Howard Cayne counsels financial and other institutions on a broad range of regulatory, compliance, and transactional issues. He is actively involved in the firm's representation of the Federal Housing Finance Agency (FHFA) as Conservator in a broad range of litigation in multiple state and federal courts throughout the nation.
Mr. Cayne has also litigated many significant enforcement, supervisory, and liability issues facing institutions, and their officers and directors. He has played a prominent role in much of the most significant federal banking litigation of the past three decades, and served as trial counsel in a number of cases resulting in hundreds of millions of dollars in total judgments against the United States. Currently, Mr. Cayne is actively involved in challenging, on grounds of federal preemption, state and local efforts to supervise and regulate activities of federally chartered financial institutions. Together with other members of the firm's preemption litigation team, he has achieved a number of important victories for federally chartered banks, savings institutions, and credit unions threatened with overreaching state and local actions.
Other representative matters handled by Mr. Cayne include the Winstar breach of contract litigations against the United States government. In addition, Mr. Cayne has successfully handled the litigation and settlement of major class and derivative actions against large financial institutions. Mr. Cayne also represents plaintiff utilities in prosecuting claims against the federal government arising out of the United States' failure to perform its contractual obligations to remove spent nuclear fuel stored at commercial nuclear power plants and dispose of it in accordance with the Nuclear Waste Policy Act of 1982.
Before joining Arnold & Porter LLP in 1984, Mr. Cayne served as a senior attorney in the Enforcement and Compliance Division of the Comptroller of the Currency. In addition, he has served on the adjunct faculty teaching Banking Law Enforcement at the Boston University.
Financial Institutions Representative Matters
Federal Housing Finance Agency
- Obtained dismissal of multiple actions against FHFA, in which Fannie Mae and Freddie Mac shareholders challenged an amendment to FHFA's contract with the Treasury Department concerning the government's commitment of funds to the Enterprises. The court held that federal law barred any judicial interference with FHFA's conduct as Conservator, and also precluded all shareholder derivative lawsuits while the Enterprises are under the conservatorship of FHFA. See Perry Capital LLC v. Lew, --- F. Supp. 3d ----, 2014 WL 4829559 (D.D.C. Sept. 30, 2014). Also obtained subsequent dismissal of similar suit against FHFA on preclusion grounds. See Cont'l W. Ins. Co. v. FHFA, No. --- F. Supp. 3d ----, 2015 WL 428342 (S.D. Iowa Feb. 3, 2015).
- Obtained dismissal of case brought against FHFA by the Massachusetts Attorney General that sought to enjoin FHFA, Fannie Mae, and Freddie Mac from implementing a policy requiring that purchasers of REO properties promise not to reconvey the property back to the borrower, on grounds that the policy violated state consumer-protection laws. See Massachusetts v. FHFA, 54 F. Supp. 3d 94 (D. Mass. 2014).
- Obtained dismissal of an APA challenge to an FHFA directive indefinitely suspending Fannie Mae's and Freddie Mac's contributions to national housing trust funds. The court ruled that plaintiffs lacked standing, and that FHFA has no enforceable legal obligation to revisit its suspension decisions. See Samuels v. FHFA, 54 F. Supp. 3d 1328 (S.D. Fla. 2014).
- Obtained an order permitting FHFA to substitute itself in place of shareholder plaintiffs who had purported to sue the Treasury Department derivatively on behalf of Fannie Mae over Fannie Mae's inability to sell low income housing tax credits ("LIHTCs") to third parties. See Gail C. Sweeney Estate Marital Trust v. U.S. Treasury Dep't, --- F.Supp.3d ----, 2014 WL 4661983 (D.D.C. Sept. 19, 2014).
- Obtained victories in eleven federal appeals in nine circuit courts on behalf of FHFA, confirming and upholding Fannie Mae and Freddie Mac's statutory exemption from real-estate transfer taxes, thereby defeating claims that exposed the Enterprises to more than $1 billion in potential cumulative damages.
- Montgomery Cnty. Comm'n v. FHFA, 776 F.3d 1247 (11th Cir. 2015);
- City of Spokane v. Fed. Nat'l Mortg. Ass'n, 775 F.3d 1113 (9th Cir. 2014);
- Town of Johnston v. FHFA, 765 F.3d 80, 82 (1st Cir. 2014);
- Bd. of Cnty. Comm'rs of Montgomery Cnty., Ohio v. FHFA, 758 F.3d 706 (6th Cir. 2014);
- Bd. of Cnty. Comm'rs of Kay Cnty. v. FHFA, 754 F.3d 1025 (D.C. Cir. 2014);
- Vadnais v. Fed. Nat'l Mortg. Ass'n, 754 F.3d 524 (8th Cir 2014);
- Delaware Cnty., Pa. v. FHFA, 747 F.3d 215 (3rd Cir. 2014);
- Hennepin Cnty. v. Fed. Nat'l Mortg. Ass'n, 742 F.3d 818 (8th Cir. 2014);
- Montgomery Cnty., Md. v. FHFA, 740 F.3d 914 (4th Cir. 2014);
- DeKalb Cnty. v. FHFA, 741 F.3d 795 (7th Cir. 2013);
- County of Oakland v. FHFA, 716 F.3d 935 (6th Cir. 2013), cert. denied 134 S. Ct. 394 (2013).
- Prevailed in multiple appeals in the Sixth Circuit Court of Appeals, as well as in numerous other federal district courts (and one state appellate court), in actions seeking to assert constitutional claims against Fannie Mae and Freddie Mac. The courts held that the Enterprises are not government actors for purposes of takings, due process, and other constitutional claims.
- Rush v. Fed. Home Loan Mortg. Corp., 792 F.3d 600 (6th Cir. 2015);
- Garcia v. Fed. Nat. Mortg. Ass'n, 782 F.3d 736 (6th Cir. 2015);
- Heibel v. Fed. Nat. Mortg. Ass'n, 581 F. App'x 543, 544 (6th Cir. 2014);
- Bernard v. Fed. Nat. Mortg. Ass'n, 587 Fed. App'x 266 (6th Cir. Sept. 29, 2014);
- Rubin v. Fed. Nat. Mortg. Ass'n, 587 Fed. App'x 273 (6th Cir. Sept. 29, 2014);
- Fed. Home Loan Mortg. Corp. v. Gaines, 589 Fed. App'x 314 (6th Cir. Sept. 30, 2014);
- Federal Home Loan Mortg. Corp. v. Montague, No. 1:13cv1162, 2014 WL 4313633 (W.D. Mich. Sept. 2, 2014);
- Colyer v. Federal Home Loan Mortg. Corp., No. 13-10425, 2014 WL 1048009 (E.D. Mich. Mar. 18, 2014);
- Narra v. Fed. Nat. Mortg. Ass'n, No. 2:13cv12282, 2014 WL 505571 (E.D. Mich. Feb. 7, 2014);
- In re Kapla, 2014 WL 346019 (E.D. Mich. Jan. 30, 2014);
- Dias v. Fed. Nat. Mortg. Ass'n, 990 F.Supp.2d 1042 (D. Hawaii 2013);
- Fed. Home Loan Mortgage Ass'n v. Kelley, 858 N.W.2d 69 (Mich. Ct. App. 2014).
- Obtained dismissal on behalf of FHFA of a False Claims Act qui tam action alleging that Fannie Mae's failure to pay New York's mortgage recordation tax embodied a so-called "reverse false claim." The Court held that Fannie Mae's and FHFA's federal statutory exemptions from state taxation precluded imposition of the tax. See Knight v. Fed. Nat. Mortgage Ass'n, No. 1:13-CV-0183, 2014 WL 4901617 (N.D.N.Y. Sept. 30, 2014).
- Obtained victory on behalf of FHFA before the Virginia Supreme Court, which ruled in FHFA's favor in a certified-question proceeding concerning the authority of county clerks to enforce Virginia's transfer taxes. See Small v. Fed. Nat. Mortgage Ass'n, 286 Va. 119, 747 S.E.2d 817 (2013).
- Prevailed at the trial and appellate levels on behalf of FHFA in multiple lawsuits concerning so-called PACE programs, with the courts upholding FHFA's ability as conservator to direct Fannie Mae and Freddie Mac not to purchase PACE loans (aimed at financing energy-efficient home improvements) on the ground that FHFA believed those loans were too risky. County of Sonoma v. FHFA, 710 F.3d 987 (9th Cir. 2013); Leon Cnty., Fla. v. FHFA, 700 F.3d 1273 (11th Cir. 2012); Town of Babylon v. FHFA, 699 F.3d 221 (2d Cir. 2012).
- Sacramento Municipal Utility District v. United States, (U.S. Court of Appeals for the Federal Circuit Jun. 20, 2014). Won appeal reinstating a US$53 million judgment against the United States for breach of its contract with the utility for disposal of nuclear waste.
- DeNaples v. Office of the Comptroller of the Currency, 706 F.3d 481 (D.C. Cir. 2013). Obtained vacation of cease-and-desist order issued by the Office of the Comptroller of the Currency and the Federal Reserve Board banning Mr. DeNaples from the banking industry.
- Kellmer v. Raines, 674 F.3d 848 (D.C. Cir. 2012) and Louisiana Mun. Police Employees Ret. Sys. v. FHFA, 434 F. App'x 188 (4th Cir. May 5, 2011). Prevailed at the trial and appellate levels on behalf of FHFA and its substitution in place of shareholder-plaintiffs who sought to pursue derivative claims on behalf of Fannie Mae and Freddie Mac.
- Eaton v. Federal National Mortgage Association, 462 Mass. 569 (2012). Represented FHFA in a significant victory before the Supreme Judicial Court of Massachusetts, in which the court held that a mortgagee must either possess the underlying mortgage note or prove it had authority from the note holder to foreclose. The court accepted FHFA's argument as amicus in support of Fannie Mae that the court apply its holding prospectively only, avoiding potential clouds of title to thousands of foreclosed properties in Massachusetts.
- Williams v. Timothy Geithner, et al., Civil No. 09-1959 ADM/JGG, (U.S. District Court of Minnesota, November 9, 2009). Defeated motion for a preliminary injunction and dismissal of complaint in putative class action alleging that the FHFA and other defendants violated plaintiffs' rights to due process when they were denied modifications to their mortgages under the Home Affordable Modification Program (HAMP).
- Abreu v. Countrywide, et al., Case No. RWT 08cv2635 (D. Md., July 23, 2009). Won a motion to dismiss on jurisdictional grounds a putative consumer class action that sought to enjoin Freddie Mac from foreclosing on a large number of mortgages.
- National Association of Mortgage Brokers v. Federal Housing Finance Agency, D.D.C., Civil Action No. 09-00356: Successful defense of the FHFA in a challenge to its adoption, on behalf of the enterprises, of a new Home Valuation Code of Conduct, which an association of mortgage brokers had alleged to be improper agency rule-making.
- Miller v. Bank of America, N.A. (U.S.A.)(January 28, 2009). The California Court of Appeal affirmed on federal preemption grounds the trial court's judgment in favor of Bank of America, N.A. (U.S.A.), now known as FIA Card Services, N.A. The decision is the first published California state appellate decision in recent history to find a state law preempted as applied to national banks.
Law360 MVP 2015 for Banking
Chambers USA: America's Leading Lawyers for Business 2007-2015 for Financial Services Regulation: Banking (Enforcement & Investigations) (Nationwide)
The Legal 500 US 2011 for Financial Services
The Legal 500 US 2012 for Financial Services: Litigation