In the
United States Court of Appeals
For the Seventh Circuit
____________________
Nos. 13‐1558, ‐1559, ‐1611, ‐2739
DEKALB COUNTY, et al.,
Plaintiffs‐Appellants,
v.
FEDERAL HOUSING FINANCE AGENCY, et al.,
Defendants‐Appellees,
and
UNITED STATES OF AMERICA,
Intervening‐Appellee.
____________________
Appeals from the United States District Court for the
Northern District of Illinois, Western Division.
Nos. 12 C 50227, 50230 — Frederick J. Kapala, Judge.
Appeal from the United States District Court for the
Eastern District of Wisconsin.
No. 2:12‐cv‐00732‐CNC — Charles N. Clevert, Jr., Judge.
____________________
ARGUED DECEMBER 12, 2013 — DECIDED DECEMBER 23, 2013
____________________
Before BAUER, CUDAHY, and POSNER, Circuit Judges.
2 Nos. 13‐1558, ‐1559, ‐1611, ‐2739
POSNER, Circuit Judge. These consolidated appeals, by Il‐
linois counties, the state of Illinois, and a Wisconsin county,
present a common question, to which the answer given by
the district courts was “no.” It is whether a state and its local
subdivisions (counties, in this case) can levy a tax on sales of
real property by Fannie Mae (official name: Federal National
Mortgage Association) and Freddie Mac (Federal Home
Loan Mortgage Corporation), a similar entity that, to sim‐
plify our opinion, we’ll largely ignore. (So except where oth‐
erwise indicated, whenever we say Fannie this should be
understood to mean Fannie plus Freddie.) The plaintiffs’
grounds are both statutory and constitutional, and it is be‐
cause there is a constitutional challenge to a federal statute
(actually two statutes—Fannie’s and Freddie’s) that the
United States has intervened as an additional appellee. See
28 U.S.C. § 2403(a); Fed. R. Civ. P. 24(a)(1).
Fannie Mae was created by Congress in 1938 to bolster
the housing market by providing federal money to finance
home mortgages. It was tasked by Congress with buying
mortgages from banks that had made mortgage loans, thus
pumping money into the banking industry that could be
used to make more such loans. At the outset Fannie Mae was
a federal agency, federally financed. Its charter, which de‐
fined its function (just described), provided that it was ex‐
empt from state or local taxation, except real property taxa‐
tion. See National Housing Act Amendments of 1938, Pub.
L. No. 75‐424, 52 Stat. 8, 24. In 1968 Congress converted Fan‐
nie to a private corporation, but its charter, and therefore its
function (to support the home‐mortgage market, toward the
end of creating a “nation of homeowners,” in President Roo‐
sevelt’s words), were unchanged. See Housing and Urban
Development Act of 1968, Pub. L. No. 90‐448, 82 Stat. 476,
Nos. 13‐1558, ‐1559, ‐1611, ‐2739 3
536 (codified, as amended, at 12 U.S.C. §§ 1716 et seq). No
longer a government‐owned corporation, it was now what is
called a “Government‐Sponsored Enterprise.” But like Fan‐
nie’s original statute (with a few changes irrelevant to the
present case), the new statute made “the corporation [i.e.,
Fannie], including its franchise, capital, reserves, surplus,
mortgages or other security holdings, and income … exempt
from all taxation now or hereafter imposed by any State …
or local taxing authority, except that any real property of the
corporation shall be subject to State … or local taxation to the
same extent as other real property is taxed.” 12 U.S.C.
§ 1723a(c)(2).
Freddie Mac was created two years later, as a private
corporation with the same tax exemption as Fannie. See 12
U.S.C. § 1452(e). For purposes of the appeals, the two com‐
panies are virtually identical. That is why, as we said at the
outset, we can largely ignore Freddie, instead pretending
that Fannie and Freddie are not merely Tweedledum and
Tweedledee, but Tweedledumdee. (For a brief biography of
Fannie, Freddie, and their relatives—like Ginnie Mae—see
Office of the Inspector General, Federal Housing Finance
Agency, “History of the Government Sponsored Enter‐
prises,” http://fhfaoig.gov/LearnMore/History, visited Dec.
19, 2013.)
Fannie traditionally followed conservative mortgage fi‐
nancing practices, and foreclosures by it were very few. But
beginning in 1995 and accelerating throughout the early
2000s, it bought risky mortgages and got caught up in the
housing bubble; and when the bubble burst in September
2008, Fannie found itself owning an immense inventory of
defaulted and overvalued subprime mortgages. In fact it
4 Nos. 13‐1558, ‐1559, ‐1611, ‐2739
went broke, and since 2008 has been in conservatorship. The
conservator is its regulatory agency, the Federal Housing
Finance Agency—hence the agency’s presence in these ap‐
peals as a party. See Office of the Inspector General, Federal
Housing Finance Agency, “Conservatorship FAQs,”
http://fhfaoig.gov/LearnMore/FAQ (visited Dec. 19, 2013). A
conservatorship is like a receivership, except that a conserva‐
tor, like a trustee in a reorganization under Chapter 11 of the
Bankruptcy Code, tries to return the bankrupt party to sol‐
vency, rather than liquidating it. (Fannie and Freddie proba‐
bly are not subject to the Bankruptcy Code and thus not eli‐
gible for Chapter 11 reorganization. For a thoughtful discus‐
sion, see Richard Scott Carnell, “Handling the Failure of a
Government‐Sponsored Enterprise,” 80 Wash. L. Rev. 565,
609–12 (2005).
The hit that Fannie took beginning in 2008 coincided with
the decline in states’ fiscal fortunes caused by the effect on
their tax base of the financial crisis and ensuing economic
depression. So at the same time that Fannie found itself for
the first time making frequent sales of property that it had
foreclosed on (since the owner of the mortgage usually ob‐
tains title to the mortgaged property in the event of a de‐
fault), the states (including their subdivisions, such as coun‐
ties) found themselves in dire need of additional tax reve‐
nues but reluctant to impose or increase taxes that would
drive businesses and people to lower‐tax states.
Illinois and Wisconsin, like all the other states, have a tax,
called a real estate transfer tax, applicable when real prop‐
erty changes hands. Illinois’s tax is 50 cents for every $500 of
the property’s total value. 35 ILCS 200/31‐10. Illinois counties
are allowed to piggyback on the state tax by imposing their
Nos. 13‐1558, ‐1559, ‐1611, ‐2739 5
own real estate transfer tax of 25 cents per $500 of value. 55
ILCS 5/5‐1031(a). Wisconsin counties get to keep 20 percent
of the revenue from the Wisconsin real estate transfer tax,
which is 30 cents per $100 of value. Wis. Stat. §§ 77.22(1),
77.24. Wisconsin imposes the tax explicitly on the seller, as is
normal for sale or other excise taxes. This is customary in Il‐
linois as well, but not explicit in the statute authorizing the
real estate transfer tax and so it is conceivable that Illinois
might try to impose the tax on buyers of property from Fan‐
nie if it can’t impose it on Fannie itself. (The indirect effect,
however, might be to reduce the price that Fannie could get
for property that it sold.)
Illinois and its subdivisions and many other states and
their subdivisions (such as Milwaukee County) decided to
impose the real estate transfer tax on Fannie’s sales of fore‐
closed property to home buyers notwithstanding Fannie’s
statutory exemption from state taxation. There was no dan‐
ger that taxing Fannie would drive people or businesses out
of a state, and the number of foreclosures made it possible
that the imposition of such a tax on Fannie would produce
significant revenue for a state and its counties.
Fannie’s exemption is from “all taxation” except real
property taxation, and a tax on a real estate sale is a tax not
on property but on the transfer of property—a well‐
recognized distinction. See, e.g., United States v. Wells Fargo
Bank, 485 U.S. 351, 355 (1988); Fernandez v. Wiener, 326 U.S.
340, 352 (1945); Erik M. Jensen, “The Apportionment of ‘Di‐
rect Taxes’: Are Consumption Taxes Constitutional?,” 97
Colum. L. Rev. 2334, 2365–66 (1997). The distinction is part of
the historical distinction (found in the Constitution) between
“direct” and “indirect” taxes. The former term now em‐
6 Nos. 13‐1558, ‐1559, ‐1611, ‐2739
braces just capitation taxes (taxes per head, such as a poll
tax—“poll” being a Middle English word for “head”) and
taxes on real and personal property, and the latter term em‐
braces all other taxes, see Hylton v. United States, 3 U.S. 171,
175 (Chase, J.), 176 (Paterson, J.), 183 (Iredell, J.) (1796); Mur‐
phy v. IRS, 493 F.3d 170, 181 (D.C. Cir. 2007); Jensen, supra, at
2393–97, including therefore real estate transfer taxes.
Article I, § 9, cl. 4 of the Constitution requires that direct
taxes be apportioned among the states according to popula‐
tion. Indirect taxes—various forms of excise tax, including
sale or transfer or inheritance taxes—were thought not to re‐
quire apportionment because, as Hamilton argued in The
Federalist No. 21 (Federalist, George W. Carey & James
McClellan eds. 1990, p. 105), the market could be relied on to
prevent excessive excise taxation, as excise taxes add to the
price of goods and services. (The Sixteenth Amendment re‐
moved income taxes from the class of taxes that require ap‐
portionment.) The “direct”‐“indirect” terminology relates to
Hamilton’s point. A sales tax is “indirect” because the tax is
imposed on the seller, and he will try and usually succeed in
passing on a portion, sometimes the entirety, of the tax to his
customers by folding the tax into the price of the good sold.
The result is that the “real” taxpayer is, at least to a large ex‐
tent, not the nominal taxpayer (the seller), but the nominal
taxpayer’s customer. Jensen, supra, at 2393–96.
The appellants argue that the statutory term “all taxa‐
tion” does not include excise taxes. The appellees reply that
“all” means “all” (unless explicitly qualified, as by “all ex‐
cept,” which is what the Fannie Mae statute does with real
property taxation). That isn’t always true, however; often
there are implicit exceptions. If a sign reads “All vehicles
Nos. 13‐1558, ‐1559, ‐1611, ‐2739 7
must be out of the park grounds by 8 p.m.,” this doesn’t nec‐
essarily include police cars and other public safety vehicles.
See H.L.A. Hart, “Positivism and the Separation of Law and
Morals,” 71 Harv. L. Rev. 593, 606–07 (1958). But the taxation
provision in the Fannie Mae statute is not comparable. It
says “all taxation … except” taxes on real property, and hav‐
ing carved an express exception for one type of tax Congress
could be expected to make an express exception for any
other type of tax that it wanted state and local governments
to be permitted to levy on Fannie.
Moreover, had states wanted to be permitted to tax prop‐
erty sales by Fannie, why wouldn’t Congress have included
an express exception from the exemption for such taxation in
the 1968 statute? After all, members of Congress are well at‐
tuned to the financial interests of the states and localities
they represent. See, e.g., The Federalist No. 36 (Hamilton) (pp.
173–74 of Federalist, supra). They may have felt that their con‐
stituents would be disserved by allowing state taxation of
Fannie, because by increasing Fannie’s costs it would reduce
its ability to purchase mortgages, to the detriment of the
state’s home buyers.
Against this the appellants argue that to “all taxation”
exemptions there is a well‐recognized (albeit implicit) excep‐
tion for excise taxes, which, they say, was codified in the Su‐
preme Court’s decision in United States v. Wells Fargo Bank,
supra, but was so well‐established by earlier case law that it
must have been implicit in the statute that converted Fannie
to a private corporation. They are wrong. Wells Fargo con‐
strued a federal statute that provided that certain “project
notes” (obligations, for present purpose equivalent to bonds,
issued by state and local authorities to finance housing pro‐
8 Nos. 13‐1558, ‐1559, ‐1611, ‐2739
jects) “shall be exempt from all taxation now or hereafter
imposed by the United States.” The Court held that the ex‐
emption did not apply to federal estate tax on a bequest of
project notes, because such a tax is an excise tax and the “all
taxation” exemption was intended only for “direct taxation,”
namely (since head taxes are out of favor) a property tax. 485
U.S. at 355–56. The project notes were property, and so could
not be taxed by for example requiring the owner of the notes
to pay a specified amount in tax every year, like a tax on real
estate. But the transfer of the notes, as by bequest or sale, was
not property and so could be taxed.
The appellants latch on to the fact that the exception the
Court recognized for transfer taxes was not express; the
statute said “all taxation” and not “all taxation except trans‐
fer taxes.” But they misread the statute. It said that the pro‐
ject notes themselves were nontaxable—not that their transfer
was nontaxable. The Court was saying that an exemption
from property taxes, such as a tax on project notes, is not an
exemption from transfer taxes as well, because a transfer tax
is not a property tax even when the transfer is of property.
Had the Supreme Court meant to hold that the term “all
taxation” means just property taxation—a very strange read‐
ing, equivalent to interpreting “all soup” to mean “all lobster
bisque”—it would have had to overrule Federal Land Bank of
St. Paul v. Bismarck Lumber Co., 314 U.S. 95 (1941). In that case
the Court had held that a statute which stated that “every
Federal land bank … shall be exempt from Federal, State,
municipal, and local taxation, except taxes upon real estate
held, purchased, or taken,” id. at 96 n. 1, exempted land
banks from sales taxes on property that they bought. Id. at
99–100. Wells Fargo does not even cite Bismarck.
Nos. 13‐1558, ‐1559, ‐1611, ‐2739 9
Fannie’s tax exemption, like that of the federal land
banks in Bismarck, exempts an entity—Fannie—and not just
its property, which was the issue in Wells Fargo. For an excise
tax, such as the real estate transfer tax, is a tax imposed on
the entity, rather than just on the entity’s property. Of course
the entity pays the tax in both cases (though in the case of
the excise tax the entity may as we noted shift the burden of
the tax to its customers), but the cases distinguish between
exempting the entity from all taxes not specifically excepted
from the exemption, and a tax limited to a specific activity or
specific assets of the entity.
The structure of the real‐property exception to Fannie’s
tax exemption is different from the (implicit) exception in
Wells Fargo, because the statute lists what is exempt: “the
corporation, including its franchise, capital, reserves, sur‐
plus, mortgages or other security holdings, and income.” Be‐
cause the list consists largely of different forms of property,
and “capital” might be thought to include Fannie’s real es‐
tate, prudence required making the exception for real prop‐
erty express. There is no suggestion in the Fannie Mae stat‐
ute of an exception for transfers of real property.
But why the exception for real property? The parties do
not tell us (maybe they don’t know). We conjecture that it’s
because state and local government provides a variety of
services to buildings (police and fire protection, for exam‐
ple), financed to a considerable extent by taxes on real prop‐
erty. It would seem odd, and even rather petty, for the fed‐
eral government to say we want those services for our build‐
ings but we don’t want to pay for them. It would be espe‐
cially odd for Fannie to enjoy an exemption from real estate
taxes on houses that it had obtained in foreclosure sales.
10 Nos. 13‐1558, ‐1559, ‐1611, ‐2739
But this is a detail. The important point is that, as is plain
from reading Wells Fargo, and plainer still when it is read in
conjunction with Bismarck, the Fannie Mae statute exempts
Fannie from real estate transfer taxes levied by state or local
government, as has been held by the only other federal court
of appeals to have addressed the issue: County of Oakland v.
Federal Housing Finance Agency, 716 F.3d 935 (6th Cir. 2013).
(Illinois and Wisconsin are not the only states that in recent
years have tried to impose their real estate transfer taxes on
Fannie and Freddie.)
Milwaukee County argues in the alternative that its real
estate transfer tax is a property tax and is therefore excluded
from Fannie Mae’s tax exemption. The Wisconsin statute
imposes “on the grantor of real estate a real estate transfer
fee … [that] shall be collected by the [county] register [of
deeds] at the time the instrument of conveyance [ordinarily
a deed] is submitted for recording.” Wis. Stat. § 77.22(1).
(There is no contention that “fee” bears a different meaning
in the statute from “tax.”) The County states in its opening
brief that “the term ‘real property’ includes deeds recorded
by [Fannie] because deeds are ‘indispensable’ to ownership
of real property.” No. A deed is not real estate, any more
than a car title is a car. And in neither its opening brief nor
its reply brief does the County cite Wells Fargo, and it cites
Bismarck only in a quotation from the district court’s opinion.
The appellants’ fallback position is that if (as we have just
held) the Fannie Mae statute does exempt Fannie from trans‐
fer taxes, the statute is unconstitutional. We confine our dis‐
cussion to the appellants’ non‐frivolous constitutional argu‐
ments.
Nos. 13‐1558, ‐1559, ‐1611, ‐2739 11
The constitutional basis for the statute is the commerce
clause, and it is obvious that the home mortgage market is
nationwide, and indeed worldwide, with home mortgages
being traded in vast quantities across state lines. But the ap‐
pellants argue that statutes authorized by the commerce
clause must be subordinated to state and local tax statutes
because taxation is fundamental to state sovereignty. Wrong.
No provision of the Constitution insulates state taxes from
federal powers granted by the Constitution, which include
of course the power of Congress “to regulate Commerce
with foreign Nations, and among the several States … .” Art.
I, § 8, cl. 3. The argument made by the appellants in this case
was rejected by the Supreme Court in Brown v. Maryland, 25
U.S. (12 Wheat.) 419, 448–49 (1827) (Marshall, C.J.), and in an
unbroken line of decisions since. See, e.g., CSX Transporta‐
tion, Inc. v. Georgia State Board of Equalization, 552 U.S. 9, 20–
22 (2007); Exxon Corp. v. Hunt, 475 U.S. 355, 376 (1986); State
Board of Insurance v. Todd Shipyards Corp., 370 U.S. 451, 456
(1962).
It’s true that the Constitution presupposes the existence
of the states and their quasi‐sovereign status (although the
reference to “We the People” in the preamble makes clear
that the Constitution, unlike the Articles of Confederation
that preceded it, is not a compact of the states), and that for
Congress to outlaw all state taxation, leaving the states at the
complete fiscal mercy of the federal government, would de‐
stroy the vestiges of sovereignty that states possess. But in
contrast to that Doomsday scenario, the appellants cannot
even tell us how much money they hope to collect from im‐
posing transfer taxes on Fannie.
12 Nos. 13‐1558, ‐1559, ‐1611, ‐2739
It’s true that out of respect for state quasi‐sovereignty
(quasi because of course the states are not independent na‐
tions) the Supreme Court has ruled that a federal statute
preempts state taxation “only if that result is ‘the clear and
manifest purpose of Congress.’” Department of Revenue of Or‐
egon v. ACF Industries, Inc., 510 U.S. 332, 345 (1994) (quoting
Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947)). The
word “manifest” in the formula adds emphasis, not mean‐
ing. The scope of the exemption in the Fannie Mae statute
could not be clearer.
The appellants acknowledge as they must that a state or
local government can’t tax a federal agency. E.g., McCulloch
v. Maryland, 17 U.S. (4 Wheat.) 316, 431 (1819) (Marshall, C.J.)
(because “the power to tax involves the power to destroy”);
United States v. New Mexico, 455 U.S. 720, 730 (1982). So it
couldn’t tax Fannie when it was a federally owned corpora‐
tion; but it can now, the appellants argue, because it’s pri‐
vately owned. We doubt that Fannie lacks the protection of
the implied constitutional immunity from state taxation, cre‐
ated by McCulloch. (We’ll come back to this point momentar‐
ily.) But if it does, that would make no difference; for Fannie
is not invoking the implied constitutional immunity created
by McCulloch but rather an express statutory immunity. See
First Agricultural Nat’l Bank of Berkshire County v. State Tax
Comm’n, 392 U.S. 339, 341 (1968). The appellants argue that
the constitutional and statutory exemptions must be identi‐
cal. That is nonsense; it would curtail Congress’s power un‐
der the commerce clause, with no basis in the Constitution.
See Arizona Dep’t of Revenue v. Blaze Construction Co., 526 U.S.
32, 35–36 (1999); Carson v. Roane‐Anderson Co., 342 U.S. 232,
233–34 (1952).
Nos. 13‐1558, ‐1559, ‐1611, ‐2739 13
The reason we doubt that the conversion stripped Fannie
of its implied constitutional tax exemption is that if Fannie
was a “federal instrumentality” before its privatization—as
clearly it was—and was therefore, as the appellants concede,
immune then from taxation by virtue of the McCulloch line of
cases, it is a federal instrumentality now. Congress’s purpose
in creating Fannie in the first place—to expand home‐
mortgage lending in the United States—remains federal pol‐
icy, and therefore remains the policy that private Fannie is
obligated, as its sole mission, to promote. Its charter was un‐
changed when Fannie was privatized, and can’t be altered
by Fannie—only by Congress, for the charter is statutory.
See Housing and Urban Development Act of 1968, Pub. L.
No. 90‐448, 82 Stat. 476, 536–46, (codified, as amended, at 12
U.S.C. §§ 1716 et seq). Fannie could not, without persuading
Congress to revise its charter, decide that it would be a more
profitable company if it filmed financial thrillers, financed
for‐profit no‐kill cat shelters, or built and sold perpetual‐
motion machines, than if it continues to just finance home
buying. Fannie was privatized in the hope (fulfilled for a
time, then shattered by the housing and credit bubbles of the
2000s and the ensuing financial crisis) of making it more effi‐
cient in pursuit of the federal policy that its charter requires
it to pursue. The appellants want to make federal govern‐
ment less flexible by insisting on a rigid distinction between
types of federal instrumentality. Congress could in 1968
have expanded Fannie’s resources in a variety of ways, in‐
cluding taxation; it chose to make it a private company so
that it could raise money in equity markets. The objective
was governmental, and unchanged; only the means of
achieving it was changed.
14 Nos. 13‐1558, ‐1559, ‐1611, ‐2739
Freddie was private from the beginning, but its charter
like that of Fannie makes clear that its sole purpose, like
Fannie’s, is to promote federal home financing policy. Fed‐
eral Home Loan Mortgage Corporation Act, Pub. L. No. 91‐
351, 84 Stat. 450, 451 (1970) (codified, as amended, at 12
U.S.C. §§ 1451 et seq).
There is one loose end to tie up: a question of jurisdiction
over Brian Hamer, the Director of the Illinois Department of
Revenue. What for the sake of simplicity we’ve been treating
as two suits, an Illinois suit and a Wisconsin suit, is actually
three suits: a suit by Illinois counties, a suit by Milwaukee
County, and a suit by Fannie, Freddie, and their conservator,
the Federal Housing Finance Agency. Although Fannie,
Freddie, and the agency were the defendants in the Illinois
county suit and so were free to make their claims as counter‐
claims, they wanted relief against all the county recorders
who had sent Fannie and Freddie demand letters. They also
wanted relief against Hamer because, as we know, the State
of Illinois and not just its counties wants to impose the real
estate transfer tax on Fannie and Freddie. The appellees
want to scotch that prospect by obtaining declaratory relief
against the Illinois taxing authority. (They are suing Hamer
in his official capacity, which means they’re suing the state’s
Department of Revenue—the state’s tax collector.) Of course
even without such a judgment, a suit by the Department
against Fannie and Freddie would be blocked by stare de‐
cisis. But they and their conservator want the even greater
protection that a judgment against the Department would
provide by virtue of the doctrine of res judicata.
Hamer makes wild claims for immunity on grounds of
sovereign immunity, comity, and federalism, which we’ll
Nos. 13‐1558, ‐1559, ‐1611, ‐2739 15
ignore. His principal claim is that he (by which he means the
state) is immune from the suit against him by virtue of the
Tax Injunction Act, 28 U.S.C. § 1341. The Act forbids a fed‐
eral district court to enjoin a state tax levy, provided there is
an adequate state court remedy—as there is. If the state sued
Fannie and Freddie in an Illinois state court to collect the real
estate transfer, they could plead by way of defense their fed‐
eral immunity from such taxation. Alternatively they could
file the same claim they’ve made against Hamer in their pre‐
sent, federal suit in a suit in an Illinois state court. Landfill,
Inc. v. Pollution Control Board, 387 N.E.2d 258, 261 (Ill. 1978).
Fannie does not contest the applicability to it of the Tax
Injunction Act; Freddie does contest it, on the basis of a
statutory provision, having no counterpart in the Fannie
Mae statute, that provides that “notwithstanding … any
other provision of law, … the district courts of the United
States shall have original jurisdiction of all [civil] actions” to
which Freddie is a party. 12 U.S.C. § 1452(f). The district
court concluded on the basis of this provision that the Tax
Injunction Act did not bar Freddie’s suing Hamer in federal
court. The United States argues that this was a mistake. It
may well have been. Cf. Arkansas v. Farm Credit Services of
Central Arkansas, 520 U.S. 821, 830–32 (1997). But we needn’t
decide, given that the Federal Housing Finance Agency is
also a plaintiff in the suit against Hamer. The Tax Injunction
Act “does not constrain the power of federal courts if the
United States sues to protect itself or its instrumentalities
from state taxation.” Id. at 823–24. A suit by a federal agency
to enforce federal interests is a suit by the United States.
NLRB v. Nash‐Finch Co., 404 U.S. 138, 144–47 (1971); Bank of
New England Old Colony, N.A. v. Clark, 986 F.2d 600, 602–03
16 Nos. 13‐1558, ‐1559, ‐1611, ‐2739
(1st Cir. 1993); cf. Arkansas v. Farm Credit Services of Central
Arkansas, supra, 520 U.S. at 831.
The appellants ask us to pierce the veil, as it were, in rec‐
ognition of the fact that if the tax is paid, it will be paid from
assets or income of Fannie or Freddie. But as long as their
conservator is the United States, and the assets and income
in question are those of entities charged with a federal duty
(that of promoting the federal policy of encouraging home
ownership), the conservator’s suit against a state’s tax collec‐
tor is a suit by the United States, and so the Tax Injunction
Act falls away. For consider why a federal agency is the con‐
servator of private companies: it is because those private
companies have a public duty, which the federal govern‐
ment’s housing finance agency seeks to protect by marshal‐
ing the companies’ assets. And so the Federal Housing Fi‐
nance Agency is entitled, as the district court ruled, to the
declaratory relief it seeks against Hamer.
In sum, except for the ruling that Freddie was also enti‐
tled to sue Hamer (an issue we leave open), the judgments
appealed from are
AFFIRMED.