Attorney Keith Poliakoff comments on an impending Supreme court decision on whether Fannie Mae can be sued in both state and federal court. Law360 reports that the nation's high court is considering a narrow question of how Fannie Mae’s decades-old congressional charter should be interpreted. At issue is a 1954 amendment that authorizes Fannie "to sue and to be sued, and to complain and to defend, in any court of competent jurisdiction, state or federal." According to Law360, a 2014 ruling by the Ninth Circuit interpreted those words to find that the federally backed mortgage financing enterprise could dictate the forum — state or federal — of its choice.
In the present case, the circuit court allowed Fannie to take a foreclosure battle filed by a pair of homeowners in California state court and remand it to federal court. Legal experts say that a decision to uphold the Ninth Circuit's ruling could shift over 60,000 present Fannie Mae cases, and future cases to federal court, which they say is Fannie's preferred venue.
Keith M. Poliakoff, co-chair of Arnstein & Lehr LLP's government relations practice group, had this to say,
The high court has the difficult decision of weighing not just the language of the charter, but also the potential for a logjam in federal court should it uphold the Ninth Circuit's decision.
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