Thursday, December 16, 2010
A divided three-judge panel of the Ninth Circuit last Friday upheld California's law providing for a cause of action by Armenian Genocide victims (or their ancestors) against insurance companies that sold them a policy in Europe or Asia between 1875 and 1923.
Defendant insurance companies in Movsesian v. Victoria Versicherung AG argued that the state law was preempted by "a clear, express federal policy against the use of the term 'Armenian Genocide.'" But the majority ruled that any executive branch communications arguing against recognition of the Armenian Genocide were outweighed by federal government statements in favor of such recognition. Moreover, some forty states recognize the Genocide, and the federal government has never opposed such recognition.
Defendants also argued that the law was preempted under field preemption. But the majority ruled that California's law is a valid regulation of the insurance industry, citing Am. Ins. Assoc. v. Garamendi, and its effect on foreign affairs is merely incidental, at most.
Judge Thompson wrote in dissent that the law "clearly conflicts with . . . express federal policy" against recognizing the Armenian Genocide, as evidenced by President Clinton's and President Bush's opposition to three House Resolutions to formally recognize the Genocide. Op. at 19662-3. As to field preemption, he wrote that the law interferes with the federal government's "primar[y], if not exclusiv[e]" authority over foreign affairs, citing Zschernig v. Miller and Hines v. Davidowitz.