Metropolitan News-Enterprise


Monday, December 13, 2010


Page 1


Court Revives Claims Against Insurers Over Armenian Genocide


By STEVEN M. ELLIS, Staff Writer


A divided Ninth U.S. Circuit Court of Appeals panel on Friday reversed its decision that federal law preempts a state statute extending the limitations period for claims under life insurance policies issued to victims of the Armenian Genocide.

The three-judge panel held that the state law was not in conflict with federal law because there was no clearly-established, express federal policy forbidding states from referring to the event.

The panel, in a 2009 ruling by Judge David R. Thompson, threw out a class action by plaintiffs of Armenian descent who sued Germany’s Victoria Insurance Company and others over the alleged wrongful withholding of benefits from policies issued to victims of genocide at the hands of Turks from 1915 to 1923 as the Ottoman Empire collapsed.

Prior Ruling

Judge Dorothy W. Nelson joined Thompson in that opinion, which found preemption due to a conflict between Code of Civil Procedure Sec. 354.4 and an Executive Branch foreign policy preference declining to provide official recognition to the Armenian Genocide. Enacted in 2000 and modeled on a law passed to benefit Holocaust victims and World War II slave laborers, the state law extended until the end of this year the statute of limitations for claims arising from insurance policies issued to “Armenian Genocide victim[s].”

But on rehearing, Nelson cast her vote with Judge Harry Pregerson, who had earlier dissented that no express federal policy prevented the state from using the term.

Communications ‘Counterbalanced’

Now writing for the majority, Pregerson wrote that three informal presidential communications in the last 10 years rejecting congressional resolutions recognizing the Armenian Genocide were “counterbalanced, if not outweighed, by various statements from the federal executive and legislative branches in favor of such recognition.”

The plaintiffs sued alleging unjust enrichment, constructive trust and breaches of contract and the covenant of fair dealing. U.S. District Judge Christina A. Snyder of the Central District of California granted the defense’s motion to dismiss the former claims, but declined to dismiss the breach claims.

Snyder also held that that the class members had standing and that the named defendants were the proper defendants, and she rejected the defense’s argument that Sec. 354.4 was unconstitutional on the grounds that it violated due process and was preempted under the foreign affairs doctrine.

The Ninth Circuit originally reversed Snyder’s latter decision, but Pregerson noted Friday that the Executive Branch had used terms “virtually indistinguishable” to Armenian Genocide on a number of other occasions.

He said the state’s effort to regulate the insurance industry was “well within the realm of its traditional interests.” He also pointed out that the federal government has never expressed any opposition to the recognition of the Armenian Genocide by approximately 40 of the states.

The judge rejected the defendants’ claims that two acts resolving World War I-related claims between the United States and Germany preempted Sec. 354.4, reasoning that neither the Claims Agreement nor the War Claims Act had any application to policies issued to citizens of the Ottoman Empire. He further opined that nothing in the state law operated to limit the class of proper defendants or to limit standing to any particular group.

Dissenting Opinion

Thompson dissented, writing that he still believed the Executive Branch’s recent rejections of Congressional resolutions relating to the genocide demonstrated an express federal policy, meaning that the state statute was preempted for conflicting with federal policy and because it dealt in a field—foreign policy—expressly reserved to the federal government.

Brian S. Kabateck of Kabateck Brown Kellner represented the plaintiffs on appeal, while Neil Michael Soltman of Mayer Brown represented the defendants.

The case is Movsesian v. Victoria Versicherung AG, 07-56722.


Copyright 2010, Metropolitan News Company