COURT STRIKES DOWN LAW ALLOWING ARMENIAN AMERICANS TO SEEK LIFE INSURANCE OF VICTIMS OF OTTOMAN EMPIRE
Jesse A Hamilton

BestWire
August 25, 2009 Tuesday 04:42 PM EST

California had cleared the way for Armenian Americans to collect on
life insurance policies purchased by "Armenian genocide victims" in
Ottoman Empire violence in the early 1900s. But the U.S. 9th Circuit
Court of Appeals has decided the law is preempted by U.S. policy that
doesn’t recognize the mass killings from 1915 to 1918 as genocide.

The opinion reversed earlier legislative and court approvals that
would have granted the American descendants standing to sue foreign
companies — in particular, three German corporations listed as
defendants: Victoria Versicherung, Ergo Versicherungsgruppe and
parent company Munich Re. The judges were primarily concerned with
whether California’s law encroaches on U.S. foreign-policy issues. "We
conclude that it does, and accordingly, we hold that the California
statute is preempted," read the 2-1 opinion.

"We’re very pleased with the opinion," said Neil Soltman, the attorney
for the defendant companies. "We think it is consistent with an
increasingly long line of cases out of the Supreme Court and the 9th
Circuit which have held that states may not use legislation to weigh
in on questions relating to foreign affairs." He also said he’d never
seen copies of policies demonstrating the plaintiffs insurance claims.

The California legislature had provided formal recognition that the
Armenians killed during that period were victims of genocide, writing
in its legislative findings: "During the period from 1915 to 1923,
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." But the federal
government has not declared it a genocide. Congressional attempts
seeking recognition have been blocked by more than one White House,
citing foreign-relations reasons. Present-day Turkey, national heir
to what was the Ottoman Empire, strongly opposes such a distinction.

There were other elements in the legal case, but the foreign-relations
question was decided first. The majority judges, Dorothy W. Nelson and
David R. Thompson, decided the California law "impermissibly impairs
the president’s ability to speak with one voice for the nation in
the realm of foreign affairs, and undermines his diplomatic authority."

"I thought the opinion was outrageous," said Brian Kabateck, an
attorney representing the Armenian American plaintiffs in the case. "I
thought the two judges in the majority not only got it wrong but got
it way wrong — incredibly wrong."

The court had relied on 2003 Supreme Court ruling that had tossed out
a state law for insurance recoveries in World War II-era Holocaust
cases. "They perverted it by saying that it applied to the Armenian
genocide," Kabateck said.

The dissenting judge, Harry Pregerson, wrote of the majority claim that
California had overstepped its interests: "California’s interest in
ensuring that its citizens are fairly treated by insurance companies
over which the state exercises jurisdiction is hardly a superficial
one." He wrote, "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."

In 2000, then-Gov. Gray Davis had signed the law that would have
allowed victims of Armenian genocide and their heirs to sue insurance
companies to recover delinquent claims. The Ottoman Empire is accused
of killing more than 1.5 million men, women and children of Armenian
heritage The law was similar to one allowing Holocaust victims and
their heirs to sue insurers in California that may have European
affiliates or parent companies that owe outstanding claims (BestWire,
Oct. 5, 2000).

In another case in 2004, New York Life Insurance Co. agreed to settle
a multinational class-action lawsuit, paying $20 million to more than
2,500 descendents of those who died (BestWire, Nov. 14, 2006).

Though it wasn’t considered an element in the legal case, according to
written opinion, the court received a diplomatic letter from Turkey,
expressing opposition to the California statute and asking the court
to overturn it.

The Turkish government disputes the historical accounts, and some
countries including the United States, United Kingdom, and Israel do
not formally recognize the period as a genocide. However, the period
is acknowledged as a genocide by the governments of Canada, Germany,
France, Italy, Belgium, the Netherlands, Russia, and Greece, as well
as the vast majority of U.S. states (BestWire, Nov. 14, 2006).

Kabateck intends to file a petition to have the case reconsidered
by the entire 9th Circuit. Barring that, he said he’d seek a Supreme
Court review.

Soltman pointed out that achieving either is statistically
unlikely. Kabateck countered, saying he understood the rarity of
getting it reconsidered, but he said the legal question itself is a
rarity. "This is a one-of-a-kind case."