Banking and Finance Law Daily Wrap Up, SUPREME COURT DOCKET—Recent decisions, cases, and petitions pending High Court review, (Mar 21, 2022)

By Thomas G. Wolfe, J.D.

This Banking and Finance Law Daily feature presents a chart highlighting the decisions, arguments, briefs, and petitions on banking and finance issues before the current term of the U.S. Supreme Court.

In connection with petitions filed with the U.S. Supreme Court affecting the banking and finance industry, there are two developments. In the first case, Montilla v. Federal National Mortgage Association (Sup. Ct. Docket No. 21-688), the High Court denied a petition brought by a pair of mortgage borrowers who asked the Court to review a June 2021 decision by the U.S. Court of Appeals for the First Circuit. The First Circuit had agreed with the lower federal district court that the Federal Housing Finance Agency and the government-sponsored enterprises (GSEs)—Fannie Mae and Freddie Mac—were not “government actors” subject to the borrowers’ claims against them for alleged due-process violations under the Fifth Amendment to the U.S. Constitution; rather, the FHFA and GSEs were “private actors.” Meanwhile, in the second case, TitleMax of Delaware, Inc. v. Weissmann (Sup. Ct. Docket No. 21-1262), lender TitleMax of Delaware, Inc. and its affiliates have filed a petition asking the Supreme Court to address whether “the dormant Commerce Clause prohibits Pennsylvania from extending its lending laws beyond its borders to loans that out-of-state lenders make to Pennsylvania residents at brick-and-mortar stores in Delaware, Virginia, and Ohio.”

Government Sponsored Enterprises. By declining to review the petition in Montilla v. Federal National Mortgage Association, this leaves intact the First Circuit’s decision affirming the dismissal of the mortgage borrowers’ action. The First Circuit held that “FHFA’s temporary conservatorship over the GSEs does not constitute permanent authority,” and the FHFA controls the GSEs “for the limited purpose of reorganizing, rehabilitating, or winding up their affairs (12 U.S.C. §4617(a)(2)).” From the First Circuit’s perspective, the fact that the U.S. Treasury “owns senior preferred stock in the GSEs,” which, if exercised, would give the Treasury nearly 80 percent of the GSEs’ common stock, “does not change the analysis” (see Banking and Finance Law Daily, Nov. 17, 2021).

Pennsylvania interest-usury laws; dormant Commerce Clause. In connection with the petition recently filed in TitleMax of Delaware, Inc. v. Weissmann, the U.S. Court of Appeals for the Third Circuit ruled in the underlying case that the Pennsylvania Department of Banking and Securities’ application of the Pennsylvania Consumer Discount Company Act and the Pennsylvania Loan Interest and Protection Law to an out-of-state lender, doing business in Delaware, Virginia, and Ohio as “TitleMax,” did not violate the dormant Commerce Clause of the U.S. Constitution (see Banking and Finance Law Daily, Jan. 25, 2022).

In its petition, TitleMax argues that the Third Circuit’s January 2022 decision is incompatible with a Seventh Circuit decision that, “on indistinguishable facts, found a dormant Commerce Clause violation.” Moreover, the lender maintains that the Third Circuit’s decision not only is “at odds with decisions from several other circuits that, in cases arising outside of the lending setting, have rejected States’ efforts to project their laws extraterritorially onto their residents’ commercial transactions in other States,” the decision also cannot “be reconciled with this Court’s dormant Commerce Clause jurisprudence.” Further, as a practical matter, the Third Circuit’s decision creates confusion and inconsistency for interstate commerce and for lender compliance, TitleMax asserts.

Supreme Court docket. For details about these and other petitions and cases pending before the Supreme Court, please consult this list. Issued opinions, granted petitions, pending petitions, and denied petitions are listed separately, along with a summary of the questions presented and the status of each case.

Attorneys: Eugene Scalia, Theodore B. Olson, Amir C. Tayrani, and Matt Gregory (Gibson, Dunn & Crutcher LLP) and Richard J. Zach and Douglas D. Hermann (Troutman Pepper Hamilton Sanders LLP) for TitleMax of Delaware, Inc. d/b/a TitleMax, TitleMax of Ohio, Inc. d/b/a TitleMax, TitleMax of Virginia, Inc. d/b/a TitleMax, and TMX Finance of Virginia, Inc.

Companies: Fannie Mae; Freddie Mac; TitleMax of Delaware, Inc. d/b/a TitleMax; TitleMax of Ohio, Inc. d/b/a TitleMax; TitleMax of Virginia, Inc. d/b/a TitleMax; TMX Finance of Virginia, Inc.

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