CITY OF SPOKANE, on behalf of itself and all others similarly situated, Plaintiff-Appellant,
FEDERAL NATIONAL MORTGAGE ASSOCIATION, AKA Fannie Mae, a federally chartered corporation; FEDERAL HOME LOAN MORTGAGE CORPORATION, AKA Freddie Mac, a federally chartered corporation; FEDERAL HOUSING FINANCE AGENCY, as conservator for Federal National Mortgage Association and Federal Home Loan Mortgage Corporation, Defendants-Appellees, UNITED STATES OF AMERICA, Intervenor-Appellee
Argued and Submitted, Seattle, Washington October 8, 2014.
On Appeal from the United States District Court for the Eastern District of Washington. D.C. No. 2:13-cv-00020-LRS. Lonny R. Suko, District Judge, Presiding.
The panel affirmed the district court's judgment in favor of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), and held that Congress exempted Fannie Mae and Freddie Mac from state and local taxation of real property transfers, and that it had constitutional authority to do so.
The panel held that Fannie Mae and Freddie Mac were statutorily exempt from paying real property transfer taxes in Washington. The panel also held that because Congress had power under the Commerce Clause to regulate the secondary mortgage market, it had power under the Necessary and Proper Clause not only to create Fannie Mae and Freddie Mac but also to ensure their preservation by exempting them from state and local taxes. Finally, the panel held that the exemptions did not violate the Tenth Amendment.
Kevin J. Curtis, Winston & Cashatt, Lawyers, Spokane, Washington; Charles T. Conrad, Jr. (argued), Dewsnup, King & Olsen, Salt Lake City, Utah, for Plaintiff-Appellant.
Howard N. Cayne, Asim Varma, Michael A.F. Johnson (argued), Dirk C. Phillips, Arnold & Porter LLP, Washington, D.C., for Defendant-Appellee Federal Housing Finance Agency.
Michael J. Ciatti, Merritt E. McAlister, King & Spalding LLP, Washington, D.C., for Defendant-Appellee Federal Home Loan Mortgage Corporation.
Michael D. Leffel, Foley & Lardner LLP, Madison, Wisconsin; Jill L. Nicholson, Foley & Lardner LLP, Chicago, Illinois, for Defendant-Appellee Federal National Mortgage Association.
Kathryn Keneally, Assistant Attorney General; Tamara W. Ashford, Principal Deputy Assistant Attorney General; Gilbert S. Rothenberg, Jonathan S. Cohen, Patrick J. Urda (argued), Attorneys, Tax Division, Department of Justice, Washington, D.C.; Michael C. Ormsby, United States Attorney, Of Counsel, for Appellee-Intervenor United States of America.
Before: Richard A. Paez, Jay S. Bybee, and Consuelo M. Callahan, Circuit Judges. Opinion by Judge Bybee.
BYBEE, Circuit Judge: