In the United States Court of Federal Claims

No. 11-779C

(Filed: September 27, 2013)

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Motion to Certify Court Order for 

Interlocutory Review; 28 U.S.C. § 

1292(d)(2); Timeliness of Motion; 

Factors to be Considered; Whether a 

Novel and Controlling Issue is 

Presented; Whether a Fuller Record 

After Trial Would Aid Appellate 

Review; Whether an Immediate 

Appellate Review Would Materially 

Advance the Termination of the 

Litigation.

STARR INTERNATIONAL COMPANY, 

INC., on its behalf and on behalf of a class of 

others similarly situated,

*

*

*

*

*

 Plaintiff, *

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v. *

*

THE UNITED STATES, *

*

 Defendant. *

*

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David Boies, with whom were Robert J. Dwyer, Alanna C. Rutherford, Julia C. 

Hamilton, Hamish P. M. Hume, and Samuel C. Kaplan, Boies, Schiller & Flexner LLP, 

Armonk, New York, and John L. Gardiner, Skadden, Arps, Slate, Meagher & Flom LLP, 

New York, New York, for Plaintiff.

Brian A. Mizoguchi, Assistant Director, with whom were Joyce R. Branda, Deputy

Assistant Attorney General, Jeanne E. Davidson, Director, Scott D. Austin, Assistant 

Director, Timothy P. McIlmail, Senior Trial Counsel, Amanda L. Tantum, and Benjamin 

J. Zeitlin, Trial Attorneys, Commercial Litigation Branch, Civil Division, U.S. 

Department of Justice, Washington, D.C., for Defendant.

ORDER ON DEFENDANT’S MOTION TO CERTIFY THE

COURT’S JUNE 26, 2013 ORDER FOR INTERLOCUTORY REVIEW

WHEELER, Judge.

On August 16, 2013, Defendant filed a motion pursuant to 28 U.S.C. § 1292(d)(2) 

asking the Court to certify its June 26, 2013 Order for interlocutory review by the U.S. 

Court of Appeals for the Federal Circuit. Plaintiff’s complaint, as amended, alleges Fifth 

Amendment taking and illegal exaction claims relating to the Government’s bailout of 
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American International Group, Inc. (“AIG”) beginning in September 2008. Plaintiff Starr 

International Company, Inc. (“Starr”) and its class members were shareholders of AIG 

during relevant time periods in 2008 and 2009. Defendant requests the Court to certify 

the issue of whether Starr and its class members may assert direct shareholder claims 

against the United States under Delaware law and the United States Constitution, or 

whether the claims are exclusively derivative in nature. Def.’s Mot. 1. Defendant 

contends that this issue is a controlling question of law about which there is a substantial 

ground for difference of opinion, and that an immediate appeal from this Court’s June 26, 

2013 Order may materially advance the termination of the litigation. Id. at 3 (citing 28 

U.S.C. § 1292(d)(2)). On August 30, 2013, Starr filed an opposition to Defendant’s 

motion, and on September 6, 2013, Defendant filed a reply. The Court found the parties’ 

briefs thorough and informative, and did not request oral argument in this matter.

Courts have long held that “[i]nterlocutory appeals [under 28 U.S.C. § 1292] are 

reserved for exceptional or rare cases and should be authorized only with great care as to 

avoid unnecessary and piecemeal litigation.” Jaynes v. United States, 69 Fed. Cl. 450, 

460 (2006) (internal citations omitted); see also, Petro-Hunt, LLC v. United States, 91 

Fed. Cl. 447, 451 (2010); Klamath Irr. Dist. v. United States, 69 Fed. Cl. 160, 161 (2005). 

Emphasizing how infrequently interlocutory review should occur, the U.S. Supreme 

Court has observed that “[r]outine resort [to interlocutory appeals] would hardly comport 

with Congress’ design to reserve interlocutory review for ‘exceptional’ cases while 

generally retaining for the federal courts a firm final judgment rule.” Caterpillar Inc. v. 

Lewis, 519 U.S. 61, 74 (1996) (internal citations omitted). The decision whether to grant 

interlocutory review lies within “the sound discretion of the trial judge.” Petro-Hunt, 91 

Fed. Cl. at 452 (citing Arthur Young & Co. v. U.S. Dist. Ct., 549 F.2d 686, 697 (9th Cir. 

1977)). Once an order is certified for interlocutory appeal, “the Federal Circuit may, in 

its discretion, permit an appeal to be taken from such order.” 28 U.S.C. § 1292(d)(2).

A. Timeliness of Defendant’s Motion

In this case, the Court first must address whether Defendant’s August 16, 2013 

request for certification is timely. The Court ruled on the issue of whether Starr and its 

class members could assert direct shareholder claims more than 14 months ago, on July 2, 

2012. On that date, in a comprehensive 49-page opinion, the Court granted in part and 

denied in part Defendant’s motion to dismiss. Starr Int’l Co. v. United States, 106 Fed. 

Cl. 50 (2012). The Court provided a detailed analysis of whether Starr has standing to 

bring a direct shareholder claim, discussing at length the applicable Delaware law.1 Id. at 

61-65. Later, on September 17, 2012, the Court denied Defendant’s motion for 

reconsideration, noting that “[t]he Government has not asserted any ‘intervening change 

 

1 The leading Delaware cases on direct versus derivative shareholder claims are: Gatz v. Ponsoldt, 925 

A.2d 1265 (Del. 2007); Gentile v. Rosette, 906 A.2d 91 (Del. 2006); Tooley v. Donaldson, 845 A.2d 

1031 (Del. 2004); and In re Tri-Star Pictures, 634 A.2d 319 (Del. 1993). The Court addressed each of 

these cases in its July 2, 2012 opinion.
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of legal authority,’ nor has it demonstrated that the Court’s decision would work a 

‘manifest injustice.’” Starr Int’l Co. v. United States, 107 Fed. Cl. 374, 376 (2012) 

(citing Intergraph Corp. v. Intel Corp., 253 F.3d 695, 698 (Fed. Cir. 2001)). Defendant 

thus has had the Court’s unequivocal rulings on Plaintiff’s standing to bring direct 

shareholder claims for many months. Reasonable diligence would have demanded that 

Defendant file a motion to certify for interlocutory appeal, if that was its choice, long 

before now.

Earlier this year, in January 2013, AIG’s Board of Directors determined after 

careful analysis that AIG did not wish to pursue the shareholder derivative claims in this 

case. A controversy arose as to whether AIG should be dismissed as a nominal defendant

under Delaware’s business judgment rule, in deference to its Board’s reasoned decision. 

On March 22, 2013, the Court issued a briefing schedule for AIG’s and Defendant’s 

motions to dismiss Starr’s shareholder derivative claims. Dkt. No. 107. In response to 

Defendant’s stated intention also to challenge again the direct shareholder claims, the 

Court stated:

Although the Government may, for procedural reasons of 

preserving issues for appeal, assert that these amended direct 

claims should be dismissed, the Court will not entertain any 

arguments that have been previously rejected. The Court 

expects the issue of Starr’s derivative claims to predominate 

in any motion to dismiss.

Id. at 2. Defendant nevertheless raised the same direct shareholder arguments for a third 

time, and the Court addressed them in its June 26, 2013 order. The Court rejected 

Defendant’s position that any of the arguments were “new material facts” or that the 

Court should reconsider the two prior decisions denying the motions to dismiss the direct 

claims. Starr Int’l Co. v. United States, 111 Fed. Cl. 459, 480-82 (2013).

In circumstances where the Court has issued three rulings denying Defendant’s 

motions to dismiss the direct shareholder claims, and only the June 26, 2013 order could 

serve as a basis to seek timely interlocutory review, the question becomes whether 

anything of significance has changed since the first or second orders issued in 2012. See

FTC v. Minneapolis-Honeywell Regulator Co., 344 U.S. 206, 211-12 (1952) (“[T]he 

mere fact that a judgment previously entered has been reentered or revised in an 

immaterial way does not toll the time within which review must be sought. Only when 

the lower court changes matters of substance or resolves a genuine ambiguity, in a 

judgment previously rendered should the period within which an appeal must be taken or 

a petition for certiorari filed begin to run anew.”); Erb v. Alliance Capital Mgmt. L.P., 

423 F.3d 647, 650-51 (7th Cir. 2005) (“Unless the circumstances have changed 

significantly since the entry of the original order, we will deem the notice of an appeal 

from that order, even though it may designate a later order as the order being appealed.”).
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In this case, one new development from the June 26, 2013 order is that AIG no 

longer is a party, and the shareholder derivative claims have been dismissed. From 

Defendant’s standpoint, the entire focus of the case now is the direct shareholder claims,

and in some sense, those claims arguably are more “controlling” under 28 U.S.C. § 

1292(d)(2) than they were previously. Nonetheless, the resurrection of Defendant’s 

request for certification rests upon the assertion in 2013 of essentially the same 

arguments previously made in 2012, something the Court requested Defendant not to do 

in the March 22, 2013 scheduling order. The Court will not permit Defendant to 

resurrect an interlocutory appellate review of the July 2, 2012 order in this way, and 

therefore finds the August 16, 2013 motion for certification untimely.

B. Merits of Defendant’s Motion

Even in the absence of a timeliness problem, Defendant’s motion would not 

satisfy the criteria for interlocutory appeal under 28 U.S.C. § 1292(d)(2). As this Court 

explained in its July 2, 2012 decision on Defendant’s motion to dismiss, the Supreme 

Court of Delaware has established a test for whether a shareholder claim is derivative or 

direct. Starr Int’l, 106 Fed. Cl. at 62. According to the Delaware Court, the 

determination turns “solely on the following questions: (1) who suffered the alleged harm 

(the corporation or the suing stockholders, individually); and (2) who would receive the 

benefit of any recovery or other remedy (the corporation or the stockholders, 

individually)?” Tooley v. Donaldson, 845 A.2d 1031, 1033 (Del. 2004) (emphasis in 

original). In other words, “a court should look to the nature of the wrong and to whom 

the relief should go.” Id. at 1039. 

Starr has brought a “corporate overpayment” shareholder claim by asserting that 

the Government forced AIG to issue to the Government over 562 million shares of AIG 

common stock for insufficient consideration. Starr Int’l, 106 Fed. Cl. at 62. Depending 

upon the circumstances, such a claim under Delaware law can be derivative and direct 

where an action harms both the shareholders and the corporation. Gatz v. Ponsoldt, 925 

A.2d 1265, 1278 (Del. 2007); Gentile v. Rosette, 906 A.2d 91, 100 (Del. 2006). Public 

shareholders have a direct claim for the expropriation of their economic value and voting 

power where: “(1) a stockholder having majority or effective control causes the 

corporation to issue ‘excessive’ shares of its stock in exchange for assets of the 

controlling stockholder that have a lesser value; and (2) the exchange causes an increase 

in the percentage of the outstanding shares owned by the controlling stockholder, and a 

corresponding decrease in the share percentage owned by the public (minority) 

shareholders.” Rosette, 906 A.2d at 100.

The application of this test under Delaware law requires a factual inquiry, and 

does not present purely a question of law. The issue is not whether a direct shareholder 

claim can ever be brought under Delaware law, but whether under the facts of this case, 
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the Government caused the shareholders to suffer the alleged harm, and whether any 

damages awarded should go to the shareholders instead of the corporation. This question 

cannot be answered in a vacuum, but rather requires a full evidentiary record to 

determine whether the Government used its control of AIG to expropriate the economic 

and voting interests of the then-existing common stock shareholders. The question when 

properly understood actually is not a novel or unique issue for which interlocutory appeal

would be appropriate.

Adhering to the U.S. Supreme Court’s holding that interlocutory review should be 

reserved for “exceptional cases,” Caterpillar Inc., 519 U.S. at 74, it is useful to contrast 

this case with Nebraska Public Power District v. United States, 74 Fed. Cl. 762 (2006), 

where Judge Francis Allegra certified a truly novel issue for interlocutory review by the 

Federal Circuit. In Nebraska Power, a spent nuclear fuel case, Judge Allegra found that a

writ of mandamus issued by the U.S. Court of Appeals for the District of Columbia in 

Northern States Power Co. v. Dept. of Energy, 128 F.3d 754 (D.C. Cir. 1997) was void 

for want of jurisdiction, and he ordered the Government to brief its arguments regarding 

the “unavoidable delays” clause of the standard Department of Energy contract. 

Nebraska Power, 74 Fed. Cl. at 762-63. The plaintiff in Nebraska Power, seeing an 

unusual jurisdictional issue involving another court, asked Judge Allegra to certify the 

question for interlocutory review, and the Government did not oppose the plaintiff’s 

request. Id. at 763. The Federal Circuit accepted interlocutory review and on January 12, 

2010, issued its decision reversing and remanding Judge Allegra’s decision. Nebraska 

Public Power District v. United States, 590 F.3d 1357 (Fed. Cir. 2010).

Nebraska Power presented an issue much more suitable for interlocutory appeal 

than in this case, and the parties there agreed that review by the Federal Circuit should be 

requested. Here, conversely, the parties do not agree, with Starr advocating that the 

Court defer appellate review in the usual manner until a final judgment is entered. The 

Government argues that certifying the issue will conserve the limited resources of the 

judiciary and the parties by giving the Federal Circuit the opportunity to rule on a 

controlling question of law prior to trial. However, this argument ignores an important

countervailing consideration. Starr carries the burden of proof in this case, and a delay 

will make it more difficult for them to pursue their claims as time goes on and memories 

fade. 

At this stage in the litigation, it is doubtful that the Federal Circuit could perform 

an effective review of a Delaware causation rule without a factual record. The Court sees 

no likelihood that an interlocutory review would materially advance the termination of 

the litigation as prescribed in 28 U.S.C. § 1292(d)(2).

The Court also agrees with Plaintiff that, in Fifth Amendment taking claims, “the 

appellate court should address this case only with the benefit of a complete factual 

record.” Pl.’s Opp. 13. In taking claims generally, the Supreme Court has observed that 
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the outcome depends largely upon the particular circumstance of the case, and “this 

Court, quite simply, has been unable to develop any ‘set formula’ for determining when 

‘justice and fairness’ require that economic injuries caused by public action be 

compensated by the government, rather than remain disproportionately concentrated on a 

few persons.” Penn Central Transp. Co. v. City of New York, 438 U.S. 104, 123-24 

(1978) (citations omitted); see also, Loretto v. Teleprompter Manhattan CATV Corp., 

458 U.S. 419, 426 (1982) (courts “must engage in ‘essentially ad hoc, factual inquiries’” 

to determine whether a unique takings case has arisen) (citations omitted).

Finally, the test for Starr’s illegal exaction claim “is identical to the Takings test.”

Casa de Cambio Comdiv S.A. de C.V. v. United States, 291 F.3d 1356, 1364 (Fed. Cir. 

2002). Whether an illegal exaction has occurred is not a purely legal question, but would 

require this Court to apply a causation standard to the evidence presented at trial. An 

immediate appeal of the illegal exaction claim to the Federal Circuit without the 

underlying factual record would not serve any useful purpose, and would not materially 

advance the termination of the litigation under 28 U.S.C. § 1292(d)(2).

C. Conclusion

Based on the foregoing, the Court concludes that Defendant’s motion to certify the 

June 26, 2013 order for interlocutory review is untimely, and that the grounds for the 

motion do not satisfy the criteria in 28 U.S.C. § 1292(d)(2). Accordingly, Defendant’s 

motion is DENIED.

IT IS SO ORDERED.

s/ Thomas C. Wheeler

THOMAS C. WHEELER

Judge