6th Circuit rejects Establishment Clause challenge to AIG bailout on standing grounds

Howard Friedman, Religion Clause

In Murray v. U.S. Department of Treasury, (6th Cir., June 1, 2012), the U.S. 6th Circuit Court of Appeals dismissed on standing grounds an Establishment Clause challenge to the federal government’s 2008 bailout of American International Group, Inc. (AIG). Plaintiff complained that federal dollars were committed to a company whose subsidiaries market and sell Sharia-compliant financial products. The district court dismissed on the merits, finding that the government had a secular purpose and did not become excessively entangled in religion. (See prior posting.) The 6th Circuit affirmed the dismissal but instead relied on plaintiff’s lack of standing, finding that the challenged spending resulted from executive branch decisions, not a specific Congressional mandate.