O’Melveny persuaded the United States Court of Appeals for the Fifth Circuit to affirm a district court ruling that prevented a class action status lawsuit against our client Fannie Mae. The plaintiffs alleged that Fannie Mae’s management of multifamily mortgage escrow accounts insured by the Federal Housing Administration over a 40-year period violated federal guidelines and breached fiduciary duties and unjustly enriched Fannie Mae. The Fifth Circuit affirmed the July 2009 decision by the U.S. District Court for the Eastern District of Texas to deny the plaintiff’s motion to certify a class of 4,000 mortgagors of property located in all 50 states and the District of Columbia, where the mortgages were insured under certain sections of the National Housing Act that required the mortgagors to make deposits in Reserve for Replacements and Residual Receipts Funds. If certified, the case would have been the largest mortgage class action in history. The plaintiffs sought up to US$7 billion in damages for mortgagors across the country.