LAWRENCE — The U.S. Supreme Court will hear arguments Dec. 9 in Collins v. Mnuchin, a case arising from the financial crisis of 2008. Alexander Platt, associate professor of law at the University of Kansas, co-wrote an amicus brief for the court and is available to discuss the case with media.
At issue is whether the government will be immune from legal accountability for actions taken under the banner of its emergency crisis-management authority, even for actions taken long after a crisis has faded. Four years after bailing out Fannie Mae and Freddie Mac at the height of the financial crisis, the Federal Housing Finance Agency and U.S. Department of the Treasury changed the rules regarding how the private shareholders of those companies could be compensated when they make a profit, which prompted shareholders to sue, on grounds the changes were beyond the power of the FHFA. Platt, who specializes in the intersection of corporate and administrative law, can discuss the case, what the court’s ruling could mean for agencies and investors, and related topics. He co-wrote the brief with Steven Davidoff Solomon of the University of California-Berkeley and David Zaring of Wharton School of the University of Pennsylvania.
The brief was written in support of plaintiff Patrick J. Collins. In it, the authors summarize the times the executive branch and independent agencies have been called upon to respond to economic crises, including in 2008 and 2009. They also illustrate how the Federal Reserve and Treasury are currently acting to help soften the economic blow of the COVID-19 pandemic. In such events, normal means of guaranteeing transparency and accountability are not regularly enforced, increasing chances of abuses of power. The agencies that made changes at the heart of the case represent such an abuse, the authors argue, and the courts should not shy away from.
“While broad discretion for the government to act in a time of crisis without litigious interference might be necessary, that does not mean the executive ought to be immune from any and all forms of legal accountability for unlawful actions forever after — especially those taken long after a crisis has faded,” Platt said. “Sadly, it seems likely that the current virus-driven economic crisis will not be our last. As the court turns this week to consider a case arising out of the last great economic crisis, we hope that it keeps the next one in mind.”
Platt’s work has been published in leading law journals and cited by the Eleventh Circuit Court. He teaches classes in contracts and securities regulation, and he has recently published research on the Securities and Exchange Commission illegally denying hearings to defendants and a “revolving door” between the agency and private law firms.