In its January 7, 2013 opinion, the US District Court for the Southern District of New York ruled in In re American International Group, Inc. Securities Litigation that the New York State Attorney General (NYAG) lacked standing under the Class Action Fairness Act of 2005 (CAFA) and traditional standing principles to object to the settlement reached in the case and approved by the court, and denied the NYAG leave to intervene.

The complaint in this securities class action was filed in October 2004, months before CAFA was passed by Congress. In January 2011, the parties sought the court's preliminary approval of a settlement, which the court granted in early 2012.

On August 17, 2012, the NYAG, who is not a party to the securities class action but is pursuing a separate suit in state court against the defendants, objected to the settlement because it did not take into account an alleged fraudulent transaction which is, in large part, the basis of the state court suit.

The NYAG claimed it had standing under both CAFA and traditional standing grounds, arguing in part that it should be permitted to object to the settlement because the settlement, if approved, would interfere with the NYAG's pending state action against the defendants. In the alternative, the NYAG requested permission to intervene under Federal Rule of Civil Procedure (FRCP) 24.

The court held that CAFA, which was enacted after the securities class action began, did not have retroactive effect. The court also found that, even if CAFA was in effect as of the commencement of the case, CAFA does not create new standing authority that would give the NYAG standing to object to the class settlement. The court also rejected the NYAG's claim of independent standing, finding that the NYAG's concern that the settlement might frustrate its ability to prosecute its state case against the defendants did not demonstrate sufficient interest in the federal action for standing purposes.

The court also denied the NYAG's request to intervene, noting that FRCP 24(b)(3) gives the court discretion to determine "whether the intervention will unduly delay or prejudice the adjudication of the original parties' rights." The court found that it was in the interest of the settlement class to have the matter resolved, and that there was no justification for the delay that intervention by the NYAG would cause.