Collins v. Yellen

Case: 17-20364 Document: 00516225209 Page: 1 Date Filed: 03/04/2022
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
March 4, 2022
No. 17-20364 Lyle W. Cayce
Clerk
Patrick J. Collins; Marcus J. Liotta; William M.
Hitchcock,
Plaintiffs—Appellants,
versus
Janet Yellen, Secretary, U.S. Department of Treasury; Department
of the Treasury; Federal Housing Finance Agency;
Sandra L. Thompson, Acting Director of the Federal Housing Finance
Agency,
Defendants—Appellees.
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:16-CV-3113
Before Owen, Chief Judge, and Jones, Smith, Stewart, Dennis,
Elrod, Southwick, Haynes, Graves, Higginson, Costa,
Willett, Ho, Duncan, Engelhardt, Oldham, and Wilson,
Circuit Judges.
Per Curiam, joined by Owen, Chief Judge, and Jones, Smith,
Elrod, Southwick, Higginson, Willett, Ho, Duncan,
Engelhardt, Oldham, and Wilson, Circuit Judges:
Case: 17-20364 Document: 00516225209 Page: 2 Date Filed: 03/04/2022
No. 17-20364
This court’s en banc decision, found at 938 F.3d 553 (5th Cir. 2019),
returns to us on remand from the Supreme Court. See Collins v. Yellen,
141 S. Ct. 1761 (2020). We REMAND for further proceedings consistent
with the Supreme Court’s decision.
In Collins, the Court affirmed our holding that the statutory “for
cause” removal provision applicable to the Director of the Federal Housing
Finance Agency (“FHFA,”) 1, which limited the President’s authority over
this Executive Branch principal officer, unconstitutionally violates the
separation of powers. 141 S. Ct. at 1783-87. In pertinent part, however, the
Court vacated and remanded other portions of our prior decision.
It is unnecessary to recount the Court’s reasoning aside from relevant
conclusions that differed from this court’s disposition. First, the Court
determined that the “Third Amendment” to agreements between the FHFA
and Treasury Department, which affects the Plaintiff-shareholders’ rights,
bore no constitutional infirmity in its inception. Second, the Senate-
confirmed FHFA Directors who implemented the Third Amendment during
the pendency of the parties’ longstanding dispute “were properly
appointed[]” even though the President’s power to remove them remained
constrained. Id. (emphasis in original). Thus, the constitutional removal
defect, the Court held, did not render “any of the actions taken by the FHFA
in relation to the third amendment [] void.” Id.
Importantly, however, the latter conclusion “does not necessarily
mean . . . that the shareholders have no entitlement to retrospective relief.”
Id. at 1788. “[T]he possibility that the unconstitutional restriction on a
President’s power to remove a Director of the FHFA could have [inflicted
compensable harm] cannot be ruled out.” Id. at 1789. The Court went on,
1
12 U.S.C. §§ 4512(a), (b)(2).
2
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No. 17-20364
very briefly, to sketch possible causes and consequences of such harm, along
with the Federal Defendants’ denials of any such harm. Id. The Court
accordingly remanded the action for further proceedings consistent with its
opinion.
After this court heard oral argument on questions surrounding
retrospective relief, it became clear that the prudent course is to remand to
the district court to fulfill the Supreme Court’s remand order. And that is
what we do.
REMANDED for further proceedings consistent with the Supreme
Court’s decision.
3
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No. 17-20364
Haynes, Circuit Judge, joined by Stewart, Dennis, Graves and
Costa, Circuit Judges, dissenting:
I respectfully dissent from the majority opinion’s decision to remand
this case back to the district court to decide all the remaining issues in the
first instance. On the issue of harm, the Supreme Court expressly
acknowledged the federal parties’ argument that the President “retained the
power to supervise the Third Amendment’s adoption . . . because FHFA’s
counterparty to the Amendment was Treasury—an executive department
led by a Secretary subject to removal at will by the President.” Collins v.
Yellen, 141 S. Ct. 1761, 1789 (2021) (quotation and brackets omitted). It then
instructed that “[t]he parties’ arguments should be resolved in the first
instance by the lower courts.” Id. (emphasis added).
Nothing in this language precludes this court from deciding the harm
issue. Indeed, we could easily do so in light of our previous conclusion that
“the President, acting through the Secretary of the Treasury, could have
stopped [the Net Worth Sweep] but did not.” Collins v. Mnuchin, 938 F.3d
553, 594 (5th Cir. 2019) (en banc). As we also noted, President Trump later
selected an acting Director as well as a new Director and never filed anything
in this court opposing the Net Worth Sweep or its effects. Id. He certainly
could have picked different Directors who would carry out a different vision,
if he sought that. 1
Because the Shareholders have not pointed to sufficient facts to cast
doubt on our previous conclusion, we should resolve this case on the above
grounds. In other words, I think we should modify the district court’s
judgment by granting declaratory relief in the Plaintiff’s favor, stating that
1
It is important to remember that claims for relief must have plausibility. See
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
4
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the “for cause” removal provision as to the Director of the FHFA is
unconstitutional. In all other respects, we should affirm. Because the
majority opinion fails to do so, I respectfully dissent.
5