February 24, 2012
Source: Los Angeles Times (California)

By Carol J. Williams

Survivors of Armenian genocide victims can't sue German insurance companies for failing to pay claims because only the federal government can bring foreign entities to court, the U.S. 9th Circuit Court of Appeals ruled Thursday.

The 11-judge panel dismissed the case brought nearly a decade ago by Southern California Armenians, probably putting an end to their efforts to compel the German companies to pay survivors' benefits on policies sold to victims between 1875 and 1923.

A 2000 revision to California's Civil Code allowed California courts to consider the Armenians' insurance claims beyond the deadline for petitioning for payouts by subsidiaries of the German insurance company now known as Munich Re.

"The Constitution gives the federal government the exclusive authority to administer foreign affairs," the appeals court said in a unanimous ruling. "Under the foreign affairs doctrine, state laws that intrude on this exclusively federal power are preempted."

The lawsuit against Munich Re was brought by Vazken Movsesian, an Armenian priest in Glendale, on behalf of Armenians who sought damages from the insurer for breach of contract. A federal district judge declined to dismiss the case five years ago, a decision overturned by a divided three-judge panel of the 9th Circuit in 2009, prompting the full 11-judge review.

Thursday's ruling said that even in matters in which the federal government hasn't formulated a policy, the state courts lack the authority to address questions that can affect foreign relations. That appeared to be a reference to Washington's delicate balancing act on Turkey, a republic that succeeded the Ottoman Empire. Turkey denies that, in the empire's final years, any genocide occurred.

The genocide dispute continues to flare almost a century after the killings. Two years ago when the House Foreign Affairs Committee narrowly passed a resolution to recognize the genocide, Turkey recalled its ambassador from Washington in protest. The resolution has languished in the Senate, as U.S. politicians seek to keep NATO ally Turkey committed to sanctions against Iran.

A lawyer for the Armenian plaintiffs conceded that the 9th Circuit ruling probably spelled the end of the pursuit of compensation for the genocide victims' descendants.

"The court says this is a field preemption, which means anything that deals with this group of people is reserved for the federal government," said Lee Boyd, who argued the case for the Armenians before the 9th Circuit in December.

Attorneys for the denied claimants will look for some avenue of appeal "but it doesn't look very promising," Boyd said, noting the unusual unanimity of the court and the U.S. Supreme Court's refusal to review similarly unsuccessful efforts to subject foreign entities to state law.