United States Court of Appeals, District of Columbia Circuit
May 12, 2017
Appeals from the United States District Court for the
District of Columbia (No. 1:10-cv-00943)
Bernabei argued the cause for appellant. With her on the
briefs was Alan R. Kabat.
Michael A.F. Johnson argued the cause for appellee Federal
Housing Finance Agency. With him on the brief were Howard N.
Cayne and Dirk Phillips.
Kasdan argued the cause for appellees The Federal National
Mortgage Association, et al. With him on the briefs were
Bezalel A. Stern and Elizabeth C. Johnson. Damien G. Stewart
entered an appearance.
Before: Brown and Kavanaugh, Circuit Judges, and Sentelle,
Senior Circuit Judge.
Sentelle, Senior Circuit Judge
Herron worked as an at-will contractor for the Federal
National Mortgage Association, commonly known as Fannie Mae,
on mortgage modification programs created by the Department
of the Treasury ("Treasury") in response to the
financial crisis in 2007 and 2008. According to Herron,
Fannie Mae blocked her attempt to become an embedded
contractor at Treasury and then terminated her contract work
with Fannie Mae in retaliation for her purported disclosures
of gross waste and mismanagement by Fannie Mae in
administering the programs. Herron sued Fannie Mae and three
Fannie Mae officers, asserting claims under District of
Columbia law and, in the alternative, under Bivens.
The district court dismissed the Bivens claim in a
published opinion, holding that Fannie Mae is not a
government actor, and, in a subsequent unpublished opinion,
granted summary judgment against Herron on her remaining
claims. For the reasons stated below, we affirm.
of the numerous acronyms and terms of art employed in this
opinion, we provide a brief glossary.
EESA Emergency Economic Stabilization Act of 2008
FAA Financial Agency Agreement
Fannie Mae Federal National Mortgage Association
Freddie Mac Federal Home Loan Mortgage Corporation
FHFA Federal Housing Finance Agency
HAMP Home Affordable Modification Program
HERA Housing and Economic Recovery Act of 2008
MHAP Making Home Affordable Program
the district court's opinions offer a detailed
description, see Herron v. Fannie Mae, No.
1:10-cv-943, 2016 WL 1177918, at *1-12 (D.D.C. Mar. 8, 2016)
("Summary Judgment Opinion"); Herron
v. Fannie Mae, 857 F.Supp.2d 87, 88-91 (D.D.C. 2012)
("Bivens Opinion"), we provide only a
brief summary of the facts and allegations in this case.
it originated as a government-owned entity, Fannie Mae became
a privately owned, government-sponsored corporation in 1968.
Perry Capital LLC v. Mnuchin, 848 F.3d 1072, 1080
(D.C. Cir. 2017). Fannie Mae and its brother corporation, the
Federal Home Loan Mortgage Corporation, also known as Freddie
Mac, "buy residential mortgages from banks, repackage
them for sale as mortgage-backed securities, and guarantee
these securities by promising to make investors whole if
borrowers default." Judicial Watch, Inc. v. Fed.
Housing Fin. Agency, 646 F.3d 924, 925 (D.C. Cir. 2011).
Fannie Mae and Freddie Mac play a central role in the
national mortgage market by providing lenders with capital to
make more loans. Perry Capital, 848 F.3d at 1080;
Judicial Watch, 646 F.3d at 926.
the 2000s, Fannie Mae and Freddie Mac "bought risky
mortgages and got caught up in the housing bubble."
DeKalb Cty. v. Fed. Housing Fin. Agency, 741 F.3d
795, 798 (7th Cir. 2013). The decline in housing prices in
the mid-2000s "substantially eroded the value of Fannie
[Mae]- and Freddie [Mac]-held mortgages." Judicial
Watch, 646 F.3d at 926. The ensuing financial crisis in
2007 and 2008 pushed both firms "to the brink of
collapse." Perry Capital, 848 F.3d at 1079. To
prevent these government-sponsored enterprises from
defaulting, Congress enacted the Housing and Economic
Recovery Act of 2008 ("HERA"), Pub. L. No. 110-289,
122 Stat. 2654. Perry Capital, 848 F.3d at 1079,
established the Intervenor Federal Housing Finance Agency
("FHFA"), an independent federal agency charged
with supervising and regulating Fannie Mae. See 12
U.S.C. § 4511; Perry Capital, 848 F.3d at
1080-81. Among other things, HERA authorized the FHFA to
place Fannie Mae into conservatorship. See 12 U.S.C.
§ 4617(a). It exercised that authority on September 6,
2008. In conjunction with the appointment of the FHFA as