Collins v. Yellen

Summary

Justice Alito’s majority opinion held that the Recovery Act bars the shareholders’ statutory challenge to the net worth sweep because the FHFA acted within its conservatorship authority. The Court held that the shareholders could pursue their constitutional challenge and that the restriction on removing the FHFA’s confirmed Director violates the separation of powers. That restriction does not apply to Acting Directors. Because the Directors were properly appointed, the unconstitutional removal restriction did not render their actions void; the Court remanded for consideration of whether the restriction caused compensable harm. The Fifth Circuit’s judgment was affirmed in part, reversed in part, and vacated in part. Justice Thomas joined fully but questioned whether the shareholders could establish any unlawful agency action. Justice Kagan concurred separately, accepting the constitutional result under stare decisis while criticizing the majority’s reasoning and endorsing its remedial approach; Justices Breyer and Sotomayor joined her remedial discussion. Justice Gorsuch concurred in part but would set aside the challenged implementation actions, subject to traditional remedial defenses. Justice Sotomayor, joined by Justice Breyer, concurred in the statutory and remedial portions but dissented from invalidating the removal protection.