Federal Housing Finance Agency et al v. Ansonia et al

Filing 32

ORDER. For the reasons set forth in the attached, the 18 motion for summary judgment is GRANTED. The Clerk is directed to close the case.Signed by Judge Michael P. Shea on 7/14/2021. (Silva, Madeline)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
FEDERAL HOUSING FINANCE AGENCY, on its
own behalf and in its capacity as Conservator for
Federal National Mortgage Association; FEDERAL
NATIONAL MORTGAGE ASSOCIATION,

No. 3:20-cv-01320 (MPS)

Plaintiffs,
v.
CITY OF ANSONIA; RONDA PORRINI, in her
official capacity as City Land Use Administrator;
DAVID BLACKWELL, SR., in his official capacity
as City Anti-Blight Officer; ARTHUR J. DAVIES,
in his official capacity as Connecticut State Marshal,
Defendants.
RULING ON MOTION FOR SUMMARY JUDGMENT
Plaintiffs Federal Housing Finance Agency (“FHFA”), on its own behalf and as
Conservator for the Federal National Mortgage Association (“Fannie Mae”), and Fannie Mae
bring this action for declaratory judgment, to quiet title, and for corresponding injunctive relief
against the City of Ansonia, Connecticut (the “City”); Ronda Porrini, in her official capacity as
City Land Use Administrator; David Blackwell, Sr., in his official capacity as City Anti-Blight
Officer; and Arthur J. Davies, in his official capacity as Connecticut State Marshal. ECF No. 1.
The plaintiffs have filed a motion for summary judgment. ECF No. 18. For the reasons set forth
below, I GRANT that motion.

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I.

BACKGROUND
The following facts are taken from the plaintiffs’ Local Rule 56(a) Statement or are

subject to judicial notice. 1 The parties agree that this case presents a purely legal issue and
neither party disputes any material fact in this case.
On September 6, 2008, FHFA placed Fannie Mae into a conservatorship and appointed
itself as conservator. The purpose of the conservatorship is “reorganizing, rehabilitating or
winding up [Fannie Mae’s] affairs.” 12 U.S.C. § 4617(a)(2). Fannie Mae remains in such
conservatorship today. ECF No. 18-2 ¶ 1.
On April 27, 2007, Kevin D. Parham recorded a Warranty Deed in the public records of
Ansonia, Connecticut, which transferred title in real property located at 66 Benz Street, Ansonia,
Connecticut 06401 (“Property”) to Mr. Parham. ECF No. 18-2 ¶ 2. An open-ended mortgage
deed listing Kevin D. Parham as the borrower (“Borrower”), American Brokers Conduit as the
lender (“Lender”), and Mortgage Electronic Registration Systems, Inc. (“MERS”), as beneficiary
solely as nominee for Lender and Lender’s successors and assigns, was executed on April 25,
2007, and recorded on April 27, 2007 (“Deed of Trust”). The Deed of Trust granted Lender a
security interest in the Property to secure the repayment of a loan in the original amount of
$208,000 to the Borrower. Id. ¶ 3. On October 17, 2011, MERS recorded an assignment of the
Deed of Trust to Wells Fargo Bank, N.A. (“Wells Fargo”). Id. ¶ 4. On June 3, 2019, Wells
Fargo recorded a Certificate of Foreclosure stating that on May 7, 2019, “title to [the Property]
became absolute in” Wells Fargo. Id. ¶ 5. Following Fannie Mae’s purchase of the Property at a
foreclosure sale, on May 31, 2019, Wells Fargo executed a Quit-Claim Deed that transferred title

The defendants did not file a Local Rule 56(a)2 statement. As a result, the facts set forth in the plaintiffs’ Local
Rule 56(a)1 statement are deemed admitted, D. Conn. L. Civ. R. 56(a)1, and form the basis for this section.

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in the Property to Fannie Mae. Id. ¶ 6. On June 10, 2019, a Fannie Mae authorized agent
recorded the Quit Claim Deed in the public records of the City of Ansonia. Id. ¶ 9.
On June 5, 2019, the City of Ansonia, acting through its Blight Enforcement Officer,
David Blackwell, Sr., executed a “Blight Lien and Certification of Continuing Lien” (“Blight
Lien”) against the Property, which the City of Ansonia recorded on June 6, 2019 in its public
records. Id. ¶ 7. The Blight Lien provides for a $100 per day charge for the first thirty days and
a $250 per day charge thereafter as of May 8, 2019 and until the blighted condition of the
Property is abated. Id. ¶ 8. On July 3, 2020, Connecticut State Marshal Arthur J. Davies sent an
Alias Warrant to Fannie Mae, through its authorized agent, seeking to collect an anti-blight fine
in the amount of $81,600, which reflects the total amount of the daily fees under the Blight Lien.
Including a 15% Marshal Fee, the total fine amounted to $93,840. Id. ¶ 10. The Alias Warrant
provides the following accounting for the anti-blight fine under the Blight Lien for a total fine of
$81,600: 2
•

05/08/2019 to 05/31/2019: $2,400

•

06/07/2019 to 06/30/2019: $6,000

•

07/01/2019 to 12/31/2019: $46,000

•

01/01/2020 to 04/13/2020: $26,000

Id. ¶ 11. The Alias Warrant states that the City of Ansonia had spent “$ 000” on “Remediation”
of the Property. Id. ¶ 12.

The itemized dollar figures add up to $80,400—not $81,600—indicating that the Alias Warrant incorporates a
computational error or some other omission. This discrepancy is not material to the issue presented by the summary
judgment motion.

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II.

LEGAL STANDARD
“Summary judgment is appropriate only if the movant shows that there is no genuine

issue as to any material fact and the movant is entitled to judgment as a matter of law.” Tolan v.
Cotton, 572 U.S. 650, 657-58 (2014) (internal quotation marks and citations omitted). In
reviewing the summary judgment record, a court must “construe the facts in the light most
favorable to the nonmoving party and must resolve all ambiguities and draw all reasonable
inferences against the movant.” Caronia v. Philip Morris USA, Inc., 715 F.3d 417, 427 (2d Cir.
2013). “A genuine dispute of material fact exists for summary judgment purposes where the
evidence, viewed in the light most favorable to the nonmoving party, is such that a reasonable
jury could decide in that party’s favor.” Zann Kwan v. Andalex Grp. LLC, 737 F.3d 834, 843 (2d
Cir. 2013). The moving party bears the burden of demonstrating that no genuine issue exists as
to any material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986). If the moving party
carries its burden, “the opposing party must come forward with specific evidence demonstrating
the existence of a genuine dispute of material fact.” Brown v. Eli Lilly & Co., 654 F.3d 347, 358
(2d Cir. 2011) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986)). As noted
above, neither side here contends that there is a genuine dispute of material fact.
III.

DISCUSSION
The only issue presented by this summary judgment motion is whether the Federal

Housing and Economic Recovery Act of 2008 (“HERA”), 12 U.S.C. § 4511 et seq., preempts the
City of Ansonia’s anti-blight penalties and liens, which are authorized by Connecticut statutes. 3

This Court has subject matter jurisdiction over this action because “the Supreme Court has consistently recognized
federal jurisdiction over declaratory- and injunctive-relief actions to prohibit the enforcement of state or municipal
orders alleged to violate federal law.” Friends of the E. Hampton Airport, Inc. v. Town of E. Hampton, 841 F.3d 133,
144 (2d Cir. 2016).

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See Conn. Gen. Stat. § 7-148(c)(7)(H)(xv) (authorizing municipalities to “[m]ake and enforce
regulations for the prevention and remediation of housing blight . . .”); id. § 7-148aa (authorizing
municipalities to record a lien on real estate for “any unpaid penalty imposed by a municipality
pursuant to the provisions of an ordinance regulating blight.”); Ansonia Code art. III, §§ 13-46 to
13-53.1 (“Anti-Blight Program”); id. § 13-50(a)-(b), (f) (authorizing specific penalties and liens
for violations of the Anti-Blight Program).
The plaintiffs have moved for summary judgment, arguing that the Connecticut laws
under which the defendants imposed monetary penalties on the plaintiffs and attached a lien on
the Property to secure payment conflict with, and thus are preempted by, the provisions of
HERA that protect FHFA from liens and penalties. ECF No. 18. The defendants respond by
arguing that (1) HERA does not expressly or impliedly preempt the City of Ansonia’s ability to
impose and enforce blight fees and blight liens; and (2) the federal pre-emption of local land-use
laws sought by the plaintiffs is contrary to congressional intent, public policy, and a plain
reading of HERA. ECF No. 26. For the reasons set forth below, I agree with the plaintiffs and
grant the motion for summary judgment.
A.

Federal Preemption.

“The Supremacy Clause unambiguously provides that if there is any conflict between
federal and state law, federal law shall prevail.” Gonzales v. Raich, 545 U.S. 1, 29 (2005). This
is so even if the federal statutory language does not explicitly manifest Congress’s preemptive
intent. See Altria Grp., Inc. v. Good, 555 U.S. 70, 76-77 (2008). “[C]onflict pre-emption exists
where compliance with both state and federal law is impossible, or where the state law stands as
an obstacle to the accomplishment and execution of the full purposes and objectives of

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Congress.” Oneok, Inc. v. Learjet, Inc., 575 U.S. 373, 377 (2015) (internal quotation marks
omitted).
In deference to the police powers of the states, courts often apply a presumption against
federal preemption. Cipollone v. Liggett Grp., Inc., 505 U.S. 504, 516 (1992) (“Consideration of
issues arising under the Supremacy Clause start[s] with the assumption that the historic police
powers of the States [are] not to be superseded by . . . Federal Act unless that [is] the clear and
manifest purpose of Congress.”) (emphasis added; internal citation and quotation marks omitted;
alterations in original); see also California v. ARC Am. Corp., 490 U.S. 93, 101 (1989)
(“[A]ppellees must overcome the presumption against finding pre-emption of state law in areas
traditionally regulated by the States.”). The presumption is “particularly strong where . . . a state
or locality seeks to exercise its police powers to protect the health and safety of its citizens.” U.S.
Smokeless Tobacco Mfg. Co. LLC v. City of New York, 708 F.3d 428, 432 (2d Cir. 2013). In this
case, for the reasons discussed below, I find that HERA demonstrates a clear and manifest intent
to preempt the anti-blight penalties and blight lien at issue. As a result, I need not decide
whether the presumption against preemption applies to state or municipal anti-blight programs.
B.

HERA’s Plain Language Preempts Ansonia’s Anti-Blight Penalties and Lien.

Two provisions of HERA make clear that Ansonia’s anti-blight laws are preempted to the
extent those laws purport to impose penalties on the plaintiffs and involuntary liens on the
Property. Under a subsection titled “Other Agency Exemptions”, which applies to FHFA where,
as here, FHFA “is acting as a conservator . . .”, 12 U.S.C. § 4617(j)(1), HERA provides as
follows:
(3) Property protection
No property of the Agency shall be subject to levy, attachment, garnishment, foreclosure,
or sale without the consent of the Agency, nor shall any involuntary lien attach to the
property of the Agency.
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(4) Penalties and fines
The Agency shall not be liable for any amounts in the nature of penalties or fines,
including those arising from the failure of any person to pay any real property, personal
property, probate, or recording tax or any recording or filing fees when due.
Id. §§ 4617(j)(3), (4) (emphasis added) (hereinafter “Involuntary Lien Bar” and “Penalty Bar”).
To be sure, neither provision expressly preempts state law. See Berezovsky v. Moniz, 869
F.3d 923, 930 (9th Cir. 2017) (“Congress did not use sufficiently definite language to brand §
4617(j)(3) as expressly preemptive, although it unquestionably knows how to do so.”). But both
provisions “unequivocally express[] Congress’s ‘clear and manifest’ intent to supersede any
contrary law . . .”, id. (emphasis added), including any state or municipal law, that purports to
attach an involuntary lien or impose penalties or fines on FHFA with respect to a property
protected by subsection 4617(j). See id. at 930-31 (finding that subsection 4617(j)(3) directly
conflicts with, and therefore preempts, Nevada’s superpriority lien law to the extent the lien law
“allows homeowners association foreclosures . . . to automatically extinguish the [FHFA’s]
property interest without the [FHFA’s] consent.”). That is so because—even assuming it is not
physically impossible to comply with Ansonia’s anti-blight program and 12 U.S.C. § 4617(j)—
Ansonia’s anti-blight penalties and liens stand as obstacles to “Congress’s clear and manifest
goal of protecting the [FHFA’s] assets in the face of multiple potential threats, . . .”, Berezovsky,
869 F.3d at 931, including threats arising from state or municipal anti-blight programs. See
Oneok, Inc., 575 U.S. at 377; Berezovsky, 869 F.3d at 930-31; see also In re Cty. of Orange, 262
F.3d 1014, 1022 (9th Cir. 2001) (holding that, as to an analogous penalty bar in the FDIC’s
authorizing statute, “[t]here is no question that [12 U.S.C. § 1825(b)(3)] exempts the FDIC from
penalties assessed after it becomes the receiver.”); id. at 1019-20 (noting that, as to an analogous
involuntary lien bar in the FDIC’s authorizing statute, “[12 U.S.C. § 1825(b)(2)’s] . . . plain

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meaning is that once the property belongs to the FDIC, that is, when the FDIC acts as receiver,
no liens shall attach.”). 4 As a result, HERA’s Involuntary Lien and Penalty Bars preempt
Ansonia’s anti-blight laws to the extent those laws purport to impose any involuntary lien or
penalty on a property protected by subsection 4617(j).
None of the defendants’ counterarguments compel a different conclusion. First, the
defendants point to a separate subsection of HERA, subsection 4617(a)(7), which provides that
“[w]hen acting as conservator or receiver, the Agency shall not be subject to the direction or
supervision of any other agency of the United States or any State in the exercise of the rights,
powers, and privileges of the Agency.” The defendants argue that because this subsection refers
only to states, not municipalities, HERA does not preempt the provisions of Ansonia’s antiblight program at issue in his case. ECF No. 27 at 5-6. But this argument is flawed for two
reasons: (1) the preemptive subsections of HERA relied on by Plaintiffs, 12 U.S.C. §§
4617(j)(3)-(4), are more specific than, and provide preemptive authority that is separate and
independent of, subsection 4617(a)(7), see Jordan v. Nationstar Mortg., LLC, 240 F. Supp. 3d
1114, 1121-22 (E.D. Wash. 2017) (observing that—in the context of evaluating the preemptive

Under a section titled “Other Exemptions”, the provisions of 12 U.S.C. § 1825 (applicable to the Federal Deposit
Insurance Corporation (“FDIC” or the “Corporation”)) that are analogous to those exemptions in HERA provide as
follows: “When acting as a receiver, the following provisions shall apply with respect to the Corporation:

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(1) The Corporation including its franchise, its capital, reserves, and surplus, and its income, shall be exempt from
all taxation imposed by any State, county, municipality, or local taxing authority, except that any real property of the
Corporation shall be subject to State, territorial, county, municipal, or local taxation to the same extent according to
its value as other real property is taxed, except that, notwithstanding the failure of any person to challenge an
assessment under State law of such property’s value, such value, and the tax thereon, shall be determined as of the
period for which such tax is imposed.
(2) No property of the Corporation shall be subject to levy, attachment, garnishment, foreclosure, or sale without the
consent of the Corporation, nor shall any involuntary lien attach to the property of the Corporation.
(3) The Corporation shall not be liable for any amounts in the nature of penalties or fines, including those arising
from the failure of any person to pay any real property, personal property, probate, or recording tax or any recording
or filing fees when due.” (emphasis added).

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effect of 12 U.S.C. § 4617(a)(7)—other courts have recognized that specific subsections of
HERA, including 12 U.S.C. § 4617(j)(3), do preempt certain state laws), and so the scope of
preemption under subsection 4617(a)(7) does not affect the preemption analysis under subsection
4617(j); and (2) as the plaintiffs point out and as discussed above, Ansonia’s authority for its
anti-blight program rests entirely on a state statute. Thus, HERA’s preemptive effect on the
underlying state statute—a point conceded by the defendants—is sufficient to grant judgment in
favor of the plaintiffs in this case.
The defendants also argue that HERA does not preempt municipal laws because
subsections 4617(j)(3) and (4) do not specifically mention municipalities. This argument, too, is
flawed. Both subsections 4617(j)(3) and (4) apply to “any” penalty and “any” involuntary lien,
regardless of its source. Courts have consistently construed that type of unambiguous language
to be as broad in meaning as its dictionary definition, that is, “any” applies without exception.
United States v. Altese, 542 F.2d 104, 106 (2d Cir. 1976) (“[The Act] in its entirety says in clear,
precise and unambiguous language—the use of the word ‘any’ that all enterprises . . . fall within
the interdiction of the Act.”) (footnote omitted); Allstate Ins. Co. v. Essiam, No. 3:15-CV-00180
(JCH), 2016 WL 8716202, at *3 (D. Conn. May 27, 2016) (“The word ‘any’ is not ambiguous.
According to Merriam-Webster, ‘any’ is defined as: ‘one or some indiscriminately of whatever
kind.’”). Furthermore, to the extent the defendants argue that the preemptive effect of HERA’s
Involuntary Lien and Penalty Bars deprives the municipality of its ability to protect the health
and safety of its citizens, and therefore cannot be enforced based on broader public policy
considerations, the plaintiffs point out that Ansonia has other tools that would allow it to achieve
those goals without violating HERA. See ECF No. 28 (“The Penalty Bar has no effect on the
City’s ability to recover any actual remediation expenses, as the Penalty Bar does not apply to

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compensatory awards.”). Thus, while HERA’s preemption of certain of the City’s punitive
enforcement provisions may deprive the City of some anti-blight tools as to properties held under
FHFA’s conservatorship, the City retains meaningful methods for protecting the health and
safety of its citizens, as well as the values of their homes, from the adverse effects of housing
blight.
IV.

CONCLUSION
For the reasons set forth above, I hereby GRANT the plaintiffs’ motion for summary

judgment (ECF No. 18) and enter the following orders:
1. 12 U.S.C. § 4617(j)(4) preempts Ansonia Code §§ 13-46 to 13-53.1 to the extent
that the municipal ordinance permits the assessment and collection of penalties
and fines on the plaintiffs;
2. All penalties and fines assessed against Fannie Mae in connection with the
Property at any time from May 31, 2019 5 to today, including all such amounts
enumerated in the Alias Warrant, regardless of whether tallied correctly in that
document, are void;
3. 12 U.S.C. § 4617(j)(3) preempts Ansonia Code §§ 13-46 to 13-53.1 to the extent
that municipal ordinance permits the attachment of an involuntary lien on the
Property; 6
4. The Blight Lien recorded against the Property is void; and

Plaintiffs do not challenge in this lawsuit the validity of the $2,400 in penalties that accrued against the Property
prior to May 31, 2019. As a result, this order does not, and should not be construed to, express any opinion as to the
penalties imposed as to the Property from May 8 to May 31, 2019.
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This order does not, and should not be construed to, express any opinion as to the enforceability of any lien that
attaches to a property before an entity operating under the conservatorship of FHFA takes title to such property.
Finally, Defendants have failed to raise any argument concerning the fact that the conveyance to Plaintiffs was not
recorded in the land records until after the lien was recorded in those records.
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5. The Clerk is directed to close this case.

IT IS SO ORDERED.

/s/
Michael P. Shea, U.S.D.J.
Dated:

Hartford, Connecticut
July 14, 2021

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