Here's the latest on that that "audacious" case filed in the Court of Federal Claims by überlawyer David Boies on behalf of Starr International seeking $35 billion in just compensation for the federal takeover of AIG.
Last we checked in, the plaintiff had scored an order from the CFC to depose Fed Chair Ben Bernanke about his "personal involvement in
the Government's decision to bail out American International Group, Inc.
('AIG') in September 2008, and his knowledge of the specific
governmental actions taken to implement the bailout." Mr. Bernanke
didn't want to testify, claiming that as a "high-level government
official," the plaintiffs had to show that the information sought was
not merely relevant under the usual discovery rules, but essential to
the case, not not obtainable elsewhere.
In its order, the CFC held that the practice is "relatively routine" in the CFC which, after
all, is the court where "private citizens ... sue the federal government
for monetary redress." Order at 3. Mr. Bernanke should not be
surprised, as it "is unremarkable that high-level government officials
will play a role in the litigation."
Bernanke must've been really busy, because he sought a writ of mandamus from the Federal Circuit (appellate practice alert: remember that in federal courts, mandamus is for those situations to get immediate review of rulings for which there's no effective relief available via the normal appellate process). The Federal Circuit agreed with him, holding in this order that the AIG lawsuit was not one of those "extraordinary circumstances" which merit bothering high government officials with such dross as giving testimony in a civil lawsuit.
The court concluded that Bernanke's position as Fed chair, which he holds until next February, is the equivalent of a cabinet secretary. Making him sit for a deposition "creates all the risks of disrupting significant ongoing government activities identified in the courts of appeals decisions following [United States v.] Morgan[, 313 U.S. 409 (1941)]." Order at 8-9. Moreover, the plaintiff "proposes to inquire into the Federal Reserve’s deliberative processes or Chairman Bernanke’s mental processes." Id. When you do that, the Federal Circuit concluded, you have a high burden:
Starr asserts a takings claim based on the theory that AIG was coerced into accepting the terms of the bailout and a statutory violation based on the theory that the government did not have the authority to take an equity stake in AIG.
To support this theory, as best as we can make out [ooh, judicial snark!], Starr seeks to question Chairman Bernanke on the following issues, which pertain to the Federal Reserve’s deliberative processes and the Chairman’s mental state: (1) whether Chairman Bernanke and the Federal Reserve believed that the Federal Reserve had the authority to take an equity stake in AIG; (2) whether they believed that the Federal Reserve’s actions were within the Federal Reserve Bank’s “incidental powers” under the Federal Reserve Act and whether the interest rules were fixed with a view to accommodating business and commerce; (3) whether Chairman Bernanke or the Federal Reserve intended the terms of the bailout to be “punitive.” We do not agree that Starr has established extraordinary circumstances justifying the inquiry into the Chairman’s mental processes or the Federal Reserve’s deliberative processes.
On this record, Starr’s efforts to inquire into these issues have all the appearance, and vices, of a fishing expedition rather than an effort to establish legally material facts.
Order at 10.
Check back in February 2014, when Bernanke is scheduled to step down.
In re United States, No. 13-163 (Fed. Cir. Oct. 16, 2013)
