August 21, 2009
Source: Los Angeles Times (California)

By Carol J. Williams

Armenian Americans descended from victims of the 1915-18 massacre by Ottoman Turks can't sue foreign insurance companies for unpaid claims because the U.S. government doesn't legally recognize that an Armenian genocide occurred, a federal appeals court ruled Thursday.

A Glendale priest and thousands of other Armenians whose relatives were among the 1.2 million killed had won a partial victory two years ago. U.S. District Judge Christina A. Snyder said then that a 2000 law passed by the California Legislature gave the descendants standing to sue three German insurance companies.

But a divided three-judge panel of the U.S. 9th Circuit Court of Appeals overturned that ruling, saying the California law attempted to undercut the president's diplomatic authority and had to be preempted by the federal policy against acknowledging the genocide.

Congress has considered resolutions three times in the last decade that would have provided official recognition of the genocide. Each time, the White House has stepped in to urge that the bills be scuttled, out of fear that passage would damage relations with Turkey, whose government disputes that a genocide took place.

"I think the decision is outrageous. If taken to its logical extension, what this decision means is that all 40 states that have recognized the Armenian genocide have to set aside that recognition," said Brian S. Kabateck, a Los Angeles lawyer representing the plaintiffs whose own maternal grandparents died in the genocide.

"This is a sad day for Armenian Americans," he said, adding that the decision would make recovery of victims' bank accounts, insurance proceeds and other property impossible. He vowed to appeal for rehearing by a larger panel of judges.

Vartkes Yeghiayan, the lawyer for lead plaintiff Father Vazken Movsesian of St. Peter Armenian Church, described the ruling as "devastating."

The attorney representing the German insurers, Neil M. Soltman, called the decision "a straight-down-the-middle determination that in the area of foreign affairs, federal power has to prevail."

Judge Harry Pregerson dissented from the majority opinion by Judges David R. Thompson and Dorothy W. Nelson. Pregerson wrote that the District Court had correctly judged the California statute as "within the state's traditional area of competence" in regulating the insurance industry.

The plaintiffs sought settlement of claims under policies issued by German insurers Victoria Versicherung and Ergo Versicherungsgruppe, as well as their parent company, Munchener Ruckversicherungsgesellschaft.