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Rafter v. Dep't of Treasury

United States District Court, D. Columbia.

January 21, 2015

LOUISE RAFTER, et al., Plaintiffs,


For DEPARTMENT OF THE TREASURY, JACOB J. LEW, in his official capacity as Secretary of the Treasury, Defendants: Joel L. McElvain, LEAD ATTORNEY, U.S. DEPARTMENT OF JUSTICE, Washington, DC.

For FEDERAL HOUSING FINANCE AGENCY, MELVIN L. WATT, in his official capacity as Director of the Federal Housing Finance Agency, Defendants: Howard Neil Cayne, LEAD ATTORNEY, Asim Varma, ARNOLD & PORTER LLP, Washington, DC.


Royce C. Lamberth, United States District Judge.

Before the Court is the defendants' motion to strike the plaintiffs' notice of voluntary dismissal [17]. Upon consideration of the defendants' motion [16], the plaintiffs' opposition [18] thereto, the defendants' reply [19], the applicable law, and the entire record herein, the Court will DENY the defendants' motion to strike.


This matter hinges on whether the complaint filed by the plaintiffs in this case was automatically consolidated with the Consolidated Class Action, In re Fannie Mae/Freddie Mac Senior Preferred Stock Purchase Agreement Class Action Litigations, No. 13 Misc. 1288, that this Court dismissed pursuant to its Memorandum Opinion in Perry Capital LLC v. Lew, 70 F.Supp.3d 208, 2014 WL 4829559 (D.D.C. 2014). As the Court will explain, no such automatic consolidation occurred.

This Court, then District (now Circuit) Judge Wilkins presiding, issued an Order consolidating seven lawsuits, each of which

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was " styled as a class action and/or a derivative action," into one Consolidated Class Action. Consolidation Order, In re Fannie Mae/Freddie Mac, No. 13 Misc. 1288 (D.D.C. Nov. 18, 2013), ECF No. 1. The Court noted that the Consolidation Order shall also apply to " each putative class action and/or derivative action that is subsequently filed in or transferred to this Court that relates to the same subject matter as in the Consolidated Class Action." Id. ¶ 2. Yet, as described below, the Consolidation Order further delineated a series of steps to be followed for consolidation to take place. See Id. ¶ ¶ 3, 6, 7.

The plaintiffs filed their complaint in this action against the Department of the Treasury and the Federal Housing Finance Authority (" FHFA" ) on August 15, 2014. Compl., ECF No. 1. The complaint featured purportedly direct claims for breach of fiduciary duty against FHFA and Treasury, among other claims. See Id. Counts V-VII. A day earlier, the same plaintiffs in this case had filed a complaint in the Court of Federal Claims alleging derivative and takings claims. Compl., Rafter v. United States, No. 14 Civ. 740 (Fed. Cl. Aug. 14, 2014). The Court of Claims action was assigned to Judge Sweeney, who had already been assigned a related takings case brought by Fairholme Funds.[1] See Compl., Fairholme Funds, Inc., v. United States, No. 13 Civ. 465 (Fed. Cl. July 9, 2013).

On September 30, 2014, this Court dismissed the Consolidated Class Action, along with three other individual lawsuits, that had presented a number of claims closely related to the claims in Rafter. Perry Capital, 70 F.Supp.3d 208, 2014 WL 4829559. On October 10, 2014, the Clerk's Office accidentally terminated the Rafter case, only to fix its error later that same day. In light of the Perry Capital Opinion, the defendants in Rafter sought an extension of time to file dispositive motions regarding the effect of Perry Capital on the present case. See Mot., ECF No. 11. The Court granted the defendants' unopposed motion, setting November 3, 2014, as the due date for the defendants' respective briefs. Order, ECF No. 12.

On October 31, 2014--three days before the defendants' dispositive motions were due--the plaintiffs filed a notice of voluntary dismissal, ECF No. 16, pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(i). The Clerk's Office terminated the case on November 3, 2014. Three weeks later, Judge Sweeney of the Federal Court of Claims granted the Rafter plaintiffs' leave to file an amicus brief in the Fairholme action. Fairholme, No. 13 Civ. 465 (Fed. Cl. Nov. 24, 2014), ECF No. 108. In Fairholme, the government defendants had recently filed a motion for stay pending appeal of the Perry Capital decision to the Court of Appeals for the District of Columbia Circuit, or, in the alternative, dismissal based on Perry Capital 's alleged preclusive effect. Id., ECF No. 103. The amicus brief noted that the Perry Capital decision cannot preclude the Rafter plaintiffs' related case in front of Judge Sweeney due to their voluntary dismissal of the case in front of this Court. See Amicus Brief 2-3 & n.1, id., ECF No. 107-1.

Two weeks following the Rafter plaintiffs' amicus brief in Fairholme arguing against preclusion, the defendants in the present case filed their motion to strike the notice of voluntary ...

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