U.S. Court of Appeals for the Second Circuit
State Fiduciary Duty Law — Financial Bailout
Starr International Co., Inc. v. Federal Reserve Bank of New York
Judges Walker, Livingston and Chin
Background: The plaintiff appealed from a judgment dismissing its claims against the Federal Reserve Bank for breach of fiduciary duty in its rescue of American International Group during the fall 2008 financial crisis.
Ruling: The Second Circuit affirmed. The court found no error in dismissing on the grounds that the uniquely federal interests at stake in stabilizing the national economy, state fiduciary duty law did not apply to the rescue activities in the case and was preempted.
David Boies of Boies, Schiller & Flexner for the plaintiff-appellant; John S. Kiernan of Debevoise & Plimpton for the defendant-appellee; Joseph S. Allerhand of Weil, Gotshal & Manges for the nominal defendant-appellee