Casa Orlando Apts., Ltd. v. Fed'l Nat'l. Mortgage Assn., No. 09-40997 - - U.S. Fifth Circuit
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Casa Orlando Apts., Ltd. v. Fed'l Nat'l. Mortgage Assn., No. 09-40997

Class Action Against Fannie Mae

In Casa Orlando Apts., Ltd. v. Fed'l Nat'l. Mortgage Assn., No. 09-40997, an action by mortgagors whose mortgages for low-income multi-family housing were held or serviced by the Federal National Mortgage Association (Fannie Mae) and insured by the Department of Housing and Urban Development (HUD), for breach of fiduciary duty, the court affirmed the denial of class certification where 1) the District of Columbia could not have the most significant relationship to the issues unless the fiduciary relationship was created and maintained there, so D.C. law did not apply; 2) it would not be incompatible for Fannie Mae to disgorge profits earned from one fund while not disgorging profits earned from a different fund; and 3) various different state laws applied to the class members.

As the court wrote:  "This is an interlocutory appeal from the district court's refusal to certify
a class. Plaintiff Appellants are mortgagors whose mortgages for low-income multi-family housing were held or serviced by the Federal National Mortgage Association ("Fannie Mae") and insured by the Department of Housing and Urban Development ("HUD"). Plaintiffs sued Fannie Mae on behalf of themselves and those similarly situated for breach of fiduciary duty. The district court denied class certification under all three prongs of the Federal Rules of
Civil Procedure Rule 23(b). For the reasons stated below, we AFFIRM."

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