Thursday, April 1, 2004
C.A. Rules WWII Forced Labor Compensation Law Unconstitutional
By a MetNews Staff Writer
A California statute giving World War II forced labor victims the right to sue companies which benefited from their work is unconstitutional, this district’s Court of Appeal has ruled.
Writing for Div. Eight, Justice Paul Boland noted Tuesday that the court found the law constitutional just over a year ago. The state Supreme Court ordered that ruling reconsidered in light of the U.S. Supreme Court’s decision in American Insurance Association v. Garamendi (2003) 539 U.S. 396.
In Garamendi, the high court ruled 5-4 that the state’s Holocaust Victim Insurance Relief Act, which required insurers doing business in California to disclose details of insurance policies issued to persons in Europe between 1920 and 1945, conflicted with the authority of the president to conduct foreign affairs. An aggressive policy of seeking redress from insurers embodied in the HVIRA was at odds with the thinking behind executive agreements negotiated with the leaders of Germany and Austria, the Garamendi majority declared.
Boland said the court was bound by what he called the “‘conflict’ theory of foreign affairs preemption” adopted in Garamendi. Under that theory, the provisions of Code of Civil Procedure Sec. 354.6 permitting suits against companies linked to use of slave labor to benefit the Nazi or Japanese war efforts could not stand, he reasoned, since they conflicted with the policies underlying the 1951 treaty which concluded the war with Japan.
The court ordered the suit filed by Jae Won Jeong, a U.S. citizen who claims that as a Korean national during the war he was forced to work in a labor camp in Korea operated by a Japanese cement company, to be dismissed.
Since Korea was not at war with Japan, but was under Japanese control, at the time of the events for which Jeong sought remuneration, a provision of the treaty expressly waiving claims against Japan and its nationals did not apply to him, Boland said. The view adopted by the Court of Appeal in its earlier ruling was similar to that expressed by Justice Ruth Bader Ginsburg in her opinion for the four dissenters in Garamendi, Boland declared.
Though the treaty did not expressly control claims by Korean nationals, it embodies a “federal purpose and foreign policy that WWII claims by individuals of non-signatory nations were to be resolved through diplomacy,” Boland said.
Since the policy was expressed in a ratified treaty, not just in executive agreements, the case for preemption was even stronger than in Garamendi, Boland wrote.
“In our original opinion, we concluded section 354.6 did not create a new cause of action but was a proper procedural statute intended to retroactively extend the applicable statute of limitations for pre-existing WWII slave and forced labor claims,” Boland declared. “At least two appellate courts have, in contrast, determined section 354.6 is not procedural, but creates new claims that otherwise would not exist….But whether viewed as procedural or substantive, it is inescapable that section 354.6 is a special rule authorizing WWII slave and forced labor victims to sue and recover damages in California courts as a result of their enslavement during the war, a rule that conflicts with the 1951 Treaty’s expression of federal policy that such war-related claims should be resolved diplomatically.”
Boland noted that Jeong’s lawyers, who included Barry Fisher of Fleishman & Fisher in Century City, sought to distinguish Garamendi on the basis that there was no ongoing federal effort to secure compensation for labor camp victims analogous to the efforts involved in the presidential negotiations over policies issued by European insurers.
“Jeong misreads Garamendi and the 1951 Treaty,” the justice explained. “The executive agreements in Garamendi did not necessarily provide compensation to Holocaust victims. Indeed, as the dissent pointed out, the voluntary system encouraged by the President had yielded settlement of ‘only a tiny proportion of the claims,’ and the insurers’ disclosure of policy information had not been ‘significant.’”
Justice Laurence D. Rubin joined in Boland’s opinion, but authored a separate concurrence to “note the consequences of applying implied preemption in this setting.”
“Given the lack of express preemption in an area traditionally reserved for the states, the doctrine of implied preemption should be used sparingly. This is especially so since the federal government may easily negate state power by simply stating its intent to do so in the applicable legislation, agreement or treaty. Under these circumstances, Justice Ginsberg’s words in her dissent in Garamendi are particularly convincing: ‘Although the federal approach differs from California’s, no executive agreement or other formal expression of foreign policy disapproves state disclosure laws like the HVIRA. Absent a clear statement aimed at disclosure requirements by the ‘one voice’ to which courts properly defer in matters of foreign affairs, I would leave intact California’s enactment.’….I agree with the majority that, since Justice Ginsberg’s words are found in her dissent, we must vacate the trial court’s order under Garamendi’s compulsion.
Fisher noted that he was contacted yesterday by a Daily Journal reporter who told him the Court of Appeal had decided the case in Jeong’s favor. That error resulted, Fisher said, from an erroneous posting of the prior decision on the court Web site.
Relying on that information and on a front-page story in the Journal reporting on Jeong’s victory, Fisher said, he sent out numerous emails announcing the good news.
Now, the attorney said, he and his colleagues—the Court of Appeal decision lists over 60 attorneys or firms who participated in the case in one way or another—must instead ponder whether to try to convince either the state U.S. Supreme Court that Jeong’s case is distinguishable from Garamendi.
That decision has yet to be made, Fisher said. But he asserted that the statute involved does nothing more than extend the statute of limitations for “garden variety” claims for remuneration which would affect only a tiny number of surviving camp laborers and should not have become enmeshed in issues of foreign policy.
The case is Taiheiyo Cement Corporation v. Superior Court (Jeong), 04 S.O.S. 1656.
Copyright 2004, Metropolitan News Company