482 U. S. 182
June 8, 1987
Fannie Mae has a lesser known spinoff called Ginnie Mae. Rockford Life Insurance issued Ginnie Mae certificates as a part of its business. Rockford was required to make payments on Ginnie Mae securities, but the US government was responsible for guaranteeing their validity if an issuer such as Rockford failed to. Rockford argued that Ginnie Mae instruments should be exempt from federal taxation, under both the doctrine that government payments were generally exempt, and under a specific statute.
Unanimously, the Supreme Court ruled that Ginnie Mae certificates were not exempt from taxation. Stevens said that under the relevant statute, only government obligations which were certain could be exempt. Because the government would only be liable if Rockford failed to make payments, the Ginnie Mae securities were technically not classifiable as government obligations. Finding that the statute provided a sufficiently good overview of the more general government immunity doctrine, Stevens rejected the Constitutional argument for tax exemption as well.
I would have liked to have read a dissent. I don’t think it’s quite as cut and dried as Stevens makes it out to be. I don’t have too much else to say about this case – it was so boring that even the Court admitted in a footnote that they wouldn’t have even taken it except for being statutorily required to by some provision in the US Code.