July 18, 2012

Fannie Mae immune from punitive damages (for now)

The Federal National Mortgage Association, better known as Fannie Mae, cannot be liable for punitive damages so long as it remains under the conservatorship of the Federal Housing Finance Agency.  So says an order issued by U.S. District Judge Rosemary Collyer of the U.S. District Court for the District of Columbia.  (Herron v. Fannie Mae, no. 1:10-CV-00943-RMC.)  
That's consistent with the general rule that instrumentalities of the federal government are not subject to punitive damages.  (See, e.g., Woodland Production Credit Assn. v. Nicholas (1988) 201 Cal.App.3d 123, 129 ["[n]either the federal government nor its instrumentalities may be held liable for punitive damages unless there is an express statutory authorization for such an award"].)

Hat tip: The Blog of LegalTimes