12-3207-cv
Federal Housing Fin. Agency v. UBS Americas Inc.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
August Term 2012
(Argued: November 26, 2012 Decided: April 5, 2013)
Docket No. 12-3207-cv
FEDERAL HOUSING FINANCE AGENCY,
AS CONSERVATOR FOR THE FEDERAL NATIONAL
MORTGAGE ASSOCIATION AND
THE FEDERAL HOME LOAN MORTGAGE CORPORATION,
Plaintiff-Appellee,
v.
UBS AMERICAS INC., UBS REAL ESTATE SECURITIES INC.,
UBS SECURITIES, LLC, MORTGAGE ASSET SECURITIZATION
TRANSACTIONS, INC., DAVID MARTIN,
PER DYRVIK, HUGH CORCORAN, AND PETER SLAGOWITZ,
Defendants-Appellants.
Before:
CHIN ANDLOHIER, Circuit Judges,
AND GARDEPHE, District Judge.*
*
The Honorable Paul G. Gardephe, United States District
Judge for the Southern District of New York, sitting by
designation.
Appeal from an interlocutory order of the United
States District Court for the Southern District of New York
(Denise Cote, J.) denying in part defendants-appellants'
motion to dismiss the second amended complaint brought by
plaintiff-appellee Federal Housing Finance Agency as
conservator of the Federal National Mortgage Association and
the Federal Home Loan Mortgage Corporation. The district
court rejected defendants-appellants' arguments that the
action was untimely and that FHFA lacked standing to bring
this suit.
AFFIRMED.
KATHLEEN M. SULLIVAN (Philippe Z. Selendy,
Christine H. Chung, Adam M.
Abensohn, William B. Adams, on the
brief), Quinn Emanuel Urquhart &
Sullivan, LLP, New York, New York,
for Plaintiff-Appellee.
JAY B. KASNER (Scott D. Musoff, Joseph N.
Sacca, Robert A. Fumerton, Alexander
C. Drylewski, on the brief),
Skadden, Arps, Slate, Meagher & Flom
LLP, New York, New York, for
Defendants-Appellants.
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DANIEL TENNY (Mark B. Stern and Thomas M.
Bondy, on the brief), for Stuart F.
Delery, Acting Assistant Attorney
General, Civil Division, U.S.
Department of Justice, Washington,
D.C., and Preet Bharara, United
States Attorney for the Southern
District of New York, New York, New
York, for Amicus Curiae United
States.
Michael J. Dell and Aaron M. Frankel,
Kramer Levin Naftalis & Frankel LLP,
New York, New York, and Ira D.
Hammerman and Kevin Carroll,
Washington, D.C., for Amicus Curiae
Securities Industry and Financial
Markets Association.
Richard W. Painter (Mary-Christine
Sungaila, Snell & Wilmer L.L.P.,
Costa Mesa, California, on the
brief), University of Minnesota Law
School, Minneapolis, Minnesota, for
Amicus Curiae Professor Richard W.
Painter.
Michael O. Ware, Catherine A. Bernard,
and Mark G. Hanchet, Mayer Brown
LLP, New York, New York, and
Washington, D.C.; Matthew Solum,
Robert J. Kopecky, and Devon M.
Largio, Kirkland & Ellis LLP, New
York, New York, and Chicago,
Illinois; David Blatt and John
McNichols, Williams & Connolly LLP,
Washington, D.C.; David H. Braff,
Brian T. Frawley, Jeffrey T. Scott,
Joshua Fritsch, Bruce Clark, Amanda
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F. Davidoff, Richard H. Klapper,
Theodore Edelman, Michael T.
Tomaino, Jr., Tracy Richelle High,
Penny Shane, Sharon L. Nelles, and
Jonathan M. Sedlak, Sullivan &
Cromwell LLP, New York, New York,
and Washington, D.C.; Brad S. Karp,
Bruce Birenboim, and Susanna M.
Buergel, Paul, Weiss, Rifkind,
Wharton & Garrison LLP, New York,
New York; Richard W. Clary and
Michael T. Reynolds, Cravath, Swaine
& Moore LLP, New York, New York;
Thomas C. Rice, David J. Woll, and
Alan Turner, Simpson Thacher &
Bartlett LLP, New York, New York;
Greg A. Danilow and Vernon
Broderick, Weil, Gotshal, & Manges
LLP, New York, New York; and James
P. Rouhandeh, Brian S. Weinstein,
Daniel J. Schwartz, Nicholas N.
George, and Jane M. Morril, Davis
Polk & Wardwell LLP, New York, New
York; for Amici Curiae Related-Case
Financial Institution Defendants.
CHIN, Circuit Judge:
In this case, the Federal Housing Finance Agency
("FHFA"), as conservator of the Federal National Mortgage
Association ("Fannie Mae") and the Federal Home Loan
Mortgage Corporation ("Freddie Mac"), sued UBS Americas
Inc., certain affiliated entities, and several officers
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(collectively, "UBS") for fraud and misrepresentation in
connection with the marketing and sale of mortgage-backed
securities. FHFA has filed some seventeen other similar
actions against other financial institutions involved in the
mortgage-backed securities industry.
In the district court, UBS moved to dismiss on the
grounds, inter alia, that (1) the action was untimely and
(2) FHFA lacked standing to bring suit. The district court
(Cote, J.) denied these prongs of the motion, and certified
its decision for interlocutory appeal. We granted UBS's
petition for leave to bring this interlocutory appeal. We
now affirm.
Statement of the Case
A. Statutory Background
In July 2008, in response to the national housing
and economic crisis, Congress passed the Housing and
Economic Recovery Act of 2008 ("HERA"). See Pub. L. No.
110-289, 122 Stat. 2654 (2008). Congress enacted HERA
because it was concerned about the financial condition of
Fannie Mae, Freddie Mac, and other government-sponsored
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entities ("GSEs"). Hence, Congress created FHFA as an
"independent agency of the Federal Government," 12 U.S.C.
§ 4511(a), and conferred upon FHFA broad power to appoint
itself conservator or receiver of the GSEs, id. § 4617(a),
and to "take such action as may be . . . necessary to put
the [GSEs] in a sound and solvent condition; and . . .
appropriate to carry on the business of the [GSEs] and
preserve and conserve [their] assets and property," id.
§ 4617(b)(2)(D). Congress specifically authorized FHFA, as
conservator or receiver, to "collect all obligations and
money due the [GSEs]." Id. § 4617(b)(2)(B)(ii).
HERA set forth provisions governing the
limitations period for actions brought by FHFA as
conservator or receiver. Section 4617(b)(12) of HERA (the
"extender statute") provides:
(A) In General
Notwithstanding any provision of any
contract, the applicable statute of
limitations with regard to any action
brought by the Agency as conservator or
receiver shall be --
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(i) in the case of any contract claim,
the longer of --
(I) the 6-year period beginning
on the date on which the
claim accrues; or
(II) the period applicable under
State law; and
(ii) in the case of any tort claim, the longer
of --
(I) the 3-year period beginning
on the date on which the
claim accrues; or
(II) the period applicable under State
law.
(B) Determination of the date on which a claim
accrues
For purposes of subparagraph (A), the date
on which the statute of limitations begins
to run on any claim described in such
subparagraph shall be the later of --
(i) the date of the appointment of the
Agency as conservator or receiver;
or
(ii) the date on which the cause of action
accrues.
12 U.S.C. § 4617(b)(12).
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On July 30, 2008, as HERA was signed into law,
Congress appointed James B. Lockhart III Acting Director of
FHFA. Lockhart had previously been nominated by President
Bush and confirmed by the Senate as Director of the Office
of Federal Housing Enterprise Oversight ("OFHEO") of the
U.S. Department of Housing and Urban Development. On August
25, 2009, after Lockhart resigned his position from FHFA,
President Obama designated Edward DeMarco -- who was then
Deputy Director of FHFA -- as its Acting Director, effective
September 1, 2009.
B. The Facts
As relevant to this appeal, the allegations of the
second amended complaint are assumed to be true and may be
summarized as follows:
From September 2005 through August 2007, Fannie
Mae and Freddie Mac purchased $6.4 billion in residential
mortgage-backed securities sponsored or underwritten by UBS.
They did so in reliance on certain false and misleading
statements contained in the offering documents. In
particular, UBS represented to potential investors that the
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mortgage loans serving as collateral for the securitizations
were underwritten in accordance with established guidelines
to ensure that borrowers could meet their payment
obligations, and UBS provided statistical material relating
to the likelihood that underlying mortgage loans would be
repaid. These representations were false. As a consequence
of their reliance on these representations, Fannie Mae and
Freddie Mac sustained massive losses.
Acting Director Lockhart appointed FHFA
conservator of Fannie Mae and Freddie Mac on September 6,
2008.
C. The Proceedings Below
On July 27, 2011, more than three years after the
last of the securities offerings in question but within
three years of FHFA's appointment as conservator, FHFA
commenced this action below. It did so at the direction of
Acting Director DeMarco.
On September 2, 2011, FHFA filed some seventeen
other similar actions against other financial institutions.
Sixteen of these actions were assigned to Judge Cote in the
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Southern District of New York as related to this case, but
one was subsequently transferred to the Central District of
California. The seventeenth case was filed in the District
of Connecticut.
The second amended complaint asserted claims under
§§ 11, 12(a)(2), and 15 of the Securities Act of 1933 (the
"Securities Act"), 15 U.S.C. §§ 77k, 77l(a)(2), and 77o; the
Virginia Securities Act, Va. Code Ann. § 13.1-522(A)(ii);
and the District of Columbia Securities Act, D.C. Code § 31-
5606.05(a)(1)(B), (C). The second amended complaint also
asserted a common law claim for negligent misrepresentation.
Defendants moved to dismiss, contending, inter alia, that
the securities claims were time-barred, FHFA had no standing
to pursue the action because its Director had not been
constitutionally appointed, and the negligent
misrepresentation claim failed to state a claim upon which
relief could be granted.
On May 4, 2012, in a thorough and carefully
considered opinion and order, the district court denied the
motion to dismiss with respect to the statutory claims and
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granted it only with respect to the negligent
misrepresentation claim. See FHFA v. UBS Americas, Inc.,
858 F. Supp. 2d 306 (S.D.N.Y. 2012). By order entered June
19, 2012, the district court certified an interlocutory
appeal from its May 4th opinion and order. On August 14,
2012, we granted UBS's petition for interlocutory appeal.
DISCUSSION
On this appeal from the district court's ruling on
a motion to dismiss, we review the district court's legal
conclusions de novo, accepting the factual allegations of
the second amended complaint as true. See Commack Self-
Serv. Kosher Meats, Inc. v. Hooker, 680 F.3d 194, 203 (2d
Cir. 2012).
Two issues are presented: first, the timeliness
of this action, and, second, FHFA's standing to bring this
suit.
A. Timeliness
The principal question is whether FHFA's claims
under the Securities Act and the Virginia and D.C. Blue Sky
laws are governed by HERA's extender statute, including, in
particular, the provision extending the "statute of
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limitations" for tort claims to the three-year period after
the appointment of FHFA as conservator or receiver. 12
U.S.C. § 4617(b)(12). UBS argues that HERA's extender
statute applies only to "statutes of limitations" and not to
"statutes of repose"; the Securities Act and the Virginia
and D.C. Blue Sky laws are governed by "statutes of repose,"
which are separate and distinct from "statutes of
limitations"; and the applicable "statutes of repose" all
expired prior to the commencement of suit in the district
court.
1. Applicable Law
"Statutes of repose and statutes of limitations
are often confused, though they are distinct." Ma v.
Merrill Lynch, Pierce, Fenner & Smith, Inc., 597 F.3d 84, 88
n.4 (2d Cir. 2010). Statutes of limitations limit the
availability of remedies and, accordingly, may be subject to
equitable considerations, such as tolling, or a discovery
rule. See P. Stolz Family P'ship L.P. v. Daum, 355 F.3d 92,
102 (2d Cir. 2004). In contrast, statutes of repose affect
the underlying right, not just the remedy, and thus they
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"run without interruption once the necessary triggering
event has occurred, even if equitable considerations would
warrant tolling or even if the plaintiff has not yet, or
could not yet have, discovered that she has a cause of
action." Id. at 102-03. In fact, a statute of repose may
bar a claim even before the plaintiff suffers injury,
leaving her without any remedy. See id. at 103; accord
Stuart v. Am. Cyanamid Co., 158 F.3d 622, 627 (2d Cir.
1998).
As UBS correctly notes, we have characterized the
three-year statute of limitations in § 13 of the Securities
Act as a "statute of repose." P. Stolz, 355 F.3d at 96; see
also Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson,
501 U.S. 350, 360 & n.5, 362 (1991) (referring to "3-year
period of repose" in Securities Act and 1934 Exchange
Act).1 UBS also argues, and we assume without deciding the
1
Titled "Limitation of Actions," § 13 of the Securities
Act provides:
No action shall be maintained to enforce any
liability created under section 77k [§ 11] or
77l(a)(2) [§ 12(a)(2)] of this title unless
brought within one year after the discovery
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question, that the limitations provisions of the Virginia
and D.C. Blue Sky laws are also statutes of repose. The
question thus is whether the words "the applicable statute
of limitations" in § 4617(b)(12) of HERA refer only to
"statutes of limitations" and not to "statutes of repose."
In construing a statute, we begin with the plain
language, giving all undefined terms their ordinary meaning.
See Schindler Elevator Corp. v. United States ex rel. Kirk,
131 S. Ct. 1885, 1891 (2011); United States v. Desposito,
704 F.3d 221, 226 (2d Cir. 2013); 23-34 94th St. Grocery
Corp. v. N.Y.C. Bd. of Health, 685 F.3d 174, 182 (2d Cir.
2012). Absent ambiguity, our analysis also ends with the
statutory language. See Schindler Elevator Corp., 131 S.
Ct. at 1893; Devine v. United States, 202 F.3d 547, 551 (2d
of the untrue statement or the omission, or
after such discovery should have been made by
the exercise of reasonable diligence . . . .
In no event shall any such action be brought
to enforce a liability created under section
77k or 77l(a)(1) of this title more than
three years after the security was bona fide
offered to the public, or under section
77l(a)(2) of this title more than three years
after the sale.
15 U.S.C. § 77m (emphasis added).
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Cir. 2000). "[W]e must presume that the statute says what
it means." Devine, 202 F.3d at 551. In interpreting a
statute, however, courts are not to "construe each phrase
literally or in isolation." Pettus v. Morgenthau, 554 F.3d
293, 297 (2d Cir. 2009). We must "attempt to ascertain how
a reasonable reader would understand the statutory text,
considered as a whole." Id. If we conclude that the text
is ambiguous, we will look to legislative history and other
tools of statutory interpretation. See Auburn Hous. Auth.
v. Martinez, 277 F.3d 138, 143-44 (2d Cir. 2002).
2. Application
We hold that § 4617(b)(12) of HERA applies to this
action, and thus we conclude that the district court
correctly denied UBS's motion to dismiss. We discuss in
turn the text of the statute, its legislative history, and
UBS's argument that the reference to "statutes of
limitations" excludes "statutes of repose."
a. The Statutory Text
The words of the statute make clear that HERA
applies to the claims brought by FHFA in this case. Section
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4617(b)(12) sets forth "the applicable statute of
limitations with regard to any action brought by [FHFA] as
conservator or receiver." 12 U.S.C. § 4617(b)(12)(A)
(emphasis added). It provides that the limitations period
"shall be" six years for contract cases, three years for
tort cases, or in either case the respective applicable
period under state law if that period is longer. Id.
§ 4617(b)(12)(A)(i), (ii) (emphasis added). It further
provides that "the date on which the statute of limitations
begins to run" is the later of (i) the date FHFA is
appointed conservator or receiver or (ii) the date the cause
of action accrues. Id. § 4617(b)(12)(B)(i), (ii).
By explicitly stating that "the" statute of
limitations for "any action" brought by FHFA as conservator
"shall be" as specified in § 4617(b)(12), Congress clearly
provided that the extender statute shall apply to an action
such as this one -- an action brought by FHFA, as
conservator, to recover "obligations and money" due Fannie
Mae and Freddie Mac. Id. § 4617(b)(2)(B)(ii). By using
these words, Congress precluded the possibility that some
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other limitations period might apply to claims brought by
FHFA as conservator. Giving the words of § 4617(b)(12)
their plain meaning, and considering the provision as a
whole, we conclude that a reasonable reader could only
understand it to apply to both the federal and state claims
in this case.
b. The Legislative History
To the extent there is any ambiguity in the words
of the extender statute, the legislative history eliminates
any doubt. Congress enacted HERA and created FHFA in
response to the housing and economic crisis, precisely
because it wanted to address the dire financial condition of
Fannie Mae and Freddie Mac. As HERA makes clear, Congress
intended FHFA to take action to "collect all obligations and
money due" to the GSEs, to restore them to a "sound and
solvent condition." 12 U.S.C. § 4617(b)(2)(B)(ii), (D).
Congress obviously realized that it would take
time for this new agency to mobilize and to consider whether
it wished to bring any claims and, if so, where and how to
do so. Congress enacted HERA's extender statute to give
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FHFA the time to investigate and develop potential claims on
behalf of the GSEs -- and thus it provided for a period of
at least three years from the commencement of a
conservatorship to bring suit.2
Of course, the collapse of the mortgage-backed
securities market was a major cause of the GSEs' financial
predicament, and it must have been evident to Congress when
it was enacting HERA that FHFA would have to consider
potential claims under the federal securities and state Blue
2
Congress drew the language of § 4617(b)(12) from
similar provisions in the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 ("FIRREA"), 12 U.S.C.
§ 1821(d)(14), and the Federal Credit Union Act, 12 U.S.C.
§ 1787(b)(14). In construing the limitations provision in
FIRREA, the Fifth Circuit recognized that its purpose was to give
the agency in question, the Resolution Trust Corporation (the
"RTC"), "three years from the date upon which it is appointed
receiver to decide whether to bring any causes of action held by
a failed savings and loan. This three-year period allows the RTC
to investigate and determine what causes of action it should
bring on behalf of a failed institution." FDIC v. Barton, 96
F.3d 128, 133 (5th Cir. 1996). In drawing on FIRREA's language,
Congress intended for § 4617(b)(12) of HERA to serve a similar
purpose with respect to FHFA. See In re Countrywide Fin. Corp.
Mortgage-Backed Sec. Litig., __ F. Supp. 2d __, Nos. 2:11-ML-
02265, 2:12-CV-1059 MRP, 2012 WL 5275327, at *9 (C.D. Cal. Oct.
18, 2012) ("The apparent purpose of the extender statute was to
grant FHFA 'more time to decide whether and how to pursue any
claims it inherited as Fannie Mae's newly-appointed conservator,'
in order to 'put the regulated entit[ies] in a sound and solvent
condition.'" (quoting FHFA v. UBS Americas, Inc., 858 F. Supp. 2d
306, 316 (S.D.N.Y. 2012))).
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Sky laws. It would have made no sense for Congress to have
carved out securities claims from the ambit of the extender
statute, as doing so would have undermined Congress's intent
to restore Fannie Mae and Freddie Mac to financial
stability.
c. Statutes of Limitations
and Statutes of Repose
We turn, then, to UBS's argument that
§ 4617(b)(12)'s use of the phrase "statute of limitations"
means it does not apply to "statutes of repose" such as
those contained in the Securities Act and the Virginia and
D.C. Blue Sky laws. The argument fails.
Although statutes of limitations and statutes of
repose are distinct in theory, the courts -- including the
Supreme Court and this Court -- have long used the term
"statute of limitations" to refer to statutes of repose,
including specifically with respect to § 13 of the
Securities Act.3 Similarly, when Congress extended the
3
See, e.g., Ernst & Ernst v. Hochfelder, 425 U.S. 185,
210 (1976) ("Section 13 specifies a statute of limitations of one
year from the time the violation was or should have been
discovered, in no event to exceed three years from the time of
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limitations periods for securities fraud actions in the
Sarbanes-Oxley Act of 2002, it did so in a section entitled
"Statutes of Limitations for Securities Fraud," Sarbanes-
Oxley Act of 2002, § 804, Pub. L. No. 107-204, 116 Stat.
745, 801 (codified at 28 U.S.C. § 1658(b)), even though
securities claims under § 10(b) of the Securities Exchange
Act of 1934 and Rule 10b-5 were governed by both a one-year
statute of limitations and a three-year statute of repose
similar to those in § 13 of the Securities Act. See Lampf,
Pleva, Lipkind, Prupis & Petigrow, 501 U.S. at 364 & n.9; P.
Stolz, 355 F.3d at 104 (noting that Sarbanes-Oxley
"extend[ed] the effective date of the statute of repose from
three years to five years" (emphasis added)). In other
contexts as well, Congress has enacted statutes that use the
offer or sale . . . ."(emphasis added)); In re WorldCom Sec.
Litig., 496 F.3d 245, 250 (2d Cir. 2007) (referring to "the
Securities Act's one- and three-year statutes of limitations"
(emphasis added)); In re Ames Dep't Stores, Inc. Note Litig., 991
F.2d 968, 979 (2d Cir. 1993) ("The statute of limitations for
claims under §§ 11 and 12(2) of the Securities Act is set forth
in § 13 . . . ." (emphasis added)); Finkel v. Stratton Corp., 962
F.2d 169, 173 (2d Cir. 1992) (referring to "the two tiered § 13
statute of limitations" (emphasis added)); see also Countrywide,
2012 WL 5275327, at *6 (collecting cases); UBS Americas, 858 F.
Supp. 2d at 315 (collecting cases).
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term "statute of limitations" when referring to statutes of
repose.4
In view of the text of the statute and its
legislative history as discussed above, it is clear that
Congress intended one statute of limitations --
§ 4617(b)(12) of HERA -- to apply to all claims brought by
FHFA as conservator. If Congress had really wanted to
exclude securities claims from the ambit of HERA's extender
statute, it surely would have done so clearly and explicitly
instead of by opaquely using the phrase "statute of
limitations" rather than the words "statute of repose." It
would not have elected to use language that "the applicable
statute of limitations with regard to any action brought by
[FHFA] as conservator or receiver shall be" as set forth in
the extender statute. 12 U.S.C. § 4617(b)(12) (emphasis
added). As the district court held below:
4
See Countrywide, 2012 WL 5275327, at *5 ("Congressional
statutes continue to use the term 'statutes of limitations' to
encompass statutes of repose . . . . The United States Code is
littered with statutory provisions entitled 'statute of
limitations,' 'time limits,' 'time limitations' and 'limitations
of actions,' that regulate both when plaintiffs can bring a claim
after discovery of their rights and when plaintiffs are
absolutely barred from bringing a claim." (citations omitted)).
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The more natural reading of the
provision, the one that is both inline
with everyday usage and consistent with
the objectives of the statute overall, is
that by including in HERA a provision
explicitly setting out the "statute[s] of
limitations" applicable to claims by
FHFA, Congress intended to prescribe
comprehensive time limitations for "any
action" that the Agency might bring as
conservator, including claims to which a
statute of repose generally attaches.
UBS Americas, 858 F. Supp. 2d at 316-17.
Accordingly, we hold that § 4617(b)(12) of HERA
applies to this action and supplants any other time
limitations that otherwise might have applied. As FHFA
commenced suit within three years after it was appointed
conservator of Freddie Mac and Fannie Mae, the action was
timely. The district court correctly denied this prong of
UBS's motion to dismiss.
B. Standing
UBS argues that FHFA lacks standing to prosecute
this action because the appointments of Lockhart and DeMarco
as Acting Directors of FHFA were unconstitutional as:
(1) Lockhart was appointed by Congress without being
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nominated by the President and (2) DeMarco was appointed by
the President without Senate confirmation.5 Both arguments
fail.
First, Lockhart had been earlier nominated by the
President and confirmed by the Senate to serve as Director
of OFHEO. As the district court correctly held, "Congress
may confer on validly appointed officers 'additional duties,
germane to the offices already held by them . . . without
thereby rendering it necessary that the incumbent should be
again nominated and appointed.'" UBS Americas, 858 F. Supp.
2d at 322 (quoting Shoemaker v. United States, 147 U.S. 282,
301 (1893)); accord Weiss v. United States, 510 U.S. 163,
171-75 (1994) (holding that second appointment in accordance
with Appointments Clause was not necessary for military
judges, who are "Officers" who must be appointed in
accordance with Appointments Clause of Constitution, where
they were commissioned officers who had already been
5
The Appointments Clause grants the President the power
to "nominate, and by and with the Advice and Consent of the
Senate, . . . appoint . . . Officers of the United States." U.S.
Const. art. II, § 2.
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appointed by the President with advice and consent of the
Senate). Here, the functions assigned to Lockhart by
Congress as Acting Director of FHFA were "germane" to the
functions he had previously served as Director of OFHEO, as
Congress essentially converted OFHEO into FHFA and
transferred OFHEO's functions to FHFA. See 12 U.S.C.
§§ 4511 note, 4512(b)(5); UBS Americas, 858 F. Supp. 2d at
322; see also Lo Duca v. United States, 93 F.3d 1100, 1110
(2d Cir. 1996) ("Where Congress provides additional duties
that are 'germane' to an already existing position, the
Appointments Clause does not require a second
appointment."). Indeed, the OFHEO Director already had the
power to place Fannie Mae and Freddie Mac into
conservatorship. See Federal Housing Enterprises Financial
Safety and Soundness Act of 1992, §§ 1303(6), 1313(b)(4),
1367, 1369, Pub. L. No. 102-550, tit. XIII, 106 Stat. 3941.
Hence, Lockhart's appointment as Acting Director of FHFA did
not run afoul of the Appointments Clause.
Second, after Lockhart resigned, DeMarco was
properly designated by the President as Acting Director of
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FHFA, as HERA provides that "[i]n the event of the death,
resignation, sickness, or absence of the Director, the
President shall designate [one of three enumerated Deputy
Directors] to serve as acting Director until the return of
the Director, or the appointment of a successor . . . ." 12
U.S.C. § 4512(f). Because Lockhart was legally the
Director, the President was authorized to appoint Deputy
Director DeMarco as Acting Director upon Lockhart's
resignation.
Accordingly, FHFA had standing to bring this
action.
CONCLUSION
For the reasons set forth above, the order of the
district court denying UBS's motion to dismiss for
untimeliness and lack of standing is AFFIRMED.
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