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January 28, 1982

Barbara FOX, et al.

The opinion of the court was delivered by: NEWCOMER


Defendant Department of Housing and Urban Development ("HUD") moves for a stay pending appeal of this Court's Order of November 18, 1981, that HUD shall, among other things, make Government National Mortgage Association ("GNMA") funds available for the financing of a development project to be built in compliance with a consent decree approved by this Court.

 After I entered the Order of November 18, 1981, HUD moved to amend the judgment, arguing for the first time that the anti-injunction language contained in 12 U.S.C. § 1723a(a) bars this Court from ordering the Secretary of HUD to make GNMA financing available. *fn1" I denied HUD's motion to amend judgment on the basis of a waiver of that defense by the Secretary in his execution of the consent decree. After considering defendant's likelihood of prevailing on appeal and reconsidering the issue of waiver, I conclude that a waiver cannot be found in that transaction. Nevertheless, I will not vacate my order denying defendant's motion to amend judgment, because on the alternative grounds urged at that time the ruling was correct.

 The statute cited by HUD in its motion to amend judgment and in its motion for a stay is an express waiver of sovereign immunity, which states that GNMA "shall have power ... to sue and to be sued, and to complain and to defend, in any court of competent jurisdiction, State or Federal," which includes an express limitation. *fn2" 12 U.S.C. § 1723a(a). The issue to be decided is whether by virtue of that limitation Congress has permitted the Secretary to be subject to an order regarding the allocation of GNMA funds.

 Turning first to the language of the statute, it might seem that GNMA is permitted by statute to be sued for damages, but that injunctions may not be issued against it. The limitation on the waiver of sovereign immunity is, however, defined and it is not that broad. No "attachment, injunction, or other similar process ... shall be issued against the property of the Association or against the Association with respect to its property." 12 U.S.C. § 1723a(a) (Emphasis added) Clearly, some kinds of injunctions can be entered against GNMA; only those entered against its property are impermissible. Thus, I must conclude that my learned brother Cahn's statement, "Sovereign immunity precludes an injunction against GNMA." Crockett Mortgage Co. v. Government National Mortgage Ass'n., 418 F. Supp. 1081, 1083 (E.D.Pa.1976), is correct as a conclusion applicable to the facts of the case before him but cannot properly be broadly read as a general rule.

 Because only injunctions against GNMA's property are forbidden, I must now decide what kinds of injunctions are meant by those two phrases, and whether the order I have entered falls within that definition.

 The art of statutory construction has changed in recent decades from a mechanical application of the "plain meaning" of the words of a statute to a derivation of the legislative intent. Judge Aldisert has traced the history of this change, United States v. Cerilli, 603 F.2d 415, 429-30 (3d Cir. 1979) (Aldisert, J., dissenting), concluding that "the purpose, the subject matter, the context, and the legislative history appear to be the major aids in considering statutory precept today." Cerilli at 430. The word "property" is not defined in the GNMA statute. Neither is meaning of the word clear from the context of the sentence in which it is used. If Congress had meant to prevent all injunctions against GNMA it could have used language similar to the language it used in the Small Business Administration Act. 15 U.S.C. § 634(b) (1) *fn3" It did not do so and the plain meaning of the language it chose is not clear, so I must derive Congress's intent in proscribing certain injunctions and permitting others.

 Unfortunately, the legislative history of the 1954 amendments to the National Housing Act contains no articulation of Congress's purpose in adding the anti-injunction language of the Act. I am left then to consider the purpose, the subject matter, and the context of the statute as a whole. Congress declared its purposes in the statute itself.

The Congress declares that the purposes of this subchapter are to establish secondary market facilities for home mortgages, to provide that the operations thereof shall be financed by private capital to the maximum extent feasible, and to authorize such facilities to-
(a) provide supplementary assistance to the secondary market for home mortgages by providing a degree of liquidity for mortgage investments, thereby improving the distribution of investment capital available for home mortgage financing;
(b) provide special assistance (when, and to the extent that, the President has determined that it is in the public interest) for financing of (1) selected types of home mortgages (pending the establishment of their marketability) originated under special housing programs designed to provide housing of acceptable standards at full economic costs for segments of the national population which are unable to obtain adequate housing under established home financing programs, and (2) home mortgages generally as a means of retarding or stopping a decline in mortgage lending and home building activities which threatens materially the stability of a high level national economy; and
(c) manage and liquidate federally owned mortgage portfolios in an orderly manner, with a minimum of adverse effect upon the home mortgage market and minimum loss to the Federal Government.

 12 U.S.C. § 1716. GNMA has been charged with the duty of carrying out the purposes contained in paragraphs (b) and (c). 12 U.S.C. §§ 1720, 1721. GNMA receives money in congressional appropriations, collections on loans, loans from the Treasury Department, sale of securities, and the issuance of trust certificates, but GNMA is designed to operate with the minimal cost to the United States *fn4" , and all "benefits and burdens incident to the administration of the function and operations of the Association ... shall inure solely to the Secretary of the Treasury." 12 U.S.C. § 1722. GNMA's function can be analogized to arbitrage; it enters the market, buying mortgages from primary lenders, in order to stimulate the mortgage market, and then sells the mortgages. It is clear from the statutory scheme that Congress was interested in the promotion of the housing market, and that GNMA was intended to operate freely in that market. To that end, the anti-injunction clause forbids attachments, injunctions, "or other similar process." When considered in the light of GNMA's activities, which are in the purchase and sale of securities representing in some circumstances the credit of the United States or, in other cases, real property, the anti-injunction clauses take on a more restricted meaning. In particular, the initial use of the word "attachment" connotes execution of a lien; following in that vein, "injunction" must apply primarily to the "property" securing mortgage notes held by GNMA. And, indeed, that construction is wholly consistent with "the purpose, the subject matter, (and) the context," United States v. Cerilli, 603 F.2d 415, 430 (3rd Cir. 1979), of the GNMA statutes. It would cause no end of disturbances in GNMA's operation if the property underlying mortgages purchased by GNMA were subject to the liens and attachments, or injunctions, that are entered as a routine matter against ordinary debtors or litigants. *fn5" By contrast, no reason presents itself why GNMA should be exempt from injunctive orders with regard to its other attributes. Having reviewed the statute as a whole, I am convinced that the "property" referred to is the real property securing mortgages purchased by GNMA and conceivably, the mortgages themselves. I add this last phrase because the interpretation I have made of the statute does not limit the meaning of the word property to the real property securing the mortgage notes held by GNMA. It is clear from the statutory plan erected by Congress that GNMA requires a high degree of transferability in the mortgages that it acquires. Consistent with that rationale I conclude that the "property" referred to in 12 U.S.C. § 1723a(a) includes the mortgage notes acquired by GNMA.

 HUD argues that language in the enabling legislation of the Small Business Administration ("SBA") almost identical to the language of 12 U.S.C. § 1723a(a) has been interpreted more broadly, and that the reasoning in those cases should be instructive here. 15 U.S.C. § 634(b)(1). E.g. United States v. Mel's Lockers, Inc., 346 F.2d 168 (10th Cir. 1965). In fact, the language is significantly dissimilar. Where the GNMA statute says that injunctions shall not be entered against its property, or against it with regard to its property, the Small Business Administration Act states, "but no attachment, injunction, garnishment, or other similar process, mesne or final, shall be entered against the Administrator or his property." 15 U.S.C. § 634(b)(1). In contradistinction to the GNMA statute, no injunction may be entered against either the ...

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