Last month, the United States Court of Appeals for the Ninth Circuit, in a unanimous opinion, struck down a California law, which extended the statute of limitations for insurance claims by the heirs of Armenian Genocide victims. The court held that the California law was constitutionally preempted under the “foreign affairs doctrine” because it interfered with the federal government’s exclusive domain over foreign affairs.
The genesis of the Ninth’s Circuit’s opinion was a 2003 class action filed by the heirs of Armenian Genocide victims in California district court to recover the benefits of life insurance policies issued by several German insurance companies between 1875 and 1923. One of the defendant insurers, Munich Re, moved to dismiss the class action on the basis that the California law was unconstitutional under the foreign affairs doctrine. The district court denied Munich Re’s motion and Munich Re filed an interlocutory appeal to the Ninth Circuit.
In reversing the lower court’s ruling, the Ninth Circuit held that the California law was constitutionally preempted because it did not involve a traditional area of state concern and intruded on the federal government’s foreign affairs power. The challenged statute vested California courts with jurisdiction to hear insurance claims by persons of Armenian ancestry who lived in the Ottoman Empire between 1915 and 1923 and either died, were deported, or fled to avoid persecution. The court reasoned that the California law was not the type of “garden variety” insurance regulation that is traditionally reserved for the states, and noted that the law expressed a “distinct political point of view on a specific matter of foreign policy.” The court concluded that the application of the California statute would require a “highly politicized inquiry into the conduct of a foreign nation,” and therefore, remanded the case to the district court with instructions to dismiss all claims by the life insurance beneficiaries.
The Honorable Susan P. Graber authored the opinion for the Ninth Circuit.© 2014 Neal, Gerber & Eisenberg LLP.