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View Diary: Sen. Elizabeth Warren gives thumbs down to AIG's possible suing of taxpayers for bailing it out (125 comments)

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  •  Sovereign immunity (6+ / 0-)

    I'm not sure what theory they're proceeding on, though.  Their lawyers must have some basis for arguing that the federal government has waived its sovereign immunity with respect to these claims.

    "Ça c'est une chanson que j'aurais vraiment aimé ne pas avoir écrite." -- Barbara

    by FogCityJohn on Tue Jan 08, 2013 at 01:13:20 PM PST

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    •  Could it possibly be bill of attainder? -nt (0+ / 0-)
    •  All they need is a calculation that the (3+ / 0-)

      Government will seek to settle rather than fight. And given we've just seen the drug- and terrorist-money launderers get an easy-to-absorb fine, (same with fraud fraud fraud fraud and then fraud) ...

      they've got a good chance of getting some billions.


      The Internet is just the tail of the Corporate Media dog.

      by Jim P on Tue Jan 08, 2013 at 01:58:36 PM PST

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      •  Noted. Can we PLEASE fire Eric Holder now? (5+ / 0-)

        "When in doubt, do the brave thing." - Jan Smuts

        by bunnygirl60 on Tue Jan 08, 2013 at 02:29:40 PM PST

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      •  The gov't hands are not clean here (4+ / 0-)

        Wasn't AIG about to deny payout or at least give a 40% haircut on some swaps due to misrepresentation of the underlying deals, the value, the risk, and the collusion with the ratings agencies?  The fed moves in and orders AIG to payout 100 cents on the dolllar.
        The gov't will not want discovery and trial on this deal, although it would be enlightening for the rest of us.

        These capitalists generally act harmoniously and in concert to fleece the people, and now that they have got into a quarrel with themselves, we are called upon to appropriate the people's money to settle the quarrel. Abraham Lincoln

        by Nailbanger on Tue Jan 08, 2013 at 02:33:16 PM PST

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        •  One criticism of the AIG bailout was that it was (7+ / 0-)

          really a bail-out of Goldman-Sachs & other Wall St biggies who were on the other side of all the CDSwaps AIG had sold.  Although I think some bailout of AIG made sense given its size, it could've been structured so that GS et al. bore some of the cost since they were the ones who had made the bad bets by having AIG as a counterparty in a type of deal that they knew AIG really wasn't expert at.   Both GS et al. & AIG were being insanely reckless with these CDSWs, but only the AIG shareholders to some degree and the US taxpayer ended up with the losses.  

          Government of the what, for the what, and by the what?  

          P.S.  I've read a ton of books on the crash, but, if you haven't read it yet, "The Big Short" still wins by many lengths the race for best combination of entertainment & informativeness.  

    •  We've waived immunity for contract and tort (1+ / 0-)
      Recommended by:
      judyms9

      claims, and other assorted stuff, per statute.

      •  Yeah, but which statute? (0+ / 0-)

        The FTCA, as Loge suggests?  Or some other?  For the FTCA to work, I think you'd have to plead a cause of action that would be recognized under state law, but I'm certainly no expert on that.

        In any event, you have to find an explicit waiver, and I'm not sure what that would be.

        "Ça c'est une chanson que j'aurais vraiment aimé ne pas avoir écrite." -- Barbara

        by FogCityJohn on Tue Jan 08, 2013 at 05:50:25 PM PST

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    •  It's easy: Even though the company was bailed out (4+ / 0-)

      preventing a total collapse in which investors would have lost their entire stake, they feel that they are owed additional money from the tax payers based on money they think the might have gotten had the government bailed out AIG differently, the moon had turned blue, and all left-handed, red-headed baseball players had hit home runs on the same day. So there's THAT incontrovertible proof that Obama owes them whatever they demand.

      Case closed!

    •  FTCA? (0+ / 0-)

      Maybe sue Geithner personally under Bivens?

      Actually, if the defendant is the NY Fed, the suit is prosbly easier, jurisdictionally.

      Difficult, difficult, lemon difficult.

      by Loge on Tue Jan 08, 2013 at 03:09:36 PM PST

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      •  Is the Fed not covered by sovereign immunity? (0+ / 0-)

        I hadn't heard of that.

        "Ça c'est une chanson que j'aurais vraiment aimé ne pas avoir écrite." -- Barbara

        by FogCityJohn on Tue Jan 08, 2013 at 05:48:44 PM PST

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        •  found the answer: (1+ / 0-)
          Recommended by:
          FogCityJohn

          28 U.S.C. 1491:  there's jurisdiction in the court of federal claims, which is where the suit was brought.  Starr International Co. v. U.S., 1:11-cv-00779, U.S. Court of Federal Claims.  

          There was earlier litigation against the federal reserve bank of new york in district court by Greenberg.  He cited 12 U.S.C. § 341, which does seem to be determinative.  The FRBNY didn't assert immunity, but rather preemption of the common law claims, on the basis of being an instrumentality of the federal government.  My intuition was that since the FRBNY engages in open-market operations, it would have to be able to sue and be sued, but only in federal court.

          Difficult, difficult, lemon difficult.

          by Loge on Tue Jan 08, 2013 at 06:19:56 PM PST

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          •  That's the Tucker Act. (0+ / 0-)

            Thanks.

            So this must be a contract claim seeking nothing other than monetary damages from the U.S. government.  Those are the only kinds of suits the Court of Federal Claims can hear.

            "Ça c'est une chanson que j'aurais vraiment aimé ne pas avoir écrite." -- Barbara

            by FogCityJohn on Tue Jan 08, 2013 at 09:56:26 PM PST

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