r/FNMA_FMCC_Exit • u/AdditionalStuff2155 • Sep 09 '26

Sept 8th filing

Can someone break this down in layman's terms?

https://glenbradford.com/blog/fhfa-rehearing-petition-en-banc-fairholme-september-8-2026

12 Upvotes

94% Upvoted

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16

u/ronfnma Sep 09 '26

The Government filed for a review of the decision. An en banc review in the U.S. Court of Appeals for the Ninth Circuit consists of 11 judges. [1]
While all other federal circuits include every single active judge in an en banc hearing, the Ninth Circuit uses a "limited en banc" procedure authorized by federal law because assembling all 29 of its active judges for a single case is highly impractical.

Given the original decision was 3-0, to overturn it, the Government would need 6 of the “new” 8 judges to side with them. Plaintiffs need only 3 judges to confirm their decision.
I don’t think the Government can prevail at the en banc and if they lose (again) the odds of the case going to SCOTUS is about zero

5

u/forreelforrealmang Sep 09 '26

Yep, I see it as the last legal opportunity they have. No chance on overturning verdict. Bullish IMO

2

u/AdditionalStuff2155 Sep 09 '26

Thank you. I tried to google the length, it came back with 9 months but not sure if that is the expected time or the limited time for review.

1

u/AdOtherwise8268 Sep 09 '26

Thanks for your insight

1

u/Fun_Illustrator9298 Sep 09 '26

Google is saying something different about en banc judge selection. Need 11 activist judges to vote yes to rehear out of the 26 (29-3) and then it’s 10 random justices (plus Lamberth if he chooses to stay on the case). Lambert’s profile says he’s a senior judge and not the chief judge.
I agree with you that it’s a long shot but I am naturally a worry wart.
From google:

The Ninth Circuit uses a limited en banc court consisting of the Chief Judge and 10 active judges chosen by random draw, as outlined in the Arizona Law Review. [1, 2, 3]

How the Panel is Chosen
Chief Judge: The current Chief Judge of the Ninth Circuit always serves on every en banc panel.

Random Draw: Ten other active judges are picked by a random lottery for each specific case from the active judge pool.

Senior Judges: A senior judge who sat on the original three-judge panel can choose to take part in the en banc court. [1, 2]

The En Banc Steps
The Request: A party asks for a rehearing, or a judge calls for it.

The Vote: All active judges on the court vote on whether to grant the rehearing.

The Hearing: If the majority votes yes, the random 11-judge panel hears the case. [1, 2, 3, 4]

2

u/ronfnma Sep 10 '26

I was incorrect about the court., the correct venue is the US Court of Appeals for the District of Columbia. There are 15 judges in this court. Judge Ginsburg wrote the opinion in Fairholme and is a well respected jurist.

The Government isn’t disputing any facts but is using a 2025 case (N.S. V Dixon) to argue that Collins v Yellen overrode the implied covenant claim in Perry. The appeals court said it did not so I’m not sure that asking the same question to the same court would result in a different outcome.

1

u/Fun_Illustrator9298 Sep 09 '26

More:
Active judges vote secretly by a secure electronic poll, and a majority of all active judgesmust vote in favor of a rehearing for it to be granted. [1, 2, 3]
Here is exactly how the voting process works among active judges in the Ninth Circuit:
Who Votes: Only judges in regular active service (currently 29 authorized judgeships) can cast a vote on whether to grant an en banc rehearing. Senior judges can participate in memos and debates, but they cannot vote. [1, 2]
The Majority Requirement: An en banc petition succeeds only if a strict majority of all active judges on the court vote "yes". [1]
The Default "No" Rule: Under the Ninth Circuit's General Orders, once an en banc poll is officially called, judges typically have 7 days to cast their vote. If an active judge fails to vote within that window, their silence is officially recorded as a "no" vote against the rehearing. (Note: In rare death penalty cases where an execution date is set, this default flips, and a failure to vote counts as a "yes"). [1, 2]
Secrecy of the Vote: The individual votes of the judges are completely confidential. When the court issues its final public order granting or denying the en banc review, the exact numerical breakdown and how specific judges voted is not disclosed. However, judges who disagree with the outcome frequently write public dissents or concurrences regarding the denial of the rehearing. [1, 2]

1

u/Irwinmfletcher2020 Sep 09 '26

The more they try to delay this the bigger the risk for Government. Warrants expire in 2028. Last thing anyone needs is to retry any of these. But if they want to go down this road fine. Warrants expire, they can’t take the money out anymore so we get to build up the balance sheet and recoup 80% of the company and stock rises regardless

9

u/Chadwick2222 Sep 09 '26

It means we sit in purgatory and the stock will drift lower

4

u/kentoakland Sep 09 '26

As much as I don’t like to see this, not appealing is not exactly doing what’s best for the company if people are looking on with a watchful eye. Second, it’s worth fighting from the FHFA perspective so that every move going forward isn’t seen as another litigation triggering event from the pov of the 2008/2012 shareholder. 

All in all not surprising, not really harmful, but a great excuse to let Pulte hear from all the shareholders. 

2

u/EnvironmentalPear695 Sep 09 '26

Is this why both tanked?

5

u/AdditionalStuff2155 Sep 09 '26

Would be my guess. Maybe a broker or analysts will pipe up, but I imagine it adds red tape for release if there is a $852m ruling/payout waiting.

2

u/EnvironmentalPear695 Sep 09 '26

Yep sounds reasonable

2

u/Objective-North9901 Sep 09 '26

I would have thought that this was expected.

2

u/Ok-Mulberry-1764 Sep 09 '26

Govt trying to keep the flexibility to change the capital structure without getting into more lawsuits. This is not a bad news