In a case with Hank Greenberg's Starr corporation as the plaintiff, and with David Boies as the plaintiff's attorney, a Federal District Court entered its Judgment dismissing Starr's "claims against the Federal Reserve Bank of New York ('FBNY') for breach of fiduciary duty in its rescue of American International Group, Inc. ('AIG') during the fall 2008 financial crisis." Starr International Co. v. Federal Reserve Bank of N.Y., 742 F.3d 37, 38 (2d Cir. 2014).
On appeal, the Federal Second Circuit Court of Appeals affirmed the District Court's Judgment of dismissal on the ground that Delaware's law of fiduciary duties, which in other circumstances would govern the FBNY's conduct, was preempted by Federal law in this case. Starr International Co. v. Federal Reserve Bank of N.Y., 742 F.3d 37, 41-42 (2d Cir. 2014).
Not even a highly publicized lawyer and a famous client in this case could overcome the presumption of preemption, or to put it another way, the cloak of immunity which has been protecting financial decision-makers since at least 2008.
© 2014 by Dennis J. Wall. All rights reserved. No claim to original U.S. Government works.
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