Here's the latest in the "audacious" takings case brought by AIG against the federal government for the 2008 fed takeover. The heart of the complaint is that the acquisition of AIG was an unconstitutional exaction. The Court of Federal Claims rendered a verdict that was hailed as a groundbreaking victory, but which ultimately denied the only relief which the CFC can enter, a money judgment. An appeal to the Federal Circuit followed, naturally.
In Starr International Co., Inc. v. United States, No. 15-5103 (May 9, 2017) that court threw out the takings claim for lack of standing. The corporation had standing to assert the claim, not individual shareholders.
There's a lot to digest in the 38 page opinion, and the 32 page concurring opinion, and we will allow you to read them for yourself. The key portion of the majority opinion, in our view, starts on page 33, which addresses the plaintiff's claims for standing under the Fifth Amendment. Starr argued that "the Government has a duty not to violate the Fifth Amendment's Takings Clause because the Fifth Amendment creates a 'special relationship' between AIG's shareholders and the Government. Starr does not cite any support for its submission that the Fifth Amendment's Takings Clause creates a Government 'duty.'" Slip op. at 33. Even if it did create a duty, the duty would run to the corporation, and not the shareholders.
In the end, the Federal Circuit concluded "while we have no reason to doubt that Starr was affected by the Government’s acquisition of AIG equity, Starr has not established any ground for direct standing under either federal or Delaware law. The alleged injuries to Starr are merely incidental to injuries to AIG, and any remedy would go to AIG, not Starr." Slip op. at 35.
Judge Wallach's concurring opinion, focused on the CFC's Tucker Act jurisdiction and the plaintiff's Article III standing, concluded that the CFC both lacked jurisdiction, and that Starr did not have standing. As we noted above, a long concurring opinion if you'd like the details of why.
Is this the last of this litigation? Given the players, we kind of doubt it.
Starr International Co., Inc. v. United States, No. 15-5103 (Fed. Cir. May 9, 2017)
