The United States Court of Appeals for the Federal Circuit might have to bone up on the constitutional meaning of “chutzpah.” Ben Bernanke, in his new memoir, says that the $25 billion lawsuit filed against the United States over the Federal Reserve’s seizure of AIG was “remarkable demonstration of chutzpah.” The classic example of that Yiddish word is the boy who, after murdering his parents, begs for mercy because he’s an orphan.

Mr. Bernanke uses the word to belittle AIG’s erstwhile chairman, Maurice “Hank” Greenberg, for suing the government over its $85 billion bailout of AIG. What about Mr. Bernanke’s chutzpah? How could he neglect to mention that a federal court concluded that the Fed, when Mr. Bernanke was running it, broke statutory law when it seized AIG? And violated the takings clause of the Constitution by seizing Mr. Greenberg’s property without due process of law and just compensation.

No other Fed chairman has been found in court to have violated the Fifth Amendment, which is our bedrock protection of property rights. One would think that Mr. Bernanke would have dealt with that inconvenient fact in a book titled “The Courage To Act.” When Stephen Colbert ribbed Mr. Bernanke about the self-serving nature of the title, the ex-chairman of the Fed turned around and blamed his own wife, saying the title was “entirely her idea.”

The constitutional question of chutzpah is going to play out in a more serious venue. The United States Court of Appeals for the Federal Circuit will be hearing appeals from both sides in a dispute in which the integrity of the Fed is at stake. That’s because judge who tried the case, Thomas Wheeler, delivered a mixed opinion. He found that the Fed violated both statutory law and the Constitution when it seized AIG without authority — “due process of law” — or “just compensation.”

Yet he also found that with AIG effectively bankrupt, the Fed had seized something of no value. Hence, no damages. Were such a finding to stand, it would suggest that the government can violate the law and the Fifth Amendment without consequences. That, at least, is the contention made in an appeal brief filed by Starr International Company, the AIG shareholder through which Mr. Greenberg is acting. Do we really want our courts green-lighting constitutional violations?

Starr argues that the government, after concluding it could lend money to AIG to keep it afloat, changed the terms of its loan to AIG after it took control of the company on September 16, 2008. The Fed eventually seized 79.9% of the company. Starr contends the Fed wasn’t authorized to do that, “let alone for the purpose of punishing shareholders.” Mr. Bernanke’s own book concedes that he tried to view the situation analytically but eventually acted in fits of rage. “I seethed,” he writes, adding that he “slammed” the phone down “more than a few times on discussing AIG.”

What about due process? The government, Starr asserts, “never held a hearing, undertook an investigation, or made any findings concerning whether punishing AIG shareholders was appropriate.” The administration argues that the central bank had the power to act under the Federal Reserve Act’s section 13 (3), which gives the Fed authority to lend in “unusual and exigent circumstances.” Nowhere in the Act, though, does — or could — Congress grant any authority to ignore the Fifth Amendment.

So how did Mr. Bernanke get so far ahead of his skis? The Fed chairman, who has made so much of the bank’s independence, writes of a meeting he and the treasury secretary, Hank Paulson, had, in the thick of the crisis, with President George W. Bush. The president told them to, as Bernanke put it, “do what was necessary, and that he would do what he could to provide political cover.” The Fed chairman and treasury secretary raced then to Capitol Hill to confer with the congressional gedoylim.

Congressman Barney Frank, Mr. Bernanke relates, “wanted to know where the Fed was going to get the $85 billion” for AIG. “I didn’t think this was the time to explain the mechanics of creating bank reserves,” condescends Mr. Bernanke. Instead, he told Congressman Frank, his constitutional superior, “We have $ 800 billion.” He writes that he was referring to the pre-crisis size of the Fed’s balance sheet. “Barney looked stunned,” Mr. Bernanke writes.

The minutes of the Federal Open Market Committee meeting that same morning shows that Mr. Bernanke said he would ask later for authorization of swap lines with foreign banks. “I prefer not to put a limit on it,” the minutes record Mr. Bernanke as telling his committee colleagues, “so I know I’ve got my own bazooka here.” The minutes also show that the remark was greeted with laughter, although the exchange managed to get left out of “Courage to Act.”

Welcome to the age of fiat money, where the dollar is untethered from gold and silver and left without a definition in law. It’s an age in which the Federal Reserve can declare a company bankrupt without a hearing, lend it money created on computers, seize it amid laughter at the Open Market Committee, and sell it for billions in profits. And its chairman can write a book about it calling the lawsuit for constitutional due process and just compensation an act of chutzpah.