A federal appeals court has dealt a major blow to descendants of Armenian genocide victims, ruling that a California law that had opened the door to several multimillion-dollar settlements against life insurance companies is unconstitutional.
The 9th U.S. Circuit Court of Appeals tossed out the law on Thursday, ruling 2-1 that U.S. foreign policy, which does not officially recognize the Armenian genocide, pre-empts California's statute. The ruling came one day after the same panel used the same reasoning to strike down a 2002 law meant to help the heirs to artwork allegedly stolen by the Nazis.
Both laws had extended the statute of limitations to file claims to Dec. 31, 2010.
"We view this as a travesty," said Brian Kabateck, a partner at Kabateck Brown Kellner in Los Angeles, who represents the plaintiff and many other Armenian descendants in class actions against insurance companies. "The two judges in this divided opinion got it wrong. The real tragedy is [that] it denies descendants of victims of the Armenian genocide the same rights that Holocaust victims have to recover against banks and insurance companies."
Earlier Armenian genocide cases have yielded big settlements. In 2004, New York Life Insurance Co. agreed to pay $20 million to settle such claims and in 2005 AXA S.A. agreed to a $17 million settlement. Last year, Armenian descendants filed a class action against Aviva PLC, a British firm. Another suit is pending against Deutsche Bank.
Kabateck and Mark Geragos, principal in Los Angeles-based Geragos & Geragos, have taken the lead in litigating Armenian genocide cases.
Neil M. Soltman, a partner in the Los Angeles office of Chicago's Mayer Brown, who represents the defendants in the genocide case, said that the ruling will put an end to such lawsuits.
"With this statue going out, that should end the equation," he said. "They should be out of that business now."
The Armenian genocide, while not recognized by the United States, is believed to have resulted in the deaths of more than 1.5 million Armenians at the hands of the Ottoman Empire between 1915 and 1923. The government of modern Turkey, an important member of the North Atlantic Treaty Organization, has strenuously denied that a genocide occurred.
The latest case was filed in 2003 by Vazken Movsesian, who is of Armenian descent, against two German insurers and their parent company, Munchener Ruckversicherungs Gesellschaft A.G., or Munich Re. Munich Re filed a motion to dismiss, citing the foreign affairs doctrine. In particular, Munich Re pointed to numerous failed federal legislative efforts to formally recognize the Armenian genocide.
U.S. District Court Judge Christina A. Snyder of the Central District of California rejected the company's motion, only to be overruled.
"The conflict is clear on the face of the statute: by using the phrase 'Armenian Genocide,' California has defied the President's foreign policy preferences," 9th Circuit Judge David R. Thompson wrote for himself and Judge Dorothy W. Nelson. "The federal government has made a conscious decision not to apply the politically charged label of 'genocide' to the deaths of these Armenians during World War I. Whether or not California agrees with this decision, it may not contradict it." Movsesian v. Versicherung A.G., No. 07-56722 (9th Cir.).