Mr. Nielson said the logic of the parties’ position would undermine much of the federal government.
“The Social Security Administration, the Office of Special Counsel, the Federal Reserve, the Civil Service, will all be subject to constitutional attack,” he said, “and that’s just the beginning.”
Justice Elena Kagan elaborated on that point in an exchange with David H. Thompson, a lawyer for the shareholders. The Social Security Administration, she said, “has been led by a single commissioner since 1994 and, ever since then, it’s rendered 650,000 decisions every year, so that’s about 17 million decisions.”
“Are we really going to void all of those decisions?” she asked.
Mr. Thompson replied that the agency’s actions, unless subject to the statute of limitations, “should be void.”
He said the actions of the housing agency had crossed a line. “The companies have been nationalized,” he said.
Chief Justice John G. Roberts Jr. questioned the assertion. Government aid during the housing crisis “was a lifeline thrown to your clients,” he said, adding that he had done some recent financial research.
“I checked this morning,” the chief justice said, “and Fannie Mae was trading at $2.69 and Freddie Mac at $2.56 and your shares are not worthless.”
Hashim M. Mooppan, a lawyer for the federal government, said the housing agency, acting as a conservator, had been entitled to restructure their financial obligations. “That is what conservators do day in and day out,” he said.