Court Opinion

ID: 9890265
Source: CourtListenerOpinion
Date Created: 2023-10-12 18:00:50.865251+00
Date Added: 2024-06-11T13:05:42.422795
License: Public Domain

Case: 22-20632     Document: 00516928949         Page: 1     Date Filed: 10/12/2023

           United States Court of Appeals
                for the Fifth Circuit                                  United States Court of Appeals
                                                                                Fifth Circuit
                                ____________
                                                                              FILED
                                                                       October 12, 2023
                                 No. 22-20632
                                ____________                             Lyle W. Cayce
                                                                              Clerk
   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
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   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 lim-
   ited purpose of determining whether that unconstitutional removal restric-
   tion 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 dis-
   missing 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 experi-
   enced 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 catas-
   trophe 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 enti-
   ties, 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 pre-
   ferred 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 re-
   ceived 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 Treas-
   ury’s capital commitment. That increased the size of the Treasury’s liqui-
   dation 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 gen-
   erated 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 Administra-
   tion announced two overarching goals for the companies: (1) End the con-
   servatorships 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 nom-
   inated 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 com-
   pany 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, how-
   ever, 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 re-
          moval. Or suppose that the President had made a public state-
          ment expressing displeasure with the actions taken by a direc-
          tor 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 restric-
   tion 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 pre-
   vented 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 conservator-
   ships and government ownership of the companies.
           As a result, plaintiffs reason that the unconstitutional removal restric-
   tion caused harm because the Trump Administration would have had the
   time needed to issue new stock had the President been able to remove Dir-
   ector Watt immediately. Such an issuance necessarily requires elimination
   of the liquidation preferences, which would have increased the value of plain-
   tiffs’ 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 Dir-
   ector 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 Administra-
   tion’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 rea-
   sonable 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 sur-
   pass[ed]” the Supreme Court’s “mandate for retrospective relief.” See Col-
   lins 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’ share-
   holders. 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 dir-
   ectives” 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 FHFA-
   specific 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 con-
   servator, 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 anti-
   injunction 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 dis-
   trict 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 Consti-
   tution 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 con-
   strued 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 constitu-
   tional 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 regu-
   lated banks under the Act. 930 F.2d 1122, 1125–26 (5th Cir. 1991). The rel-
   evant 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 com-
   pensable 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 “countervail-
   ing 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 compen-
   sable 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 unconsti-
   tutional 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 dis-
   pleasure 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 prov-
   ing harm: (1) a substantiated desire by the President to remove the unconsti-
   tutionally 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]ec-
   ondhand 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 con-
   servatorships and return the companies to private control and seeks the elim-
   ination 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 pri-
   vate control. See Twombly, 550 U.S. at 570; CFSA, 51 F.4th at 633. Con-
   sidering 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 conser-
   vatorship, sold the Treasury’s common stock at a huge profit, and fully pri-
   vatized 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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                                         No. 22-20632

   FHFA would implement a new regulatory framework, setting capital guide-
   lines 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. Accord-
   ing to plaintiffs, this last step required the elimination of the liquidation
   preferences because no private investor would purchase shares of the com-
   panies 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 ina-
   bility 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 conserva-
   torships 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 com-
   plaint 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.
   But we allow a plaintiff to plead “allegedly inconsistent factual allegations” in his com-

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                                         No. 22-20632

             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 conservator-
   ship, 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 Admin-
   istration 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 vio-
   lates 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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                                   No. 22-20632

   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 dem-
   onstrated 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 sep-
   aration of powers as applied to the FHFA and that the natural follow-on ques-
   tion 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. Con-
   sidering 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 con-
   trolling 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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                                   No. 22-20632

   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.

                                        21