A ruling late Friday with U.S. District Judge Amy Jackson holding that Fannie Mae shareholders cannot sue the Department of Treasury in a derivative action may not be the blow to the shareholder case against Treasury that HousingWire first cast it as.

“The Court finds that this case does not present a conflict of interest sufficient to justify an exception to HERA's command that only Fannie Mae's Conservator may bring suit on Fannie Mae's behalf. Therefore, the Court will grant the Conservator's motion to substitute for plaintiff in this case,” she said in her ruling, which can be read here.

Investors Unite Executive Director and CapWealth Advisor CEO Tim Pagliara told HousingWire Monday that this ruling won’t affect their case.

"Friday’s ruling by Judge Jackson is irrelevant to the core claims in other shareholder lawsuits — namely, that Treasury violated HERA by wiping out shareholders with a net worth sweep,” Pagliara said. “Shareholders will prevail in court because Treasury exceeded its statutory authority by enacting the sweep.”

Investor/analyst blogger Todd Sullivan described a similar disconnect in how it was cast. 

“Plaintiffs in the Sweeney case sued Treasury, not FHFA and did not dispute the terms of the agreement or the agreement itself, they are suing because of a particular action (or lack thereof, the selling of the LIHTC’s) under the agreement,” he writes. “Fairholme is suing both Treasury and FHFA, they are contesting the legality of enacting the 3rd amendment as well as its terms. All three of these are absent from the case above. The judge ruled that since plaintiffs in Sweeney did not object to the SPSA or formally its terms, the validity of their claims rests upon the terms of that agreement, so, rightfully, they lost.”

Sullivan points out, rightly, that since Fairholme and others are contesting all of the above, there the decision isn’t really linked to the shareholder case.

Fairholme Funds is one of several hedge funds with GSE holdings.

“To be sure I fully expect Treasury/FHFA to use this and go to Judge Sweeney with a motion to halt discovery and simply rule in their favor. But I also fully expect them to lose that,” Sullivan writes. “They will do what they have done from day one in this case, cherry pick a line or two from the ruling and omit its context to attempt to sway Sweeney. Plaintiff’s lawyers will point this out and Sweeney will rule in favor of them again as she has done throughout this process to date.”

Consumer advocate Ralph Nader, CapWealth Advisor CEO Tim Pagliara, investor Carl Icahn, and nearly 1,000 GSE shareholders from 48 states and the District of Columbia have joined together in this campaign under the banner Investors Unite.