U.S. Supreme Court Grants Petition For Certiorari Filed By Helmer Friedman LLP

Helmer Friedman LLP is very pleased to announce that this morning the Supreme Court granted our petition for certiorari in Crystal Monique Lightfoot, et al. v.  Fannie Mae, Cendant Mortgage Corporation, dba PHH Mortgage, et al.  Case No. 10-56068.  According to the Supreme Court, approximately 7,000-8,000 petitions for a writ of certiorari are filed each Term and the Court grants and hears oral argument in merely 80 of those cases – about 1%.  Given the slim chance that any petition for certiorari will be granted, founding Helmer Friedman LLP partners, Gregory D. Helmer and Andrew H. Friedman, exclaimed: “We were thrilled a month ago when the U.S. Solicitor General filed a brief with the Court recommending that our petition be granted. This morning, we are beyond ecstatic.”

At issue in the Lightfoot v. Fannie Mae  case is whether individual homeowners who have been wrongly or fraudulently foreclosed upon by Fannie Mae have the right to sue the mortgage giant in the state courts.

The Federal National Mortgage Association (“FNMA”), commonly known as Fannie Mae, is a government-sponsored enterprise (“GSE”) and, since 1968, a publicly traded company. Its brother organization is the Federal Home Loan Mortgage Corporation (“FHLMC”), better known as Freddie Mac. With the advent of the 2008 housing crisis and Fannie Mae and Freddie Mac on the verge of collapse, the U.S. government was forced to “bail out” the firms in September 2008. Accordingly, the Federal Housing Finance Agency (“FHFA”) placed Fannie Mae and Freddie Mac into conservatorship and fired the firms’ chief executive officers and boards of directors. On Oct 21, 2010 FHFA estimates revealed that the bailout of Freddie Mac and Fannie Mae will likely cost taxpayers $224–360 billion in total, with over $150 billion already provided.

In the Lightfoot v. Fannie Mae  case, two Californians (Crystal Lightfoot and Beverly Hollis-Arrington) involved in a mortgage dispute sued Fannie Mae in California State court. Fannie Mae then removed the case to the United States District Court for the Central District of California. Fannie Mae’s sole basis of removal was under a belief that its congressionally created charter conferred automatic federal jurisdiction. That statute says Fannie Mae has authority “to sue and be sued, and to complain and defend, in any court of competent jurisdiction, State or Federal.” 12 U.S.C. § 1723a(a) (emphasis added). After removal, Ms. Lightfoot and Ms. Hollis-Arrington immediately sought remand from the District Court to California State court arguing Fannie Mae’s charter did not confer automatic federal question jurisdiction. The District Court denied the application to remand. Eventually, Ms. Lightfoot and Ms. Hollis-Arrington appealed the district court’s denial of remand decision to the Ninth Circuit.  Initially, the Ninth Circuit affirmed District Court’s denial of Appellants’ motion to remand on the basis that the District Court had removal jurisdiction over state claims filed to circumvent the res judicata impact of a federal judgment. Notably, however, Fannie Mae did not remove the case on that basis. Thereafter, the Ninth Circuit, sua sponte, withdrew its decision and ordered the parties to submit briefing on the issue of whether the district court had subject matter jurisdiction on the basis of Fannie Mae’s federal charter. Ultimately, the Ninth Circuit held that Fannie Mae’s federal charter conferred original jurisdiction in the federal courts.  A brief chronology of the proceedings before the U.S. Supreme Court follow:

• On February 17, 2015, Helmer Friedman LLP filed a petition for writ of certiorari with the U.S. Supreme Court.  A copy of the petition can be found here.
  
  
• On March 30, 2015, Fannie Mae elects to waive its right to file a response to Helmer Friedman LLP’s petition for writ of certiorari.
  
  
• On April 22, 2015, the Supreme Court orders Fannie Mae to file a response to Helmer Friedman LLP’s petition for writ of certiorari.
  
  
• On May 22, 2015, The American Association of Justice filed an amicus brief in support of Helmer Friedman LLP’s petition for writ of certiorari. A copy of the amicus brief can be found here.
  
  
• On June 22, 2015, Fannie Mae filed an opposition to Helmer Friedman LLP’s petition for writ of certiorari.  A copy of Fannie Mae’s opposition can be found here.
  
  
• On July 8, 2015, Helmer Friedman LLP and co-counsel Orrick Herrington & Sutcliffe LLP file a reply in support of the petition for writ of certiorari.  A copy of the reply can be found here.
  
  
• On October 5, 2015, the U.S. Supreme Court invites the U.S. Solicitor General to file a brief in the case to express the views of the United States.
  
  
• On May 23, 2016, the U.S. Solicitor General files a brief urging the Supreme Court to grant the petition for writ of certiorari.  A copy of the Solicitor’s General’s brief can be found here.
  
  
• On June 7, 2016, Fannie Mae files a supplemental brief addressing the U.S. Solicitor General’s brief urging the Supreme Court to grant the petition for writ of certiorari.  A copy of Fannie Mae’s supplement brief can be found here.
  
  
• June 28, 2016, the Supreme Court grants the petition for certiorari.
  
  
• A copy of our press release regarding the Lightfoot v. Cendant Mortgage Corp. case can be found here – http://www.prnewswire.com/news-releases/helmer-friedman-llp-persuades-us-supreme-court-to-accept-case-against-fannie-mae-300292258.html
  
  
• August 16, 2016, Merits Brief of Petitioners Crystal Monique Lightfoot, et al. filed.
  
  
• August 23, 2016, Brief amicus curiae of United States filed.
  
  
• August 23, 2016, Brief amicus curiae of The American Red Cross in support of neither party filed.
  
  
• August 23, 2016, Brief amicus curiae of The American Association for Justice filed.
  
  
• September 2, 2016, SET FOR ARGUMENT On Tuesday, November 8, 2016.
  
  
• September 19, 2016, Merits brief of Fannie Mae filed
  
  
• October 19, 2016,
  [/fusion_imageframe]ightfoot.pdf” target=”_blank”>Reply Brief of Petitioners Crystal Monique Lightfoot, et al. filed.
  
  
• November 8, 2016, Supreme Court hears oral argument. Helmer Friedman LLP co-counsel, E. Joshua Rosenkranz, and Ann O’Connell, Assistant to the Solicitor General of the United States Department of Justice are terrific in their argument to the Court. A copy of the transcript of the argument can be found here https://www.supremecourt.gov/oral_arguments/argument_transcripts/2016/14-1055_h3dj.pdf. Immediately following oral argument, Gregory D. Helmer and Andrew H. Friedman stand outside the U.S. Supreme Court with their client, Beverly Hollis-Arrington – one of the most courageous people we know. Fannie Mae foreclosed on her home in 2002 but she stood up and took them all the way to the Supreme Court (with a little help from Helmer Friedman LLP).
  
  
• November 9, 2016, Ronald Mann, a former member of the U.S. Solicitor General’s Office, pens article for SCOTUSblog opining that the Justices’ questions during oral argument suggested that they were dubious of the position taken by Fannie Mae — Ronald Mann, Argument analysis: Justices dubious about federal jurisdiction for suits involving Fannie Mae, SCOTUSblog (Nov. 9, 2016, 9:33 AM), http://www.scotusblog.com/2016/11/argument-analysis-justices-dubious-about-federal-jurisdiction-for-suits-involving-fannie-mae/ .