Fed Cir Rules Bernanke Doesn't Have to Testify in AIG Case
Sequester, debt-ceilings, defaults and bailouts. When will it end? Since 2008, the markets have been in a constant state of doubt and upheaval, and because of the delays of litigation, we're still hearing about 2008 bailouts now.
Earlier this summer, the U.S. Court of Federal Claims ruled that Ben Bernanke could be deposed about his involvement in his decision to bailout AIG in 2008. The government swiftly filed a petition for writ of mandamus, which the Federal Circuit granted.
Maurice "Hank" Greenberg lead AIG for four decades, and not coincidentally, his company Starr International, Co. had a 12% stake in AIG, making it AIG's largest shareholder. As a result of the 2008 bailout, Starr initiated action against the U.S. government pursuant to 28 U.S.C. § 1491 and the U.S. Constitutions Fifth Amendment Takings Clause.
Court of Federal Claims
Starr sought to depose Federal Reserve Chairman Ben Bernanke (
as if he doesn't have enough on his plate) to find out more about the AIG bailout events and decision-making process. Because of Bernanke's role in the decision, the court of federal claims stated "it is 'improbable that Plaintiff would be able to obtain the same testimony or evidence from other persons or sources,'" and held that Starr may depose Chairman Bernanke.
The Government petitioned for a writ of mandamus stating, "The demands of civil litigation, if not appropriately limited by the courts, will impair the ability of senior government officials to lead the departments and agencies for which they are responsible," according to Reuters.
The Federal Circuit, agreeing with the Government, stated: "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." The court granted the petition, and ordered that Chairman Bernanke may not be deposed until after he steps down from his role on February 1, 2014.
This is far from over though. David Boies, Starr International's lawyer, left no doubt of that, stating:
Based on Chairman Bernanke's documents and public statements, and on the sworn testimony of other government officials who have already been deposed, we are confident that we can make the showing of the importance of this testimony that the court requires,
reports Bloomberg. We'll have to wait until next year to see how this saga continues to play out.
- Whistle-Blower Lawsuit Alleges Fraud in AIG Bailout (FindLaw's In House Blog)
- Lost Homeowners' Association Fees Are Not a Compensable Taking (FindLaw's U.S. Fifth Circuit Blog)
- Dismissal of Takings Clause Claim Ordered (FindLaw's U.S. First Circuit Blog)