J.A. 251. Third, the 

district court alternatively determined that, even if the MOU were enforceable, it 

contained two conditions precedent: (1) an executed formal written agreement and (2) 

FHFA approval. Because neither of these conditions occurred, Defendants were not 

bound to complete the transaction. Meridian timely appealed only Count II of its 

complaint, alleging that Defendants breached various provisions of the MOU.

II.

A.

Before reaching the merits, we must first address the threshold issue of whether, as 

the district court determined, the action is time-barred under the five-year Virginia statute 
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of limitations. Meridian urges us to instead apply the six-year statute of limitations in 

28 U.S.C. § 2401(a) for contract suits brought “against the United States.” Meridian also 

contends that the statute of limitations is an affirmative defense that cannot be raised in 

the context of a motion to dismiss. We disagree as to both, but address the latter 

argument first.

A defendant’s claim that an action is time-barred is an affirmative defense that it

can raise in a motion to dismiss when the “face of the complaint includes all necessary 

facts for the defense to prevail.” Leichling v. Honeywell Int’l, Inc., 842 F.3d 848, 850–51 

(4th Cir. 2016) (citation omitted). Meridian’s argument against applying Virginia law--

that Defendants are the “United States”--is a legal, not a factual question. All facts 

necessary to decide whether Defendants’ statute-of-limitations defense applies, including 

when the cause of action first accrued, appear on the face of the complaint. We may 

therefore reach the affirmative defense in reviewing the district court’s dismissal of the 

action. 

B.

Whether the five-year state statute or the six-year federal statute applies turns on 

whether this is a suit between private parties or a private party and the United States. As 

discussed below, we conclude that it is an action between two private corporations. 

Section 2401(a) requires parties to bring civil actions other than tort claims

“against the United States . . . within six years after the right of action first accrues.” 

28 U.S.C. § 2401(a). Section 2401 is part of the Tucker Act, ch. 359, 24 Stat. 505 

(codified as amended in scattered sections of 28 U.S.C.), which Congress enacted to 
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allow private claims against the government, including contract claims. See 

28 U.S.C. § 1491(a)(1).

2

 The Tucker Act consists of the “Big” Tucker Act, 

28 U.S.C. § 1491, which vests exclusive jurisdiction in the Court of Federal Claims for 

actions against the United States in excess of $10,000, and the “Little” Tucker Act, 

28 U.S.C. § 1346(a)(2), which grants concurrent jurisdiction to federal district courts for 

claims less than $10,000 brought against the United States. Section 2401(a) serves as the 

internal time limitation for the Little Tucker Act only. See Herr v. U.S. Forest Serv., 803 

F.3d 809, 816 (6th Cir. 2015). Thus, a claim is only subject to § 2401(a)’s statute of 

limitations if it is “against the United States” as that term is construed in the Little Tucker 

Act. “United States” under the Little Tucker Act includes federal agencies and 

instrumentalities acting pursuant to statutory authority to accomplish a governmental 

objective. Corr v. Metro. Wash. Airports Auth., 702 F.3d 1334, 1336–37 (Fed. Cir. 

2012). Congress created Freddie Mac as a private corporation. The only question here, 

therefore, is whether Defendants’ actions have transformed Freddie Mac into a 

government instrumentality. We hold that they have not.

 2 Prior to the Tucker Act, private parties had to present their grievances against the 

United States to Congress for relief on a case-by-case basis. See United States v. 

Mitchell, 463 U.S. 206, 212 (1983). The inadequacy and inefficiency of this process led 

Congress to establish the Court of Claims in 1855, and, in 1863, to provide authority for 

the Court of Claims to render final judgments. Id. at 213. In 1887, Congress passed the 

Tucker Act, which, inter alia, enlarged the jurisdiction of the Court of Claims and 

provided a six-year statute of limitations. H.R. Rep. No. 49-1077, at 4 (1886). Congress

renamed the court the Court of Federal Claims in 1992. See Federal Courts 

Administration Act of 1992, Pub. L. No. 102-572, § 902(a) (2), 106 Stat. 4506.
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C.

Although “there is no simple test for ascertaining whether an institution is so 

closely related to governmental activity as to become a[n] . . . instrumentality,” the 

Supreme Court has provided guidance. Dep’t of Emp’t v. United States, 385 U.S. 355, 

358–59 (1966). In Lebron v. National Rail Road Passengers Corp., 513 U.S. 374 (1995),

the Supreme Court considered whether Amtrak, a federally chartered corporation, was 

nonetheless subject to the governmental constraints of the First Amendment. In holding 

that it was, the Court analyzed the extent to which (1) Amtrak served a government 

purpose and (2) the government controlled Amtrak. Id. at 397. Because Amtrak was 

“created by a special statute, explicitly for the furtherance of federal governmental 

goals,” it was clear that Amtrak served a government purpose. Id. As to control, the 

Court noted that government appointees controlled Amtrak’s board of directors and that 

Amtrak was “not merely in the temporary control of the Government (as a private 

corporation whose stock comes into federal ownership might be).” Id. at 398. As such, 

the Court distinguished Amtrak, which the government “specifically created . . . for the 

furtherance of governmental objectives, and not merely holds some shares but controls 

the operation of the corporation through its appointees,” from a situation where the 

government only acts as a shareholder. Id. at 399. In the former, the government exerts

control “not as a creditor but as a policymaker.” Id.; see also Dep’t of Transp. v. Ass’n of 

Am. R.R., 135 S. Ct. 1225, 1231–33 (2015) (holding that Amtrak is a governmental entity 

for separation of powers purposes because of pervasive government control). Albeit
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dicta, we find the Court’s language instructive here. Applying the reasoning of Lebron to 

both Defendants, we conclude that neither is a federal instrumentality.

First, though Freddie Mac undeniably has a public purpose, the government does 

not exert control over Freddie Mac such that it loses its private-party status. Unlike 

Amtrak in Lebron, the voting common shareholders elect Freddie Mac’s 13 board 

members annually. 12 U.S.C. § 1452(a). Moreover, although the government does exert 

some control over Freddie Mac through the PSPA with Treasury, that control is 

temporary, “as a private corporation whose stock comes into federal ownership might 

be.” Lebron, 513 U.S. at 398. The Supreme Court has long held that, when the 

government acquires an ownership interest in a corporation, it acts--and is treated--as any 

other shareholder. See, e.g., Bank of U.S. v. Planters’ Bank of Ga., 22 U.S. 904, 907 

(1824). Under Lebron, a private corporation morphs into a federal instrumentality when 

it is “Government-created and controlled.” Lebron, 513 U.S. at 394 (emphasis added). 

The fact that Freddie Mac is not government controlled informs our decision that it is not 

a federal instrumentality. See also Am. Bankers Mortg. Corp. v. Fed. Home Loan Mortg. 

Corp., 75 F.3d 1401, 1406–1409 (9th Cir. 1996) (holding that Freddie Mac is not a 

government agency subject to the Due Process Clause).

Second, though FHFA is a federal agency, as conservator it steps into Freddie 

Mac’s shoes, shedding its government character and also becoming a private party. See 

Montgomery Cty. v. Fed. Nat’l Mortg. Ass’n, 740 F.3d 914, 919 n.* (4th Cir. 2014); cf. 

Atherton v. FDIC, 519 U.S. 213, 225 (1997) (declining to find a federal interest in a case 

involving the FDIC “acting only as receiver of a failed institution” rather than “pursuing 
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the interest of the Federal Government as a bank insurer”). Here, Meridian principally 

argues that Treasury was acting as a policymaker rather than a creditor. Treasury, 

however, is not a named defendant in this action. The only actions relevant to this appeal 

are those of Freddie Mac and FHFA. It is evident from the face of the complaint that

Defendants are not the United States for the purposes of 28 U.S.C. § 2401(a). Therefore, 

we hold that Virginia’s five-year statute of limitations, not § 2401(a), applies. Because

the parties acknowledge that more than five years passed between when the alleged 

injury accrued and Meridian’s complaint, we agree with the district court that the instant 

claim is time-barred.3

III.

A.

Alternatively, even if the instant claim were not time-barred, it would still fail. 

We review a district court’s dismissal for failure to state a claim de novo. Leichling, 842 

F.3d at 850. Such review assumes all factual allegations in the complaint are true, and 

we draw all reasonable inferences in Meridian’s favor as the nonmovant. 

 3 We also note that a contrary result would not assist Meridian. If § 2401(a) did

apply, the Court of Federal Claims and the Federal Circuit would have exclusive 

jurisdiction. See Portsmouth Redevelop. & Hous. Auth. v. Pierce, 706 F.2d 471, 473 (4th 

Cir. 1983). We reject Meridian’s contention that we can use the Little Tucker Act for

statute-of-limitation purposes without using it for subject-matter jurisdiction; the Federal 

Circuit has exclusive jurisdiction over any appeal where lower-court jurisdiction “was 

based, in whole or in part” on the Tucker Act. 28 U.S.C. § 1295(a)(2).
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B.

In alleging a breach of contract, Meridian faces an uphill battle where the 

operative document here is a memorandum of understanding. Letters of intent and 

memoranda of understanding are generally unenforceable “agreement[s] to agree” under 

Virginia law. W.J. Schaefer Assocs., Inc. v. Cordant, Inc., 493 S.E.2d 512, 515 (Va. 

1997). This is particularly true when, as here, both parties agree in the document to 

negotiate in good faith toward a final contract. Beazer Homes Corp. v. VMIF/Anden 

Southbridge Venture, 235 F. Supp. 2d 485, 493 (E.D. Va. 2002). However, parties can 

include binding provisions in a MOU so long as there is “mutual assent of the contracting 

parties to terms reasonably certain under the circumstances to have an enforceable 

contract.” Allen v. Aetna Cas. & Sur. Co., 281 S.E.2d 818, 820 (Va. 1981). An 

agreement to negotiate in good faith is not sufficiently concrete to give rise to an 

obligation, but a provision that has more definite obligations, such as a confidentiality or 

nonsolicitation provision, can be binding even in a MOU. See Marketplace Holdings, 

Inc. v. Camellia Food Stores, Inc., 64 Va. Cir. 144, 147 (Va. Cir. Ct. 2004). 

In Paragraph 12 of the MOU, the parties anticipated that the memorandum would 

be nonbinding, except for the specifically enumerated “obligations set forth in paragraph 

1(j) and paragraphs 4, 6, 7, 8, 9, 10, 11, and 12 (the Binding Provisions).” J.A. 41. 

Meridian argues that Defendants breached the MOU by either not formally seeking 

Treasury’s approval or by not trying with sufficient diligence to persuade Treasury to 
14

approve Project America.4

 The former is not supported by the record and Defendants 

were not bound to the latter. 

First, FHFA’s denial letter to Freddie Mac saying that it had “discussed the Project 

America transaction with Treasury” but that Treasury refused to consent undercuts

Meridian’s argument that Defendants did not seek Treasury’s approval. J.A. 58. 

Because Meridian attached the denial letter and relied on it in the complaint, the district 

court properly considered it in granting Defendants’ Rule 12(b)(6) motion. See Anand v. 

Ocwen Loan Serv., LLC, 754 F.3d 195, 198 (4th Cir. 2014). Meridian’s conclusory 

allegations to the contrary, without more, cannot defeat the motion to dismiss. Coleman 

v. Md. Ct. of App., 626 F.3d 187, 191 (4th Cir. 2010). 

Second, Defendants had no obligation to persuade Treasury to consent to Project 

America. Meridian bases this claim on Paragraphs 3 and 7 of the MOU, arguing that, 

because FHFA’s consent depended on Treasury’s consent, FHFA was required to 

convince Treasury to sign off on Project America. Though Paragraph 3 required Freddie 

Mac to “exercise commercially reasonable efforts to obtain applicable consent from[]

FHFA to proceed with Project America,” J.A. 38, the parties did not include that 

paragraph as part of the Binding Provisions. Meridian argues that Paragraph 3 is binding 

on the parties through Paragraph 7, which required the parties to “cooperate and take 

 4 Meridian also alleges that Project America did not depend on Treasury’s 

approval. However, we find this argument implausible given Meridian’s Private 

Placement Memorandum to prospective investors, which acknowledged that Freddie Mac 

required “the prior written consent of the Treasury” in order “to sell, transfer or otherwise 

dispose of any assets, including its interest” in the LIHTC portfolio. J.A. 211.
15

such reasonable actions . . . as may be necessary or appropriate to structure and 

complete” Project America. J.A. 40. However, because the Binding Provisions 

specifically did not include Paragraph 3, Meridian’s circuitous attempt to make it 

obligatory fails. We read unambiguous provisions in a contract according to their plain 

meaning, and here the parties’ identification of certain provisions as binding necessarily 

implies the parties’ intent not to be bound by the remaining provisions. See Bentley 

Funding Grp., LLC v. SK & R Grp., LLC, 609 S.E.2d 49, 56 (Va. 2005). Some of the 

MOU’s provisions may have been binding on the parties, but Meridian has not 

demonstrated that Defendants breached any of them.

IV.

For the foregoing reasons, the judgment of the district court is 

AFFIRMED.