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HERA Section 4617(f) Does Not Bar Plaintiffs’ Claims Against FHFA When They Acted Ultra Vires.

What is Ultra Vires?

Ultra Vires according to Wikipedia

Ultra vires is a Latin phrase meaning “beyond the powers“. If an act requires legal authority and it is done with such authority, it is characterized in law as intra vires (“within the powers“). If it is done without such authority, it is ultra vires. Acts that are intra vires may equivalently be termed “valid” and those that are ultra vires “invalid”.

In corporate law, ultra vires describes acts attempted by a corporation that are beyond the scope of powers granted by the corporation’s objects clause, articles of incorporation or in a clause in its Bylaws, in the laws authorizing a corporation’s formation, or similar founding documents. Acts attempted by a corporation that are beyond the scope of its charter are void or voidable.

Ultra Vires according to Cornell Law

Latin, meaning “beyond the powers.” Describes actions taken by government bodies or corporations that exceed the scope of power given to them by laws or corporate charters.  When referring to the acts of government bodies (e.g., legislatures), a constitution is most often the measuring stick of the proper scope of power.

Perry’s Appeals Court Transcript

JUDGE BROWN: Well, what if that’s not actually the question here, what if the question is not whether the conservator exercised the power, but whether the power that they exercised was the power authorized by the statute, or whether they acted ultra vires –

CAYNE: Right.


CAYNE: Yes, Your Honor, and the power that I’m suggesting that was exercised here was the power to operate the institutions, the determination was made that without these agreements the institutions couldn’t operate at all because they do into mandatory receivership, and down the road as laid out in great detail in our colleagues’ briefs from the Department of Justice, a determination was made that if we leave things as they are there may be a lot of periods —


CAYNE: — or some periods where the $19 billion dividend exceeds the amount of profits for that year, which will have the effect of reducing the Treasury commitment, and perhaps shorting the life, giving less backup support, and that was a, you know, a paradigm of a business judgment. The business judgment was made by the conservator that this new arrangement will better allow the preservation of the commitment. And for purposes of the Court’s analysis I would, the Court should say well, that was clearly a wrong judgment, maybe the Second Amendment was better, maybe a Fourth Amendment with a different paradigm would be better, but that is the heartland of what Congress said, we are a power that we are investing in the conservator that we don’t want to authorize third parties, or shareholders, or courts to challenges, we want —

JUDGE BROWN: All right.

CAYNE: — this to operate as a business.

JUDGE BROWN: Mr. Cayne —


JUDGE BROWN: — I think — did you have a question?



A finding of Ultra Vires could open doors across most if not all filed complaints against FHFA with an order denying the Motion to Dismiss.

Judge Chang unsealing the Roberts Plaintiffs’ Amended Complaint

A Direct Claim could also deny the Motion to Substitute against FHFA with the auditors complaints and FNMA books and records complaint. See Section 4617(b)(2) Does Not Apply to Direct Claims

But first, plaintiffs need to have their auditors’ complaints remanded back to State Court.

Edwards Plaintiffs are asking Judge Moreno to remand their lawsuit against PwC to state court.

Edwards Plaintiffs are asking Judge Scola to remand their lawsuit against Deloitte to state court.

Time will only tell if justice is served.