Friday, August 21, 2009
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Ninth Circuit Strikes Down Law on Armenian Insurance Claims
By KENNETH OFGANG, Staff Writer
A California law designed to aid the beneficiaries of Armenian Genocide victims in collecting on life insurance policies issued during that period interferes with the federal government’s authority over foreign policy and is unconstitutional, the Ninth U.S. Circuit Court of Appeals ruled yesterday.
The decision came the day after the same panel, with the same 2-1 split, struck down a similar law extending the time in which to make claims for the restitution of Nazi-plundered artworks.
Yesterday’s ruling involved SB 1915, enacted in 2000. It created Code of Civil Procedure Sec. 354.4, which extended to Dec. 31, 2010 the deadline for suing on life insurance policies issued to “any person of Armenian or other ancestry living in the Ottoman Empire during the period of 1915 to 1923, inclusive, who died, was deported, or escaped to avoid persecution during that period,” and expanded state court jurisdiction over such claims.
The law defines the Armenian Genocide as the period from 1915 to 1923, during which “many persons of Armenian ancestry residing in the historic Armenian homeland then situated in the Ottoman Empire were victims of massacre, torture, starvation, death marches, and exile.”
Vazken Movsesian filed a class action under the act in 2003, accusing three major European insurance companies of refusing to pay valid claims for which they were responsible. One of those companies, the German-based reinsurer Munich Re, moved to dismiss for failure to state a claim.
District Court Ruling
U.S. District Judge Christina Snyder of the Central District of California ruled that the class members had standing, and that the complaint stated causes of action for breach of contract and bad faith. She also ruled that the act neither deprived Munich Re on due process nor interfered with foreign affairs.
The Ninth Circuit allowed Munich Re to bring an interlocutory appeal, leading to yesterday’s ruling.
The law, Senior Judge David Thompson noted, was patterned after legislation extending the time in which to sue on Holocaust-era insurance claims and World War II slave labor claims. Both of those laws were found unconstitutional, the slave labor law by the Ninth Circuit in 2003 and the Holocaust law by this district’s Court of Appeal in 2005.
SB 1915, Thompson said, is contrary to an express presidential policy of giving no special recognition to the Armenian Genocide. Turkey, a strategic ally of the United States, strongly disputes claims that Turks were responsible for the deaths of 1.5 million Armenians and the taking of their land and possessions.
The Turkish government has called the 1.5 million figure “grossly erroneous” and has attributed the deaths of Armenians in that period to “intercommunal” political, rather than ethnic and religious, conflict.
Presidential Opposition
Thompson noted that both President Bill Clinton and President George W. Bush strongly opposed congressional resolutions that would have given official recognition to the genocide. In October 2000, for example, Clinton wrote to then-House Speaker Dennis Hastert, urging him not to allow a floor vote on such a resolution.
Such a vote, Clinton complained, would have negative effects on U.S. efforts to bring peace and stability to the Middle East and the Balkans, and to develop new energy sources, and “could undermine efforts to encourage improved relations between Armenia and Turkey—the very goal the Resolution’s sponsors seek to advance.”
Other officials in both the Clinton and Bush administrations, Thompson noted, decried legislative entry into the “sensitive” subject matter and urged Congress to leave the subject alone in order to foster “a productive dialogue on the these events” as “the best way for Turkey and Armenia to build a positive and productive relationship.”
Policy Preferences
Congressional adherence to the presidents’ wishes, the judge said, “lends the presidential policy additional authority.” By enacting legislation that expressly states that there was an Armenian Genocide, Thompson wrote, “California has defied the President’s foreign policy preferences.”
The judge elaborated:
“The federal government has made a conscious decision not to apply the politically charged label of ‘genocide’ to the deaths of these Armenians during World War I. Whether or not California agrees with this decision, it may not contradict it.”
Thompson rejected as irrelevant the district judge’s conclusion that a lack of expressed opposition by the U.S. and Turkish governments to legislation in many states recognizing the events of that period as genocide means that individual state laws on the subject do not contravene foreign policy. He also noted that there was no evidence in the record regarding the content of other states’ statutes, and said that any state involvement in foreign policy requires express federal authorization, not merely acquiescence.
Senior Judge Dorothy W. Nelson concurred, while Judge Harry Pregerson dissented.
Pregerson argued that the legislation dealt not with foreign policy, but with insurance, a traditional area of state regulation. “There is no express federal policy forbidding California from using the term ‘Armenian Genocide’ in the course of exercising its traditional authority to regulate the insurance industry,” the judge wrote.
The case is Movsesian v. Victoria Verscherung AG, 07-56722.
Copyright 2009, Metropolitan News Company