Collins v. Yellen

Summary

Justice Alito’s majority opinion held that the Recovery Act barred 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 violated the separation of powers. That restriction did not apply to Acting Directors and did not automatically invalidate actions by properly appointed Directors. The Court affirmed in part, reversed in part, vacated in part, and remanded for consideration of harm attributable to the unconstitutional restriction and any resulting retrospective relief. Justice Thomas joined fully but separately questioned whether the shareholders could establish any unlawful agency action. Justice Kagan accepted the constitutional result under stare decisis while criticizing the majority’s reasoning and endorsed its remedial analysis; Justices Breyer and Sotomayor joined Part II of her opinion. Justice Gorsuch agreed on the merits but would treat the challenged implementation actions as void rather than require proof of harm from the removal restriction. Justice Sotomayor, joined by Justice Breyer, would uphold the Director’s removal protection while agreeing with the statutory and remedial analyses.