County of Oakland v. Federal Housing Finance Agency

716 F.3d 935, 2013 WL 2149964, 2013 U.S. App. LEXIS 10032
CourtCourt of Appeals for the Sixth Circuit
DecidedMay 20, 2013
Docket12-2135, 12-2136
StatusPublished
Cited by23 cases

This text of 716 F.3d 935 (County of Oakland v. Federal Housing Finance Agency) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
County of Oakland v. Federal Housing Finance Agency, 716 F.3d 935, 2013 WL 2149964, 2013 U.S. App. LEXIS 10032 (6th Cir. 2013).

Opinion

OPINION

McKEAGUE, Circuit Judge.

The State and County plaintiffs sued the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), and the Federal Housing and Finance Agency in an effort to collect state and local real estate transfer taxes that plaintiffs claim are owed for real property transfers made by defendants. Congress expressly exempted all three defendants from “all [state and local] taxation.” In an effort to get around the plain language of the exemption statutes, plaintiffs argue that when Congress exempted' the defendants from “all taxation,” it did not intend to exempt them from State and County real estate transfer taxes. The district court agreed with this argument and granted summary judgment in plaintiffs’ favor. We now reverse and remand with instruc *937 tions to enter summary judgment for defendants. ■

I.

The Michigan State Real Estate Transfer Tax, Mich. Comp. Laws § 207.521, et seq., and the Michigan County Real Estate Transfer Tax, Mich. Comp. Laws § 207.501, et seq. (the “Transfer Taxes”) impose a tax when a deed or other instrument of conveyance is recorded during 'the transfer of real property. See Mioh. Comp. Laws § 207.502; § 207.523. 1 The laws make clear that the tax is imposed upon “the person who is the seller or grantor.” Mich. Comp. Laws § 207.502(2) (“The tax shall be upon the person who is the seller or grantor.”); § 207.523(2) (“The person who is the seller or grantor of the property is liable for the tax imposed under this act.”). In filing this lawsuit, the State and County plaintiffs seek to recover transfer taxes from defendants for-real property transfers recorded by defendants in Michigan.

Defendant’ Fannie Mae is a corporation chartered by Congress to “establish secondary market facilities for residential mortgages,” in order to “provide stability in the secondary market for residential mortgages,” and “promote access to mortgage credit throughout the Nation.” 12 U.S.C. § 1716. Defendant Freddie Mac is also a corporation chartered by Congress for substantially the same purposes as Fannie Mae. Id. § 1451. Defendant Federal Housing Finance Agency, is an independent federal agency, created under the Housing and Economic Recovery Act of 2008, Pub. L. No. 110-289,, 122 Stat. 2654, codified in part at 12 U.S.C. § 4617, et seq. The Director of the Agency placed Fannie and Freddie into conservatorships “for the purpose of reorganizing, rehabili-fating, or winding up [their] affairs.... ” 12 U.S.C. § 4617(a)(2). As Conservator, the Agency succeeds to all of the “rights, titles, powers, and privileges” of Fannie and Freddie, and also has the power to “operate” them, “conduct all [of their] business,” and “preserve and conserve” their “assets and property.” Id. § 4617(b)(2).

When Congress created defendants, it expressly exempted them from “all” state and local taxes except for taxes on real property. Fannie Mae’s charter provides:

The corporation, including its franchise, capital, reserves, surplus, mortgages or other security holdings, and income, shall’be exempt from all taxation now or hereafter imposed by any State, ... county, municipality, or local taxing authority, except that any real property of the corporation shall be subject to State, ... county, municipal, or local taxation to the same extent as other real property is taxed.

12 U.S.C. § 1723a(c)(2).

Similarly, Freddie Mac’s charter provides:

The Corporation, including its franchise, activities, capital, reserves, surplus, and -income, shall be exempt from all taxation-, now or hereafter imposed by any ... State, county, municipality, or local taxing authority, except that any real property of the Corporation shall be subject to State, ... county, municipal, or local taxation to the same extent according to its value as other real property is taxed.

12 U.S.C. § 1452(e).

Finally, when Congress enacted the Housing and Economic Recovery Act, it granted the Agency a similar exemption in its role as Conservator:

*938 The Agency [as Conservator], including its franchise, its capital, reserves, and surplus, and its income, shall be exempt from all taxation imposed by any State, county, municipality, or local taxing authority, except that any real property of the Agency [as Conservator] shall be subject to' State, territorial, county, municipal, or local taxation to the same extent according to its value as other real property is taxed....

12 U.S.C. § 4617(j)(2).

On June 20, 2011, Oakland County sued Fannie and Freddie alleging they failed to pay transfer taxes for transactions in which they were the grantors of real property. 2 On November 10, 2011, in a separate action, Genesee County filed a.class action suit against all of the defendants on behalf of itself and all Michigan counties similarly situated. The class Complaint made the same allegations as the Oakland County Complaint. The district court certified the class in the Genesee County case. Oakland County opted out. The Michigan Attorney General and Department of Treasury intervened in both actions.

The parties in both actions filed cross-motions for summary judgment, and the district court ultimately granted summary judgment in favor of the State and County plaintiffs. Oakland Cnty. v. Fed. Hous. Fin. Agency, 871 F.Supp.2d 662, 671 (E.D.Mich.2012). 3 The court first noted that the parties largely agreed on several issues, including that the statutes control the outcome of the case, and that “transfer taxes are excise taxes, not taxes on real property. Therefore, the Transfer Taxes do not fit into the exception in the statutes for real property.” Id. at 666-67. The court drew two other relevant conclusions. First, it held that United States v. Wells Fargo Bank, 485 U.S. 351, 108 S.Ct. 1179, 99 L.Ed.2d 368 (1988) was “dispositive of Plaintiffs case,” and that “[t]he Court in Wells Fargo recognized that ‘all taxation’ had an understood meaning, and that it applied only to direct taxes, not excise taxes.” Id. at 669.

Second, even though defendants did not argue that they were immune ’from the Michigan taxes based on their status as federal instrumentalities, 4

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Bluebook (online)
716 F.3d 935, 2013 WL 2149964, 2013 U.S. App. LEXIS 10032, Counsel Stack Legal Research, https://law.counselstack.com/opinion/county-of-oakland-v-federal-housing-finance-agency-ca6-2013.