12-3207-cv
Federal Housing Fin. Agency v. UBS Americas Inc.


                            UNITED STATES COURT OF APPEALS
                                FOR THE SECOND CIRCUIT

                                   August Term 2012

  (Argued:       November 26, 2012                 Decided:   April 5, 2013)

                             Docket No. 12-3207-cv



                     FEDERAL HOUSING FINANCE AGENCY,
                 AS CONSERVATOR FOR THE FEDERAL NATIONAL
                         MORTGAGE ASSOCIATION AND
               THE FEDERAL HOME LOAN MORTGAGE CORPORATION,

                                                     Plaintiff-Appellee,

                                          v.

          UBS AMERICAS INC., UBS REAL ESTATE SECURITIES INC.,
           UBS SECURITIES, LLC, MORTGAGE ASSET SECURITIZATION
                    TRANSACTIONS, INC., DAVID MARTIN,
             PER DYRVIK, HUGH CORCORAN, AND PETER SLAGOWITZ,

                                                     Defendants-Appellants.



Before:
                     CHIN    ANDLOHIER, Circuit Judges,
                       AND   GARDEPHE, District Judge.*




      *
          The Honorable Paul G. Gardephe, United States District
Judge for the Southern District of New York, sitting by
designation.
         Appeal from an interlocutory order of the United

States District Court for the Southern District of New York

(Denise Cote, J.) denying in part defendants-appellants'

motion to dismiss the second amended complaint brought by

plaintiff-appellee Federal Housing Finance Agency as

conservator of the Federal National Mortgage Association and

the Federal Home Loan Mortgage Corporation.      The district

court rejected defendants-appellants' arguments that the

action was untimely and that FHFA lacked standing to bring

this suit.

         AFFIRMED.



                     KATHLEEN M. SULLIVAN (Philippe Z. Selendy,
                           Christine H. Chung, Adam M.
                           Abensohn, William B. Adams, on the
                           brief), Quinn Emanuel Urquhart &
                           Sullivan, LLP, New York, New York,
                           for Plaintiff-Appellee.

                     JAY B. KASNER (Scott D. Musoff, Joseph N.
                          Sacca, Robert A. Fumerton, Alexander
                          C. Drylewski, on the brief),
                          Skadden, Arps, Slate, Meagher & Flom
                          LLP, New York, New York, for
                          Defendants-Appellants.




                                -2-
DANIEL TENNY (Mark B. Stern and Thomas M.
      Bondy, on the brief), for Stuart F.
      Delery, Acting Assistant Attorney
      General, Civil Division, U.S.
      Department of Justice, Washington,
      D.C., and Preet Bharara, United
      States Attorney for the Southern
      District of New York, New York, New
      York, for Amicus Curiae United
      States.

Michael J. Dell and Aaron M. Frankel,
     Kramer Levin Naftalis & Frankel LLP,
     New York, New York, and Ira D.
     Hammerman and Kevin Carroll,
     Washington, D.C., for Amicus Curiae
     Securities Industry and Financial
     Markets Association.

Richard W. Painter (Mary-Christine
     Sungaila, Snell & Wilmer L.L.P.,
     Costa Mesa, California, on the
     brief), University of Minnesota Law
     School, Minneapolis, Minnesota, for
     Amicus Curiae Professor Richard W.
     Painter.

Michael O. Ware, Catherine A. Bernard,
     and Mark G. Hanchet, Mayer Brown
     LLP, New York, New York, and
     Washington, D.C.; Matthew Solum,
     Robert J. Kopecky, and Devon M.
     Largio, Kirkland & Ellis LLP, New
     York, New York, and Chicago,
     Illinois; David Blatt and John
     McNichols, Williams & Connolly LLP,
     Washington, D.C.; David H. Braff,
     Brian T. Frawley, Jeffrey T. Scott,
     Joshua Fritsch, Bruce Clark, Amanda


          -3-
                       F. Davidoff, Richard H. Klapper,
                       Theodore Edelman, Michael T.
                       Tomaino, Jr., Tracy Richelle High,
                       Penny Shane, Sharon L. Nelles, and
                       Jonathan M. Sedlak, Sullivan &
                       Cromwell LLP, New York, New York,
                       and Washington, D.C.; Brad S. Karp,
                       Bruce Birenboim, and Susanna M.
                       Buergel, Paul, Weiss, Rifkind,
                       Wharton & Garrison LLP, New York,
                       New York; Richard W. Clary and
                       Michael T. Reynolds, Cravath, Swaine
                       & Moore LLP, New York, New York;
                       Thomas C. Rice, David J. Woll, and
                       Alan Turner, Simpson Thacher &
                       Bartlett LLP, New York, New York;
                       Greg A. Danilow and Vernon
                       Broderick, Weil, Gotshal, & Manges
                       LLP, New York, New York; and James
                       P. Rouhandeh, Brian S. Weinstein,
                       Daniel J. Schwartz, Nicholas N.
                       George, and Jane M. Morril, Davis
                       Polk & Wardwell LLP, New York, New
                       York; for Amici Curiae Related-Case
                       Financial Institution Defendants.



CHIN, Circuit Judge:

         In this case, the Federal Housing Finance Agency

("FHFA"), as conservator of the Federal National Mortgage

Association ("Fannie Mae") and the Federal Home Loan

Mortgage Corporation ("Freddie Mac"), sued UBS Americas

Inc., certain affiliated entities, and several officers


                            -4-
(collectively, "UBS") for fraud and misrepresentation in

connection with the marketing and sale of mortgage-backed

securities.   FHFA has filed some seventeen other similar

actions against other financial institutions involved in the

mortgage-backed securities industry.

         In the district court, UBS moved to dismiss on the

grounds, inter alia, that (1) the action was untimely and

(2) FHFA lacked standing to bring suit.     The district court

(Cote, J.) denied these prongs of the motion, and certified

its decision for interlocutory appeal.    We granted UBS's

petition for leave to bring this interlocutory appeal.        We

now affirm.

                    Statement of the Case

A.   Statutory Background

         In July 2008, in response to the national housing

and economic crisis, Congress passed the Housing and

Economic Recovery Act of 2008 ("HERA").     See Pub. L. No.

110-289, 122 Stat. 2654 (2008).    Congress enacted HERA

because it was concerned about the financial condition of

Fannie Mae, Freddie Mac, and other government-sponsored


                             -5-
entities ("GSEs").   Hence, Congress created FHFA as an

"independent agency of the Federal Government," 12 U.S.C.

§ 4511(a), and conferred upon FHFA broad power to appoint

itself conservator or receiver of the GSEs, id. § 4617(a),

and to "take such action as may be . . . necessary to put

the [GSEs] in a sound and solvent condition; and . . .

appropriate to carry on the business of the [GSEs] and

preserve and conserve [their] assets and property," id.

§ 4617(b)(2)(D).   Congress specifically authorized FHFA, as

conservator or receiver, to "collect all obligations and

money due the [GSEs]."     Id. § 4617(b)(2)(B)(ii).

         HERA set forth provisions governing the

limitations period for actions brought by FHFA as

conservator or receiver.    Section 4617(b)(12) of HERA (the

"extender statute") provides:

         (A) In General

         Notwithstanding any provision of any
         contract, the applicable statute of
         limitations with regard to any action
         brought by the Agency as conservator or
         receiver shall be --




                               -6-
         (i) in the case of any contract claim,
             the longer of --

             (I) the 6-year period beginning
                 on the date on which the
                 claim accrues; or

             (II) the period applicable under
                  State law; and

         (ii) in the case of any tort claim, the longer
              of --

             (I) the 3-year period beginning
                 on the date on which the
                 claim accrues; or

             (II) the period applicable under State
                  law.

         (B) Determination of the date on which a claim
             accrues

         For purposes of subparagraph (A), the date
         on which the statute of limitations begins
         to run on any claim described in such
         subparagraph shall be the later of --

         (i) the date of the appointment of the
             Agency as conservator or receiver;
             or

         (ii) the date on which the cause of action
              accrues.

12 U.S.C. § 4617(b)(12).




                            -7-
          On July 30, 2008, as HERA was signed into law,

Congress appointed James B. Lockhart III Acting Director of

FHFA.   Lockhart had previously been nominated by President

Bush and confirmed by the Senate as Director of the Office

of Federal Housing Enterprise Oversight ("OFHEO") of the

U.S. Department of Housing and Urban Development.   On August

25, 2009, after Lockhart resigned his position from FHFA,

President Obama designated Edward DeMarco -- who was then

Deputy Director of FHFA -- as its Acting Director, effective

September 1, 2009.

B.   The Facts

          As relevant to this appeal, the allegations of the

second amended complaint are assumed to be true and may be

summarized as follows:

          From September 2005 through August 2007, Fannie

Mae and Freddie Mac purchased $6.4 billion in residential

mortgage-backed securities sponsored or underwritten by UBS.

They did so in reliance on certain false and misleading

statements contained in the offering documents.   In

particular, UBS represented to potential investors that the


                             -8-
mortgage loans serving as collateral for the securitizations

were underwritten in accordance with established guidelines

to ensure that borrowers could meet their payment

obligations, and UBS provided statistical material relating

to the likelihood that underlying mortgage loans would be

repaid.   These representations were false.   As a consequence

of their reliance on these representations, Fannie Mae and

Freddie Mac sustained massive losses.

          Acting Director Lockhart appointed FHFA

conservator of Fannie Mae and Freddie Mac on September 6,

2008.

C.   The Proceedings Below

          On July 27, 2011, more than three years after the

last of the securities offerings in question but within

three years of FHFA's appointment as conservator, FHFA

commenced this action below.    It did so at the direction of

Acting Director DeMarco.

          On September 2, 2011, FHFA filed some seventeen

other similar actions against other financial institutions.

Sixteen of these actions were assigned to Judge Cote in the


                               -9-
Southern District of New York as related to this case, but

one was subsequently transferred to the Central District of

California.   The seventeenth case was filed in the District

of Connecticut.

         The second amended complaint asserted claims under

§§ 11, 12(a)(2), and 15 of the Securities Act of 1933 (the

"Securities Act"), 15 U.S.C. §§ 77k, 77l(a)(2), and 77o; the

Virginia Securities Act, Va. Code Ann. § 13.1-522(A)(ii);

and the District of Columbia Securities Act, D.C. Code § 31-

5606.05(a)(1)(B), (C).   The second amended complaint also

asserted a common law claim for negligent misrepresentation.

Defendants moved to dismiss, contending, inter alia, that

the securities claims were time-barred, FHFA had no standing

to pursue the action because its Director had not been

constitutionally appointed, and the negligent

misrepresentation claim failed to state a claim upon which

relief could be granted.

         On May 4, 2012, in a thorough and carefully

considered opinion and order, the district court denied the

motion to dismiss with respect to the statutory claims and


                             -10-
granted it only with respect to the negligent

misrepresentation claim.    See FHFA v. UBS Americas, Inc.,

858 F. Supp. 2d 306 (S.D.N.Y. 2012).     By order entered June

19, 2012, the district court certified an interlocutory

appeal from its May 4th opinion and order.     On August 14,

2012, we granted UBS's petition for interlocutory appeal.

                           DISCUSSION

         On this appeal from the district court's ruling on

a motion to dismiss, we review the district court's legal

conclusions de novo, accepting the factual allegations of

the second amended complaint as true.     See Commack Self-

Serv. Kosher Meats, Inc. v. Hooker, 680 F.3d 194, 203 (2d

Cir. 2012).

         Two issues are presented:      first, the timeliness

of this action, and, second, FHFA's standing to bring this

suit.

A.   Timeliness

         The principal question is whether FHFA's claims

under the Securities Act and the Virginia and D.C. Blue Sky

laws are governed by HERA's extender statute, including, in

particular, the provision extending the "statute of

                              -11-
limitations" for tort claims to the three-year period after

the appointment of FHFA as conservator or receiver.       12

U.S.C. § 4617(b)(12).   UBS argues that HERA's extender

statute applies only to "statutes of limitations" and not to

"statutes of repose"; the Securities Act and the Virginia

and D.C. Blue Sky laws are governed by "statutes of repose,"

which are separate and distinct from "statutes of

limitations"; and the applicable "statutes of repose" all

expired prior to the commencement of suit in the district

court.

    1.     Applicable Law

           "Statutes of repose and statutes of limitations

are often confused, though they are distinct."    Ma v.

Merrill Lynch, Pierce, Fenner & Smith, Inc., 597 F.3d 84, 88

n.4 (2d Cir. 2010).    Statutes of limitations limit the

availability of remedies and, accordingly, may be subject to

equitable considerations, such as tolling, or a discovery

rule.    See P. Stolz Family P'ship L.P. v. Daum, 355 F.3d 92,

102 (2d Cir. 2004).    In contrast, statutes of repose affect

the underlying right, not just the remedy, and thus they


                              -12-
"run without interruption once the necessary triggering

event has occurred, even if equitable considerations would

warrant tolling or even if the plaintiff has not yet, or

could not yet have, discovered that she has a cause of

action."   Id. at 102-03.    In fact, a statute of repose may

bar a claim even before the plaintiff suffers injury,

leaving her without any remedy.       See id. at 103; accord

Stuart v. Am. Cyanamid Co., 158 F.3d 622, 627 (2d Cir.

1998).

           As UBS correctly notes, we have characterized the

three-year statute of limitations in § 13 of the Securities

Act as a "statute of repose."     P. Stolz, 355 F.3d at 96; see

also Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson,

501 U.S. 350, 360 & n.5, 362 (1991) (referring to "3-year

period of repose" in Securities Act and 1934 Exchange

Act).1   UBS also argues, and we assume without deciding the


     1
          Titled "Limitation of Actions," § 13 of the Securities
Act provides:

           No action shall be maintained to enforce any
           liability created under section 77k [§ 11] or
           77l(a)(2) [§ 12(a)(2)] of this title unless
           brought within one year after the discovery

                               -13-
question, that the limitations provisions of the Virginia

and D.C. Blue Sky laws are also statutes of repose.       The

question thus is whether the words "the applicable statute

of limitations" in § 4617(b)(12) of HERA refer only to

"statutes of limitations" and not to "statutes of repose."

          In construing a statute, we begin with the plain

language, giving all undefined terms their ordinary meaning.

See Schindler Elevator Corp. v. United States ex rel. Kirk,

131 S. Ct. 1885, 1891 (2011); United States v. Desposito,

704 F.3d 221, 226 (2d Cir. 2013); 23-34 94th St. Grocery

Corp. v. N.Y.C. Bd. of Health, 685 F.3d 174, 182 (2d Cir.

2012).   Absent ambiguity, our analysis also ends with the

statutory language.   See Schindler Elevator Corp., 131 S.

Ct. at 1893; Devine v. United States, 202 F.3d 547, 551 (2d


          of the untrue statement or the omission, or
          after such discovery should have been made by
          the exercise of reasonable diligence . . . .
          In no event shall any such action be brought
          to enforce a liability created under section
          77k or 77l(a)(1) of this title more than
          three years after the security was bona fide
          offered to the public, or under section
          77l(a)(2) of this title more than three years
          after the sale.

15 U.S.C. § 77m (emphasis added).

                              -14-
Cir. 2000).   "[W]e must presume that the statute says what

it means."    Devine, 202 F.3d at 551.     In interpreting a

statute, however, courts are not to "construe each phrase

literally or in isolation."      Pettus v. Morgenthau, 554 F.3d

293, 297 (2d Cir. 2009).    We must "attempt to ascertain how

a reasonable reader would understand the statutory text,

considered as a whole."    Id.    If we conclude that the text

is ambiguous, we will look to legislative history and other

tools of statutory interpretation.       See Auburn Hous. Auth.

v. Martinez, 277 F.3d 138, 143-44 (2d Cir. 2002).

    2.   Application

         We hold that § 4617(b)(12) of HERA applies to this

action, and thus we conclude that the district court

correctly denied UBS's motion to dismiss.      We discuss in

turn the text of the statute, its legislative history, and

UBS's argument that the reference to "statutes of

limitations" excludes "statutes of repose."

         a.    The Statutory Text

         The words of the statute make clear that HERA

applies to the claims brought by FHFA in this case.      Section


                                 -15-
4617(b)(12) sets forth "the applicable statute of

limitations with regard to any action brought by [FHFA] as

conservator or receiver."    12 U.S.C. § 4617(b)(12)(A)

(emphasis added).    It provides that the limitations period

"shall be" six years for contract cases, three years for

tort cases, or in either case the respective applicable

period under state law if that period is longer.        Id.

§ 4617(b)(12)(A)(i), (ii) (emphasis added).     It further

provides that "the date on which the statute of limitations

begins to run" is the later of (i) the date FHFA is

appointed conservator or receiver or (ii) the date the cause

of action accrues.     Id. § 4617(b)(12)(B)(i), (ii).

         By explicitly stating that "the" statute of

limitations for "any action" brought by FHFA as conservator

"shall be" as specified in § 4617(b)(12), Congress clearly

provided that the extender statute shall apply to an action

such as this one -- an action brought by FHFA, as

conservator, to recover "obligations and money" due Fannie

Mae and Freddie Mac.     Id. § 4617(b)(2)(B)(ii).   By using

these words, Congress precluded the possibility that some


                               -16-
other limitations period might apply to claims brought by

FHFA as conservator.     Giving the words of § 4617(b)(12)

their plain meaning, and considering the provision as a

whole, we conclude that a reasonable reader could only

understand it to apply to both the federal and state claims

in this case.

          b.    The Legislative History

          To the extent there is any ambiguity in the words

of the extender statute, the legislative history eliminates

any doubt.     Congress enacted HERA and created FHFA in

response to the housing and economic crisis, precisely

because it wanted to address the dire financial condition of

Fannie Mae and Freddie Mac.    As HERA makes clear, Congress

intended FHFA to take action to "collect all obligations and

money due" to the GSEs, to restore them to a "sound and

solvent condition."     12 U.S.C. § 4617(b)(2)(B)(ii), (D).

          Congress obviously realized that it would take

time for this new agency to mobilize and to consider whether

it wished to bring any claims and, if so, where and how to

do so.   Congress enacted HERA's extender statute to give


                               -17-
FHFA the time to investigate and develop potential claims on

behalf of the GSEs -- and thus it provided for a period of

at least three years from the commencement of a

conservatorship to bring suit.2

          Of course, the collapse of the mortgage-backed

securities market was a major cause of the GSEs' financial

predicament, and it must have been evident to Congress when

it was enacting HERA that FHFA would have to consider

potential claims under the federal securities and state Blue

     2
          Congress drew the language of § 4617(b)(12) from
similar provisions in the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 ("FIRREA"), 12 U.S.C.
§ 1821(d)(14), and the Federal Credit Union Act, 12 U.S.C.
§ 1787(b)(14). In construing the limitations provision in
FIRREA, the Fifth Circuit recognized that its purpose was to give
the agency in question, the Resolution Trust Corporation (the
"RTC"), "three years from the date upon which it is appointed
receiver to decide whether to bring any causes of action held by
a failed savings and loan. This three-year period allows the RTC
to investigate and determine what causes of action it should
bring on behalf of a failed institution." FDIC v. Barton, 96
F.3d 128, 133 (5th Cir. 1996). In drawing on FIRREA's language,
Congress intended for § 4617(b)(12) of HERA to serve a similar
purpose with respect to FHFA. See In re Countrywide Fin. Corp.
Mortgage-Backed Sec. Litig., __ F. Supp. 2d __, Nos. 2:11-ML-
02265, 2:12-CV-1059 MRP, 2012 WL 5275327, at *9 (C.D. Cal. Oct.
18, 2012) ("The apparent purpose of the extender statute was to
grant FHFA 'more time to decide whether and how to pursue any
claims it inherited as Fannie Mae's newly-appointed conservator,'
in order to 'put the regulated entit[ies] in a sound and solvent
condition.'" (quoting FHFA v. UBS Americas, Inc., 858 F. Supp. 2d
306, 316 (S.D.N.Y. 2012))).

                              -18-
Sky laws.    It would have made no sense for Congress to have

carved out securities claims from the ambit of the extender

statute, as doing so would have undermined Congress's intent

to restore Fannie Mae and Freddie Mac to financial

stability.

            c.   Statutes of Limitations
                 and Statutes of Repose

            We turn, then, to UBS's argument that

§ 4617(b)(12)'s use of the phrase "statute of limitations"

means it does not apply to "statutes of repose" such as

those contained in the Securities Act and the Virginia and

D.C. Blue Sky laws.     The argument fails.

            Although statutes of limitations and statutes of

repose are distinct in theory, the courts -- including the

Supreme Court and this Court -- have long used the term

"statute of limitations" to refer to statutes of repose,

including specifically with respect to § 13 of the

Securities Act.3    Similarly, when Congress extended the


    3
          See, e.g., Ernst & Ernst v. Hochfelder, 425 U.S. 185,
210 (1976) ("Section 13 specifies a statute of limitations of one
year from the time the violation was or should have been
discovered, in no event to exceed three years from the time of

                               -19-
limitations periods for securities fraud actions in the

Sarbanes-Oxley Act of 2002, it did so in a section entitled

"Statutes of Limitations for Securities Fraud," Sarbanes-

Oxley Act of 2002, § 804, Pub. L. No. 107-204, 116 Stat.

745, 801 (codified at 28 U.S.C. § 1658(b)), even though

securities claims under § 10(b) of the Securities Exchange

Act of 1934 and Rule 10b-5 were governed by both a one-year

statute of limitations and a three-year statute of repose

similar to those in § 13 of the Securities Act.      See Lampf,

Pleva, Lipkind, Prupis & Petigrow, 501 U.S. at 364 & n.9; P.

Stolz, 355 F.3d at 104 (noting that Sarbanes-Oxley

"extend[ed] the effective date of the statute of repose from

three years to five years" (emphasis added)).     In other

contexts as well, Congress has enacted statutes that use the



offer or sale . . . ."(emphasis added)); In re WorldCom Sec.
Litig., 496 F.3d 245, 250 (2d Cir. 2007) (referring to "the
Securities Act's one- and three-year statutes of limitations"
(emphasis added)); In re Ames Dep't Stores, Inc. Note Litig., 991
F.2d 968, 979 (2d Cir. 1993) ("The statute of limitations for
claims under §§ 11 and 12(2) of the Securities Act is set forth
in § 13 . . . ." (emphasis added)); Finkel v. Stratton Corp., 962
F.2d 169, 173 (2d Cir. 1992) (referring to "the two tiered § 13
statute of limitations" (emphasis added)); see also Countrywide,
2012 WL 5275327, at *6 (collecting cases); UBS Americas, 858 F.
Supp. 2d at 315 (collecting cases).

                              -20-
term "statute of limitations" when referring to statutes of

repose.4

           In view of the text of the statute and its

legislative history as discussed above, it is clear that

Congress intended one statute of limitations --

§ 4617(b)(12) of HERA -- to apply to all claims brought by

FHFA as conservator.    If Congress had really wanted to

exclude securities claims from the ambit of HERA's extender

statute, it surely would have done so clearly and explicitly

instead of by opaquely using the phrase "statute of

limitations" rather than the words "statute of repose."      It

would not have elected to use language that "the applicable

statute of limitations with regard to any action brought by

[FHFA] as conservator or receiver shall be" as set forth in

the extender statute.    12 U.S.C. § 4617(b)(12) (emphasis

added).    As the district court held below:

    4
          See Countrywide, 2012 WL 5275327, at *5 ("Congressional
statutes continue to use the term 'statutes of limitations' to
encompass statutes of repose . . . . The United States Code is
littered with statutory provisions entitled 'statute of
limitations,' 'time limits,' 'time limitations' and 'limitations
of actions,' that regulate both when plaintiffs can bring a claim
after discovery of their rights and when plaintiffs are
absolutely barred from bringing a claim." (citations omitted)).

                              -21-
          The more natural reading of the
          provision, the one that is both inline
          with everyday usage and consistent with
          the objectives of the statute overall, is
          that by including in HERA a provision
          explicitly setting out the "statute[s] of
          limitations" applicable to claims by
          FHFA, Congress intended to prescribe
          comprehensive time limitations for "any
          action" that the Agency might bring as
          conservator, including claims to which a
          statute of repose generally attaches.

UBS Americas, 858 F. Supp. 2d at 316-17.

          Accordingly, we hold that § 4617(b)(12) of HERA

applies to this action and supplants any other time

limitations that otherwise might have applied.   As FHFA

commenced suit within three years after it was appointed

conservator of Freddie Mac and Fannie Mae, the action was

timely.   The district court correctly denied this prong of

UBS's motion to dismiss.

B.   Standing

          UBS argues that FHFA lacks standing to prosecute

this action because the appointments of Lockhart and DeMarco

as Acting Directors of FHFA were unconstitutional as:

(1) Lockhart was appointed by Congress without being



                             -22-
nominated by the President and (2) DeMarco was appointed by

the President without Senate confirmation.5    Both arguments

fail.

            First, Lockhart had been earlier nominated by the

President and confirmed by the Senate to serve as Director

of OFHEO.    As the district court correctly held, "Congress

may confer on validly appointed officers 'additional duties,

germane to the offices already held by them . . . without

thereby rendering it necessary that the incumbent should be

again nominated and appointed.'"     UBS Americas, 858 F. Supp.

2d at 322 (quoting Shoemaker v. United States, 147 U.S. 282,

301 (1893)); accord Weiss v. United States, 510 U.S. 163,

171-75 (1994) (holding that second appointment in accordance

with Appointments Clause was not necessary for military

judges, who are "Officers" who must be appointed in

accordance with Appointments Clause of Constitution, where

they were commissioned officers who had already been



    5
          The Appointments Clause grants the President the power
to "nominate, and by and with the Advice and Consent of the
Senate, . . . appoint . . . Officers of the United States." U.S.
Const. art. II, § 2.

                              -23-
appointed by the President with advice and consent of the

Senate).   Here, the functions assigned to Lockhart by

Congress as Acting Director of FHFA were "germane" to the

functions he had previously served as Director of OFHEO, as

Congress essentially converted OFHEO into FHFA and

transferred OFHEO's functions to FHFA.    See 12 U.S.C.

§§ 4511 note, 4512(b)(5); UBS Americas, 858 F. Supp. 2d at

322; see also Lo Duca v. United States, 93 F.3d 1100, 1110

(2d Cir. 1996) ("Where Congress provides additional duties

that are 'germane' to an already existing position, the

Appointments Clause does not require a second

appointment.").    Indeed, the OFHEO Director already had the

power to place Fannie Mae and Freddie Mac into

conservatorship.    See Federal Housing Enterprises Financial

Safety and Soundness Act of 1992, §§ 1303(6), 1313(b)(4),

1367, 1369, Pub. L. No. 102-550, tit. XIII, 106 Stat. 3941.

Hence, Lockhart's appointment as Acting Director of FHFA did

not run afoul of the Appointments Clause.

           Second, after Lockhart resigned, DeMarco was

properly designated by the President as Acting Director of


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FHFA, as HERA provides that "[i]n the event of the death,

resignation, sickness, or absence of the Director, the

President shall designate [one of three enumerated Deputy

Directors] to serve as acting Director until the return of

the Director, or the appointment of a successor . . . ."    12

U.S.C. § 4512(f).   Because Lockhart was legally the

Director, the President was authorized to appoint Deputy

Director DeMarco as Acting Director upon Lockhart's

resignation.

          Accordingly, FHFA had standing to bring this

action.

                          CONCLUSION

          For the reasons set forth above, the order of the

district court denying UBS's motion to dismiss for

untimeliness and lack of standing is AFFIRMED.




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