Posted on October 20, 2017
The Cacciapalle Plaintiffs delivered a third petition for a writ of certiorari to the United States Supreme Court Monday, and a copy of the filing is attached to this e-mail message. The Cacciapalle Plaintiffs ask the High Court to answer these two questions:
— When a company is placed into federal conservatorship or receivership, do its shareholders thereby lose all rights to pursue derivative litigation on its behalf, even where the federal conservator or receiver would face a manifest conflict of interest in pursuing the claim itself — such as where it would be a claim by one federal government agency against another for conduct they did together?
— Does 12 U.S.C. sec. 4617(f) foreclose any possibility of declaratory or injunctive relief in a judicial challenge to an agreement between the Federal Housing Finance Agency and the United States Department of the Treasury that transfers the net worth and all future profits of Fannie Mae and Freddie Mac to the federal government and requires both Companies to operate with no capital?
The Cacciapalle Plaintiffs tell the nine justices that the D.C. Circuit answered the first question in the negative and that holding conflicts with teachings from the Ninth and Federal Circuits. Accordingly, the High Court should resolve that split of authority among the circuits. The Cacciapalle Plaintiffs tell the nine justices they should take up the second question because, as Judge Brown observed in her dissent, the D.C. Circuit’s decision has disrupted settled expectations about financial markets in a manner likely to negatively affect the nation’s overall financial health. The High Court should intervene to restore certainty and uniformity.
The Cacciapalle Plaintiffs urge the Court to grant its petition and review the D.C. Circuit’s decision.17-578-0001