FannieMayhem

FannieGate In Court Of Appeals: Analysis Of Upcoming Court Decision

Summary

The purpose of this article is to provide an in-depth analysis of the upcoming decision in the Perry Capital et al. lawsuit before the Court of Appeals (D.C. Circuit).

It will analyze multiple aspects of the oral arguments and complaints to provide an opinion of the outcome.

Accompanying excursus articles assist in the decision analysis, as well as provide insight into the strengths of the plaintiffs’ claims and weaknesses of the defense.

After a thorough analysis, I estimate that it is highly probable (71-84%) that the Court of Appeals will overturn Judge Lamberth’s ruling that denied plaintiffs’ claims.

The panel will send the case back to District Court and order an administrative record to be produced along with the case to proceed for damages to plaintiffs.

Introduction

This is a rather lengthy examination of the oral arguments in a GSE investor lawsuit Perry Capital et al. vs. Jacob J. Lew et al. It is a significant case for the Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) shareholders (as well as the rule of law and capital markets), and investors need to pay close attention to the outcome, as explained later. This article will first examine the case from a technical manner. Then, an in-depth look at how the oral arguments proceeded will be done. Next, a brief estimate of how each judge will rule and overall judgment will be given along. Finally, concluding remarks and the relevance of the case to investors will be discussed.

Technical Analysis

Although tedious and somewhat unglamorous, insight can be gained by looking at the oral arguments from a technical perspective. Oral arguments were scheduled for one hour. Each lawyer (Olson, Hume, Cayne (FHFA) and Stern (Treasury)) was scheduled for 15 minutes, followed by a rebuttal of three minutes for plaintiffs. However, the oral arguments lasted 2 hours, 37 minutes and 9 seconds (excluding the seven-minute break between plaintiffs and defense arguments), including a 15:30 rebuttal session by plaintiffs. The order of arguments and associated times before the panel was the following: Ted Olson (43:02), Hamish Hume (28:01), Howard Cayne (41:54) and Mark Stern (27:45). This was followed by rebuttal arguments of Ted Olson (7:25) and Hamish Hume (7:59).

Rest here…

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