Early In July, Gibson Dunn & Crutcher’s Theodore Olson made headlines when he filed a lawsuit accusing the federal government of blocking private stockholders of Fannie Mae and Freddie Mac from getting their fair share. Since then, more than a half-dozen plaintiffs firms have gotten into the game, filing related cases in Washington’s federal district court and in the U.S. Court of Federal Claims.

The cases challenge an August 2012 agreement between the conservator of Fannie and Freddie—the Federal Housing Finance Agency—and the U.S. Department of Treasury that changed the structure of preferred stock purchase agreements held by Treasury.

According to the complaint, the 2012 agreement essentially diverted Fannie and Freddie’s net worth to the Treasury Department, leaving no money to pay dividends on stocks held by private companies and individuals. The plaintiffs accused the government of making the change just as Fannie and Freddie were recovering from the economic downturn and posting profits.

Similar cases were also filed in the U.S. Court of Federal Claims, although one of those lawsuits, filed by Seattle’s Hagens Berman Sobol Shapiro and Philadelphia’s Spector Roseman Kodroff & Willis in June, is challenging the overarching legitimacy of the conservatorships of Fannie and Freddie, as opposed to just the August 2012 agreement.

Gibson Dunn kicked off the district court action July 7, filing a case for investment fund manager Perry Capital LLC. Three days later, Washington’s Cooper & Kirk sued on behalf of mutual fund Fairholme Funds Inc. and a group of insurance companies that held stock in Fannie and Freddie. Cooper & Kirk also filed an action in federal claims court on July 9.

Boies, Schiller & Flexner is also pursuing claims in federal district and federal claims court. With Radnor, Pa.’s Kessler Topaz Meltzer & Check serving as co-counsel in both instances, Boies Schiller filed complaints in the federal claims court on July 10 and in district court on July 29.

“I think what happened is unprecedented,” Boies Schiller’s Hamish Hume said. “I really think it is about as egregious a case of appropriation as we’ve seen in a while.”

Finkelstein Thompson is representing plaintiffs in two separate district court cases. In the first, filed on July 16, the firm is working with Los Angeles’ Glancy Binkow & Goldberg to represent individuals that owned Fannie and Freddie securities. On July 30 the firm filed another case, this time with New York’s Pomerantz Grossman Hufford Dahlstrom & Gross, on behalf of insurance companies that held stock.
Pomerantz and Brower Piven in Stevenson, Md., also filed a case in federal claims court on July 19.

Hume said that given differences in the cases, from the scope of claims to the type of relief sought, he didn’t think they would be consolidated, although they might be coordinated under the same judges; so far they’ve been assigned to Judge Robert Wilkins. No consolidation motion has been filed.

Hagens Berman is attempting to consolidate the cases in federal claims court. In its motion, the firm disputed a claim by Hume’s client that there were “important differences” between the cases. Those cases have all been assigned to Judge Margaret Sweeney. (Partner Steven Berman could not be reached for comment.)
Also worth noting: the cases have brought together Gibson Dunn and Boies Schiller with former foe Cooper & Kirk. Gibson Dunn and Boies Schiller sparred with Cooper & Kirk in the U.S. Supreme Court legal fight last term over California’s Proposition 8 ballot initiative barring same-sex marriage. “We look forward to working with both Gibson Dunn and Cooper & Kirk,” Hume said.