[00:00:01] Speaker 03: May it please the court, Jordan Smith on behalf of the plaintiff's appellants. [00:00:04] Speaker 03: I'll try and reserve about three minutes of my time for rebuttal. [00:00:08] Speaker 03: When we are in a government shutdown like we are today, it's easy for the American public to realize the central feature that the appropriations clause plays in the separation of powers. [00:00:19] Speaker 03: But back in 2008, Congress created the FHFA and made it accountable to no one, not even its own power of the purse. [00:00:26] Speaker 03: Congress even went so far as to say the assessments that fund the FHFA shall not be construed as appropriated money. [00:00:32] Speaker 03: But the text, history, and the Supreme Court's recent opinion in CFPB confirm that a valid appropriation requires a cap, a some certain, or other ascertainable limit on how much an agency can raise and spend. [00:00:44] Speaker 02: So, counsel, where in that Supreme Court case is the cap part, a part of the holding? [00:00:51] Speaker 03: of the holding your honor certainly well the bottom line of CFPB is that the court affirmed a funding mechanism with a cap. [00:00:59] Speaker 02: Well they did but they also stated the rule of law which was based on the Constitution's text the history and congressional practice we conclude that appropriations need only identify [00:01:12] Speaker 02: that the case involved a cap and a source of public funds and authorized the expenditure of those funds for designated purposes to satisfy the appropriations clause. [00:01:21] Speaker 02: The court says that several times in the [00:01:29] Speaker 02: to the Supreme Court's opinion on the Supreme Court's opinion on the cap. [00:01:32] Speaker 02: Justice Thomas stated the holding of the court several times, and it doesn't include that there needs to be a cap. [00:01:39] Speaker 02: So how can we read that into the Supreme Court's opinion as a requirement? [00:01:43] Speaker 03: I put your honor to page 437 of the opinion or 436 of the opinion where the court said we conclude that Congress did not violate the appropriations [00:01:58] Speaker 03: 435, the page before, the court said that the CFPB's funding mechanism, its design, fits, quote, comfortably with the first Congress because the cap looks like a lump sum appropriation. [00:02:10] Speaker 03: Also on page 435, the court says that the CFPB's mechanism has the, quote, requisite features of a cap. [00:02:17] Speaker 02: So I don't dispute that those are parts of what the court wrote. [00:02:22] Speaker 02: but in the several places where the court very specifically stated what its exact holding was, the cap part is just not there and I think we would be well out of our lane to interpret the opinion in a way that the court didn't state its holding. [00:02:45] Speaker 03: I'm sorry. [00:02:46] Speaker 03: I'm sorry. [00:02:46] Speaker 03: Go ahead. [00:02:47] Speaker 03: Let me push back a little bit on that, your honor. [00:02:49] Speaker 03: CFPB was written in a circumstance where there was a cap. [00:02:52] Speaker 03: So the question wasn't, do you need a cap? [00:02:54] Speaker 03: It is, you have a cap. [00:02:55] Speaker 03: What else do you need? [00:02:57] Speaker 03: So the court was addressing, what else do you need when there is a cap? [00:02:59] Speaker 03: Yes, the challengers contested, well, the cap is so high, it's illusory. [00:03:03] Speaker 03: But on 436, the court said, that's a mistaken premise. [00:03:06] Speaker 03: The only way in which the director exercises discretion is by how much funding to spend up to a cap. [00:03:14] Speaker 03: answer what else do you need. [00:03:16] Speaker 03: But the court statement of the holding source and purpose, which my friends on the other side count like six times, that wasn't saying you don't need a cap or you never need a cap. [00:03:25] Speaker 03: It was addressing a circumstance where there already was one. [00:03:28] Speaker 03: And throughout the case, Your Honor noted, through the historical analysis, going back to the King's abuses before the Glorious Revolution, [00:03:35] Speaker 03: the practice in the colonies, the practice in the first Congress. [00:03:40] Speaker 03: The cap lumps some appropriations, sums not exceeding appropriations, featured prominently in the case. [00:03:45] Speaker 03: So even if it's not a holding, it's certainly not dicta. [00:03:49] Speaker 03: Those facts were material and directly relevant to the court's ultimate conclusion. [00:03:54] Speaker 01: But what do you make of, Mr. Smith, what do you make of the fact that, you know, Justice Alito in his dissent pointed out that the majority was, it was chiding the majority for not requiring a cap. [00:04:04] Speaker 01: He says at 448, nor does the court's interpretation require Congress to set an upper limit on the amount of money that the executive may take. [00:04:13] Speaker 01: So that issue did come up in the context of how should the majority construe or define its holding, and there's just, as Judge Bennett was pointing out, there's nothing about a cap in the holding itself, and the dissent was critical of it. [00:04:31] Speaker 03: I think the majority answered Justice Alito at 436, where it said it's a mistaken premise that the only way the director exercises discretion is up to a cap. [00:04:40] Speaker 03: So the cap featured prominently throughout recognized it was there. [00:04:43] Speaker 03: So yes, Justice Alito said there is no cap. [00:04:46] Speaker 03: I think that's wrong on the majority. [00:04:48] Speaker 03: And I think the repeated references to the existence of the cap here answers the question for Justice Alito. [00:04:55] Speaker 03: it's important that CFPB be read against the backdrop of text and history. [00:05:00] Speaker 03: So if CFPB didn't have a holding of a cap and it was just addressing source and purpose, then the alternative is the cap is an open question. [00:05:09] Speaker 03: And the court should answer that question looking at text and history. [00:05:12] Speaker 03: And I think Alexander Hamilton said it best. [00:05:15] Speaker 03: And the quote I'm referring to comes from page 46 of my colleague's answering brief, the Second Circuit's decision in the law office of the Crystal Moroney case, [00:05:24] Speaker 03: where Hamilton said that the design of the appropriation clause was to secure a purpose, a limit, and a fund. [00:05:31] Speaker 03: That's what Hamilton said the appropriation was to do. [00:05:34] Speaker 00: Okay. [00:05:35] Speaker 00: Here we have a limit, which is sufficient to provide for reasonable costs. [00:05:40] Speaker 00: So why is that not enough, even assuming that a cap was somehow germane to CFSA, which I don't think it was? [00:05:49] Speaker 03: I think the sufficiency and the reasonableness, whether those suffice to be a limit, that goes to the non-delegation arguments. [00:05:57] Speaker 03: That's a little bit different for the appropriation clause arguments. [00:05:59] Speaker 03: For the appropriation clause, there has to be some type of numeric limit or a cap, some certain formula that bounds how much an agency can raise and spend. [00:06:10] Speaker 03: Sufficiency and reasonableness goes to the non-delegation questions. [00:06:14] Speaker 03: And there, I would just compare and contrast [00:06:16] Speaker 03: this circumstance with sufficiency from the FCC circumstance with sufficiency. [00:06:21] Speaker 03: And I want to be clear on this. [00:06:23] Speaker 03: We're not arguing that sufficiency could never be part of an intelligible principle or that reasonableness could never be part of an intelligible principle. [00:06:31] Speaker 03: It just isn't part of an intelligible principle [00:06:33] Speaker 03: And then you've got to look at what bounds meets and bounds Congress provided by statute in association with sufficiency. [00:06:38] Speaker 03: And there you had section 254 where it said sufficient and had 4 criteria. [00:06:40] Speaker 03: And then you've got to look at what bounds meets and bounds Congress provided by statute in association with sufficiency. [00:06:47] Speaker 03: And then you've got to look at what bounds meets [00:06:52] Speaker 03: and 6 principles. [00:06:53] Speaker 03: And FCC, it said that was enough. [00:06:56] Speaker 03: Here you have sufficient and you have reasonable. [00:06:59] Speaker 03: And in 4516A, you have a non-exhaustive list of activities. [00:07:04] Speaker 03: At page 48 of their answering brief, they recognize those are just examples. [00:07:09] Speaker 03: That's not an exhaustive list of everything the FHA can do. [00:07:12] Speaker 03: The district court, in its order 23 of the record, also acknowledged those are just examples. [00:07:18] Speaker 03: And the conservatorship activities aren't even listed among them. [00:07:22] Speaker 03: And I think it's helpful to put a point on the non-delegation by comparing FCC and FHFA using the district court's golden stapler analogy that he kind of scoffed at. [00:07:32] Speaker 03: If in FCC, the FCC wanted to give every American a gold cell phone, you'd say, okay, well, let's look at those four criteria and six principles. [00:07:41] Speaker 03: Two of those criteria were they have to be in use by a majority of households and they have to be deployed by carriers. [00:07:48] Speaker 03: So let's look. [00:07:49] Speaker 03: Are golden cell phones used by a majority of households? [00:07:52] Speaker 03: No. [00:07:53] Speaker 03: Are they actually being deployed by carriers? [00:07:55] Speaker 03: No. [00:07:56] Speaker 03: So if the FCC wanted to do that, you'd say you've exceeded congressional bounds. [00:08:00] Speaker 03: Look at this statute at 4516. [00:08:02] Speaker 03: Where is the same type of textual limit that would prevent the FHFA from using gold staplers? [00:08:07] Speaker 03: There simply isn't one. [00:08:10] Speaker 03: But going back to the Appropriations Clause issue in text and history, as I was saying, Hamilton recognized a source, a limit, and a fund. [00:08:19] Speaker 03: And that's the exact same way that the state courts interpreted their own analogous state constitutions in the 1800s, that you had to have a source, a limit, and a fund. [00:08:30] Speaker 01: Well, can we, you know, I mean, I think the district court pointed out that in the majority's opinion, it relied on two historical examples, the customs and the post office. [00:08:40] Speaker 01: And those don't provide any kind of a limit and it's an appropriation scheme that relies on drawing funds from its own sources. [00:08:48] Speaker 01: So why isn't that a historical example that would be applicable here? [00:08:52] Speaker 03: because in the post office and the customs, it was Congress who set the price of stamps back then. [00:08:57] Speaker 03: It was Congress who set a detailed schedule of duties and tonnage. [00:09:02] Speaker 03: So by setting how much those agencies could bring in, it was capping what it could spend on. [00:09:07] Speaker 01: Here, the assessment says- Well, it's not setting the limit on what could come in. [00:09:12] Speaker 01: It's just setting a price, and then depending on how many people bought stamps, that would generate the revenue itself. [00:09:19] Speaker 01: So it's not setting a budgetary cap. [00:09:21] Speaker 03: it's it's it's look at the pot. [00:09:24] Speaker 03: So it's setting a limit on the pot. [00:09:26] Speaker 03: You can spend whatever ends up in this pot and you can do it 35 cents at a time for stamps. [00:09:31] Speaker 03: So that's what your pot is here. [00:09:33] Speaker 03: The FCC or the FHFA has no similar pot. [00:09:36] Speaker 03: It's I can charge Fannie and Freddie whatever I want. [00:09:39] Speaker 03: I pick the amount of the assessments. [00:09:41] Speaker 03: I can raise them whenever I want to. [00:09:43] Speaker 03: And I don't even have to limit myself to my annual costs. [00:09:48] Speaker 03: I can raise above my annual expenses, put it in a working capital fund that the director deems necessary, and invest it with Treasury. [00:09:56] Speaker 03: That is unlike any other agency. [00:09:59] Speaker 03: It's even more dangerous than the CFPB. [00:10:01] Speaker 03: And there's really five attributes of it that make it unique. [00:10:06] Speaker 03: One, it's a single director agency. [00:10:09] Speaker 03: The funding is uncapped. [00:10:11] Speaker 03: It's indefinite. [00:10:13] Speaker 03: The director picks the amount of the assessments, and it comes from entities that are under conservatorship. [00:10:20] Speaker 03: These entities can't even push back on the assessments. [00:10:23] Speaker 03: They can't lobby. [00:10:24] Speaker 03: They can't sue. [00:10:25] Speaker 03: The conservatorship prevents these. [00:10:27] Speaker 03: It's really, instead of regulatory capture, it's the reverse. [00:10:31] Speaker 03: These entities can't push back. [00:10:33] Speaker 03: that's a valid appropriation. [00:10:33] Speaker 03: And no state constitution after the framing would have said this is a valid appropriation because it's indefinite in amount. [00:10:41] Speaker 03: We point to the Nebraska Supreme Court case from 1896 because it considered a scenario where there's an appropriation for so much is [00:10:53] Speaker 03: The director can raise sufficiency, can raise reasonableness. [00:10:56] Speaker 03: And the Nebraska Supreme Court back then, 1896 said, it was unaware of a single case under any constitution where that type of indefinite appropriation would have passed muster. [00:11:07] Speaker 03: And those courts, you know, from Nevada, Indiana, Oregon, all over the country reviewed the exact same history that CFPB did and came to the conclusion that an appropriation had to have an ascertainable limit. [00:11:22] Speaker 03: which is why, going back to CFPB at 431 of the decision, the court said the origins of the appropriation clause confirm that an appropriation needed to designate either particular revenues and an identified purpose. [00:11:36] Speaker 03: Well, we ask, okay, what are particular revenues then? [00:11:39] Speaker 03: And that very same paragraph in 431, two sentences later, it says, [00:11:43] Speaker 03: some expenditures required the, required the, sorry, some appropriations required the expenditure of a particular amount, so particular revenue, particular amount, and some required a cap. [00:11:55] Speaker 03: So CFPB, when using the phrases particular revenue or specified revenue, is always saying in reference of a cap or some type of ceiling. [00:12:04] Speaker 03: even Justice Kagan and her concurrence, she relied on the cap also, where she said at 442 of the opinion and her concurrence, she said that historically the executive was given leeway to spend up to a ceiling. [00:12:18] Speaker 03: So the cap is repeated. [00:12:19] Speaker 01: Justice Kagan's concurrence was, I think, mainly focused on the fact that there's a variety of examples throughout history about different schemes under the appropriations clause. [00:12:31] Speaker 01: So not exceeding in different matters. [00:12:35] Speaker 01: I didn't read it to mean that you had to have a statutory cap as a through line through all these different schemes. [00:12:43] Speaker 03: I agree with you that she was, Justice Kagan was emphasizing there's been variations on the theme over the years, but all the examples she gave had some type of limit. [00:12:50] Speaker 03: I don't read her concurrence as pointing to one example where there wasn't a limit. [00:12:55] Speaker 03: All of her examples say historically at 444 of her concurrence, it says in this tradition, parenz up to a cap, parenz. [00:13:03] Speaker 03: So even Justice Kagan wasn't pointing to an example that I recall where there didn't need to be some type of ceiling or upper limit on how much an executive agency can spend. [00:13:13] Speaker 03: I'll reserve the rest of my time. [00:13:14] Speaker 03: Thank you. [00:13:25] Speaker 04: Thank you, Your Honors. [00:13:26] Speaker 04: Good morning and may it please the Court. [00:13:28] Speaker 04: I'm Michael Johnson from Arnold & Porter representing the Federal Housing Finance Agency. [00:13:33] Speaker 04: I think the Court's discussion with my friend was very enlightening. [00:13:36] Speaker 04: Two recent Supreme Court decisions separated by just about a year [00:13:41] Speaker 04: confirmed that the district court correctly dismissed this action and this court should have perm. [00:13:45] Speaker 04: Dispositive authorities, as the court discussed, are CFPB versus CFSA, 601 U.S. [00:13:50] Speaker 04: 416. [00:13:51] Speaker 04: That's the 2024 case focused on the Appropriations Clause. [00:13:55] Speaker 04: NFCC versus Consumers Research, that's 145 Supreme Court, 2042. [00:14:01] Speaker 04: The 2025 case focusing on the non-delegation doctrine taken separately but also viewed as interacting with each other, which is really, really important here. [00:14:12] Speaker 04: Those two decisions are fully dispositive [00:14:15] Speaker 04: We can read the same quotes that the court was asking my friend about, but every time the court states it's holding in the CFPB case, it says source and purpose. [00:14:26] Speaker 04: It does not say source, purpose, and cap. [00:14:29] Speaker 04: Yes, it does acknowledge that there was a cap in the statute at issue there. [00:14:35] Speaker 04: That's a statement of the facts. [00:14:37] Speaker 04: When the court states the rule, as Judge Bennett correctly identified, [00:14:41] Speaker 04: It does not mention anything about a cap, so my friend is left to argue that the Supreme Court must have implicitly meant to impose an additional requirement in addition to the very clear statement of source and purpose that it actually stated. [00:14:59] Speaker 04: We know that's wrong. [00:15:00] Speaker 04: as Judge Sanchez noted, because Justice Alito takes the majority to task for that. [00:15:08] Speaker 04: It says, hey, folks, what are you doing here? [00:15:11] Speaker 04: You're not requiring a cap, and I think you should. [00:15:15] Speaker 04: Now, if Justice Thomas had really meant to impose a cap through these oblique references and statements of the facts that my friend mentions, [00:15:27] Speaker 04: Wouldn't he have said, oh, no, no? [00:15:31] Speaker 04: Justice Alito, you've got it wrong. [00:15:34] Speaker 04: We actually are requiring a cap. [00:15:38] Speaker 04: That there's nothing like that in the decision. [00:15:41] Speaker 04: He never responds. [00:15:43] Speaker 04: When he does engage with the dissent, as Justice Thomas does, he didn't just brush off Justice Alito and say, I don't need to address the point you make. [00:15:53] Speaker 04: He says, there may be other constitutional checks on Congress's authority to create and fund an administrative agency [00:16:00] Speaker 04: But specifying the source and purpose is all the control the appropriations clause requires. [00:16:09] Speaker 04: Source and purpose is all the appropriations clause requires, not a cap. [00:16:17] Speaker 04: Now, when we get to the FCC case, we see an example among many, Justice Kagan cataloged several, a statute that has no cap. [00:16:30] Speaker 04: That was the whole focus of that part of the FCC non-delegation doctrine analysis. [00:16:37] Speaker 04: Did Congress inappropriately exceed its ability to delegate to the FCC because the universal service fund is unlimited in amount and the answer was no. [00:16:53] Speaker 04: And the language is quite clear here as well. [00:16:58] Speaker 04: All agree that section 254 contains no determinant cap or formula. [00:17:05] Speaker 04: The plaintiffs argued that invalidated it. [00:17:08] Speaker 04: Justice Kagan said, this court's precedents foreclose that argument. [00:17:14] Speaker 04: All you have to have is an intelligible principle to guide a determination [00:17:24] Speaker 04: of whether the agency was appropriately following the congressional guidance. [00:17:28] Speaker 04: And that standard, again, is trained on intelligible principles, not on numerical caps and mathematical formulas. [00:17:38] Speaker 04: So no cap under appropriations clause, no cap under non-delegation doctrine. [00:17:45] Speaker 04: The plaintiff's argument is that one or both somehow must require a cap. [00:17:50] Speaker 04: You just can't get there [00:17:53] Speaker 04: within these two decisions. [00:17:55] Speaker 04: And I mentioned that it's not just looking at them separately as one addressing appropriations clause, the other addressing non-delegation doctrine. [00:18:04] Speaker 04: There's an important interaction here. [00:18:06] Speaker 04: And that's because, as Justice Thomas has said in a couple of decisions from 2015, separation of powers decisions, Congress can't delegate authority it does not possess. [00:18:24] Speaker 04: Congress can't delegate authority it does not possess. [00:18:27] Speaker 04: Those decisions are Perez versus the Mortgage Bankers Association, that's 575 U.S. [00:18:35] Speaker 04: 91 and Justice Thomas's concurrence, the relevant language is 131 to 32. [00:18:42] Speaker 04: And he summarizes what he was saying in that decision in another 2015 decision, Department of Transportation versus Association of American Railroads, 575 U.S. [00:18:52] Speaker 04: 43. [00:18:54] Speaker 04: The relevant language in his concurrence is at page 68. [00:18:57] Speaker 04: Why is that important? [00:18:59] Speaker 04: Well, my friend says the appropriations clause itself requires a cap or an ascertainable limit. [00:19:09] Speaker 04: If the clause itself requires a cap or an ascertainable limit, Congress has no authority to make fake appropriations without a cap or an ascertainable limit. [00:19:26] Speaker 04: But in FCC, the court held that Congress could do that. [00:19:33] Speaker 04: So if Justice Thomas is right that Congress can't delegate authority it doesn't have, and my friend were right that the appropriations clause itself requires a cap or an ascertainable limit, then the FCC decision would have had to come out differently. [00:19:53] Speaker 04: because the actual holding is that Congress can properly delegate to an agency the authority to collect funds with no cap or ascertainable limit. [00:20:08] Speaker 04: So each of those two decisions standing alone, and especially when viewed together, positively refutes the cap theory upon which my friend defends. [00:20:18] Speaker 01: Mr. Johnson, can I ask you, the agency raised a standing concern, and we as a court have to ensure our own jurisdiction. [00:20:26] Speaker 01: Does Collins versus Yellen satisfy that concern? [00:20:31] Speaker 04: No, it doesn't, because look, I think we briefed the standing issues pretty thoroughly. [00:20:37] Speaker 04: I'm happy to discuss them as much as the court would find useful. [00:20:41] Speaker 04: I don't have a lot to add to the brief, but what Collins would look at was whether [00:20:47] Speaker 04: entering into a contract was properly within FHFA's authority. [00:20:53] Speaker 04: And the plaintiff's allegation was it's outside the authority and had there not been the contract, we wouldn't have been injured. [00:21:01] Speaker 04: So there is this straight line, this through line, this direct line of causation between entering into the contract was improper, that's the allegation. [00:21:13] Speaker 04: Therefore, there wouldn't have been a contract. [00:21:15] Speaker 04: Therefore, we wouldn't have suffered the losses that they claimed as their injury. [00:21:20] Speaker 04: Here, you can't make that same causation, traceability, self-inflicted injury. [00:21:28] Speaker 04: You can't clear that hurdle because whether FHFA had the same funding under a different statute, different funding under the same statute, different funding under a different statute, no funding under any statute, [00:21:43] Speaker 04: didn't exist anymore or were put into like frozen in the carbonite like in Star Wars. [00:21:50] Speaker 04: These foreclosures would have been proper. [00:21:53] Speaker 04: The liens are not the validity of the liens is not contested. [00:21:57] Speaker 04: There's no issue with the state law process here. [00:22:01] Speaker 04: These properties were subject to foreclosure and whether FHFA did or didn't do anything had or didn't have any money to spend on any activities. [00:22:12] Speaker 04: makes no difference to any of [00:22:16] Speaker 01: question of that approach is isn't that a version of what the Supreme Court rejected in Collins about trying to trace it to a statutory defect or defect in the statute as opposed to defendant's conduct? [00:22:30] Speaker 01: In other words, are we overthinking this? [00:22:31] Speaker 01: The straightforward argument is there's an unlawful unconstitutional appropriation to an agency that sets in motion these foreclosures and claims are harmed as a result. [00:22:43] Speaker 01: And if you're looking at defendant's conduct, that is sufficient for standing purposes. [00:22:49] Speaker 04: I don't think we're overthinking it, Your Honor, because FHFA doesn't have to do anything, ordinarily doesn't do anything, need not spend a dime. [00:22:58] Speaker 04: These foreclosures would happen regardless of FHFA's continued funding or continued existence. [00:23:05] Speaker 04: We can see that in the district court record. [00:23:07] Speaker 04: I think it's at [00:23:10] Speaker 04: These are the notices of default that are the document that really triggers the foreclosure. [00:23:17] Speaker 04: It's I think exhibits 32, 36-2 and 36-18 in the district court record and they are not in the excerpts of record in this court. [00:23:27] Speaker 04: But what those show is that, and by the way plaintiffs acknowledged this at page 6 in the reply brief, the mechanics of a foreclosure [00:23:36] Speaker 04: do not involve Fannie Mae or Freddie Mac or FHFA. [00:23:42] Speaker 04: The foreclosure is conducted by a mortgage servicer. [00:23:48] Speaker 04: And that would go forward whether FHFA existed or not. [00:23:52] Speaker 04: Imagine if FHFA just vanished tomorrow. [00:23:57] Speaker 04: Would all foreclosure activity on Fannie Mae and Freddie Mac loans have to stop? [00:24:01] Speaker 04: I don't think so. [00:24:02] Speaker 04: That would make no sense. [00:24:04] Speaker 04: The loans are in default. [00:24:05] Speaker 04: The liens are valid. [00:24:07] Speaker 04: The enforcement mechanism is totally proper under state law. [00:24:10] Speaker 04: So not only can you not draw that straight line that's required for traceability, you can't draw a curved line, although I guess my inner high school geometry teacher wants to say there's no such thing as a curved line, but you can't draw a sine wave, you can't draw an arc, you can't draw a spiral, you can't draw a dash. [00:24:29] Speaker 04: They're two parallel lines here. [00:24:32] Speaker 04: Plaintiff's failure to satisfy the lien leads to the foreclosure. [00:24:37] Speaker 04: period. [00:24:39] Speaker 04: Parallel to that, yes, FHFA regulates the housing finance market. [00:24:44] Speaker 04: It does some stuff that has some relationship to foreclosures. [00:24:50] Speaker 04: But if FHFA stopped doing all of that because it had no money or because it changed its policy or for any other reason, those foreclosures would go forward. [00:25:01] Speaker 04: Ironically, [00:25:03] Speaker 04: What plaintiff really wants is a directive that FHFA spend money to stop those foreclosures. [00:25:11] Speaker 04: And that's just not, that makes no sense. [00:25:14] Speaker 04: And that fails the traceability, redressability, and self-inflicted injury requirements of standing. [00:25:20] Speaker 04: So there is no standing here. [00:25:22] Speaker 04: But again, plaintiff's claim fails on the merits. [00:25:25] Speaker 04: And that's primarily what I'm here to tell the court. [00:25:34] Speaker 04: I want to spend just a moment on the post office statute because I think it's really important here. [00:25:42] Speaker 04: We hear and we see in the rhetoric that my friend put in the brief and speaks to the panel that it's all about an ascertainable cap or a some certain and their favorite authority is the 1904 version of words and phrases that says a some certain, an amount of money and no more [00:26:04] Speaker 04: So they beat that drum of ascertainable cap. [00:26:07] Speaker 04: But then when it's time to look at the post office statute that the second Congress enacted, second Congress populated by so many of the founders, there's no cap. [00:26:18] Speaker 04: There's no cap there. [00:26:19] Speaker 04: The post office could raise an unlimited amount of money. [00:26:24] Speaker 04: And the postmaster general, if we look at sections two and three of the statute, had enormous discretion in how much to raise and how to spend it. [00:26:33] Speaker 04: Postmaster General was granted authority to expand the postal network, was granted discretion to determine how to carry the mail, how often to carry the mail, what technology to use. [00:26:49] Speaker 04: So the Postmaster General is given a statute with some policy stuff. [00:26:53] Speaker 04: Yes, he was the Postmaster General. [00:26:56] Speaker 04: He wasn't the Secretary of the Navy, couldn't buy warships, but had to focus on the mail service. [00:27:04] Speaker 04: and then used his discretion, however he would find expedient and proper. [00:27:08] Speaker 04: Those are the key words. [00:27:09] Speaker 04: Those translate to reasonable in founding era language. [00:27:14] Speaker 04: And we've got the same hallmarks here. [00:27:16] Speaker 04: FHFA similarly has a restricted mission. [00:27:20] Speaker 04: And so, Judge Thomas, I think you're correct. [00:27:23] Speaker 04: There is a cap here. [00:27:25] Speaker 04: Even if we think one might be required, there is one. [00:27:28] Speaker 04: Congress told FHFA what it could do. [00:27:32] Speaker 04: it could regulate and supervise the housing finance market. [00:27:38] Speaker 04: And just like the OCC and the FDIC and the National Credit Union Administration and certain parts of the U.S. [00:27:44] Speaker 04: Treasury do that too, using appropriated funding, sometimes uncapped, FHFA can do that as long as it spends money within a reasonable expenses of satisfying its mission, that's [00:28:00] Speaker 04: proper under CFPB and consumers research. [00:28:06] Speaker 04: FHFA statutory mission is not limited to the four examples my friend cites. [00:28:11] Speaker 04: There's an entire 4,500 and 4,600 series that sets forth in exhaustive detail what the agency is authorized to do and what its mission is. [00:28:21] Speaker 04: When we couple that statutory cabin authority and limited mission with the language in 4516 that says [00:28:30] Speaker 04: Reasonable expenses sufficient to fulfill that mission are what you can do. [00:28:34] Speaker 04: That is a cap and there is no appropriations clause or delegation doctrine violation here. [00:28:39] Speaker 04: Again, the court should affirm. [00:28:41] Speaker 04: Thank you, Your Honors, very much. [00:28:43] Speaker 02: Thank you. [00:28:51] Speaker 03: Thank you, Your Honor. [00:28:52] Speaker 03: I'll briefly touch on standing. [00:28:53] Speaker 03: Your Honor is exactly right on our theory of standing. [00:28:56] Speaker 03: I only want to address a couple of the factual references made by my colleague. [00:29:00] Speaker 03: This idea that FHFA is not involved or doesn't control foreclosures, that's outside the record, outside the pleadings, and at minimum we would be entitled to discovery on that. [00:29:09] Speaker 03: before standing is resolved on the merits. [00:29:13] Speaker 03: It also contradicts their own public statements. [00:29:15] Speaker 03: We cite in the briefs the many times their directors have said, especially during COVID, we're going to tell our servicers not to foreclose. [00:29:22] Speaker 03: We're going to tell Fannie and Freddie not to foreclose. [00:29:25] Speaker 03: I would point the court to, I believe it's 715 in the record, which is statements from FHFA's own inspector general saying that generally we don't get involved in foreclosures, but we reserve the right to review and reverse them. [00:29:37] Speaker 03: So their own factual statements seem to contradict this idea that FHFA is not involved in foreclosures. [00:29:44] Speaker 03: We've pled that they have, and at this pleading stage, that is certainly enough. [00:29:49] Speaker 03: Going back to Judge Bennett's initial question, I'd also point the court to the very first paragraph in CFPB. [00:29:57] Speaker 03: the funding mechanism of CFPB and says, you know, Congress authorized the bureau to draw amounts reasonably necessary subject only to an inflation adjusted cap. [00:30:10] Speaker 03: He then continues in this case, we must decide the narrow question of whether this funding mechanism [00:30:16] Speaker 03: the appropriations clause, and we find that it does. [00:30:20] Speaker 03: This funding mechanism being the one with the cap. [00:30:22] Speaker 03: So at the end of the day, what CFPB did was affirm a funding mechanism with a cap. [00:30:28] Speaker 03: It didn't say you never need a cap. [00:30:30] Speaker 03: And if it's not part of the holding, then at minimum, it's an open question. [00:30:34] Speaker 03: And if it's an open question, I would encourage the court to look at text and history. [00:30:37] Speaker 03: I would also like to say thank you to the district court. [00:30:39] Speaker 03: My friend on the other side belittles the words and phrases compendium. [00:30:41] Speaker 03: They don't have an answer to that and they don't have an answer to the early state court cases either. [00:30:46] Speaker 03: So if it's open, text and history is on my side and the district court should be reversed. [00:30:51] Speaker 03: Thank you. [00:30:51] Speaker 02: All right. [00:30:52] Speaker 02: We thank counsel for their arguments. [00:30:53] Speaker 02: The case just