Supreme Court limits Fannie Mae’s ability to take cases to federal court

In a unanimous opinion handed down Wednesday, the Supreme Court limitedFannie Mae’s ability to transfer cases to federal court, ruling that the government-sponsored enterprise’s charter does not grant it the right to move all state cases to the federal level.

The decision, written by Justice Sonia Sotomayor, overturns a lower court’s ruling, which held that the “sue-and-be-sued” clause in Fannie Mae’s charter allowed for the GSE to transfer any lawsuits against it filed at the state level to federal court.

In the opinion, Sotomayor writes that none of Fannie Mae’s arguments about the interpretation of the  “sue-and-be-sued” clause are “persuasive.”

Sotomayor writes that the Court previously ruled on several other arguments from other federally chartered organizations, but notes that Fannie Mae’s charter differs in that “sue-and-be-sued” clause states that cases can be transferred to “any court of competent jurisdiction.”

The clause in question authorizes Fannie Mae “to sue and to be sued, and to complain and to defend, in any court of competent jurisdiction, State or Federal.”

That distinction places Fannie Mae on the losing end of this argument, according to the court’s ruling.

Read on.

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