Tuesday, January 4, 2011
In 2009, the U.S. Court of Appeals for the Ninth Circuit held that the State of California's law extending the statute of limitations under certain insurance policies for victims of Armenian genocide was preempted by the federal policy against recognition of Armenian genocide. See Movsesian v. Victoria Versicherung AG, No. 07-56722. The Court's 2009 decision was based on certain informal statements by the executive branch opposing official recognition of Armenian genocide due to the potentially negative impact that would have on U.S.-Turkish relations.
On rehearing, the Court withdrew its initial opinion, finding that there is no clear federal policy. Instead, there are conflicting statements by the federal government, some recognizing the Armenian genocide and some refusing to do so. California's regulation of insurance is a traditional state function and the impact of its statute on foreign relations is likely incidental in light of the fact that 39 other states also have state statutes that recognize the Armenian genocide. The Court's December 2010 decision on rehearing Movsesian can be found here.
The Court was correct to reverse itself in this case. Although the federal government clearly has a primary role in the area of foreign relations, it has not set forth a clear federal policy opposing the recognition of Armenian genocide. Absent such a policy, informal statements by certain presidents should not be allowed to preempt state action in an area of traditional state regulation such as insurance. If the federal government wishes to preempt state law in this area, it can always do so by adopting Congressional resolutions, enacting statutes, or creating an executive agreement or treaty that opposes the recognition of Armenian genocide.