We The People Foundation, has filed a lawsuit in United States District Court in Albany seeking to halt the execution of the emergency bailout of American International Group, Inc. (AIG) by the United States Government and the Federal Reserve.
The lawsuit asserts that the commitment of public funds and credit for the direct benefit of privately owned AIG is an ultra vires action by the United States Government and Federal Reserve, i.e., beyond the limited legal authority granted by the Constitution. The lawsuit asks for a "show cause" hearing demanding that the Government produce evidence of its legal authority to commit public funds for such a purpose, as well as emergency and permanent injunctions halting the bailout transaction.
Beyond the Constitutional deficiencies, the bailout establishes a dangerous precedent enabling the Fed and/or Government to nationalize virtually any business or property within the United States without legal authority or congressional approval.
(ultra vires means 'beyond powers')
The complaint is very simple, while the memorandum in support of the injunction is more detailed.
In asking for the injunction, WTP states that taxpayers are subject to irreparable harm if the government takes action while AIG has other alternatives (bankruptcy protection) if it cannot pay its bills. The suit is asking the government to prove it has the Constitutional authority to take the action contemplated.
Regardless of your position on the bailout, I think there are a lot of people who will be interested in how the federal government responds to the challenge of proving their authority for such action.