Movsesian v. Victoria Versicherung AG

• Decision Date: 10 December 2010
• Docket Number: No. 07-56722,07-56722
• Citation: 629 F.3d 901
• Parties: Vazken MOVSESIAN; Harry Arzoumanian; Garo Ayaltin; Miran Khagerian; Ara Khajerian, individually and on behalf of all others similarly situated including thousands of senior citizens, disabled persons, and orphans as well as on behalf of the general public and acting in the public interest, Plaintiffs-Appellees, v. VICTORIA VERSICHERUNG AG, a German corporation; Ergo Versicherungsgruppe AG, a German corporation, Defendants, and Munchener Ruckversicherungs-Gesellschaft Aktiengesellschaft AG, a German corporation, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

629 F.3d 901

Vazken MOVSESIAN; Harry Arzoumanian; Garo Ayaltin; Miran Khagerian; Ara Khajerian, individually and on behalf of all others similarly situated including thousands of senior citizens, disabled persons, and orphans as well as on behalf of the general public and acting in the public interest, Plaintiffs-Appellees,

v. VICTORIA VERSICHERUNG AG, a German corporation; Ergo Versicherungsgruppe AG, a German corporation, Defendants,andMunchener Ruckversicherungs-Gesellschaft Aktiengesellschaft AG, a German corporation, Defendant-Appellant.

No. 07-56722.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Dec. 8, 2008.

Filed Dec. 10, 2010.

Neil Michael Soltman, Los Angeles, CA, for the defendant/appellant.

Brian S. Kabateck, Los Angeles, CA, for the plaintiffs/appellees.

Appeal from the United States District Court for the Central District of California, Christina A. Snyder, District Judge, Presiding. D.C. No. CV-03-09407-CAS-JWJ.

Before: HARRY PREGERSON, DOROTHY W. NELSON and DAVID R. THOMPSON, Circuit Judges.

Opinion by Judge PREGERSON; Dissent by Judge THOMPSON.

ORDER

Judge Pregerson and Judge Nelson vote to grant the petition for rehearing and Judge Thompson votes to deny the petition for rehearing. The petition for rehearing is GRANTED.

The opinion and dissent filed on August 20, 2009, are hereby withdrawn. The opinion and dissent attached to this order are hereby filed.

New petitions for rehearing and rehearing en banc may be filed.

PREGERSON, Circuit Judge:

OPINION

Section 354.4 of the California Code of Civil Procedure extends the statute of limitations until 2010 for claims arising out of life insurance policies issued to "Armenian Genocide victim[s]." Cal.Civ.Proc.Code § 354.4(c) (West 2006). The primary issue in this appeal is whether § 354.4 conflicts with a clear, express federal executive policy. We conclude that there is no express federal policy forbidding states to use the term "Armenian Genocide," and we affirm the district court.

I. Background

In 2000, the California Legislature enacted Senate Bill 1915, which amended California's Code of Civil Procedure ¹ to provide California courts with jurisdiction over certain classes of claims arising out of insurance policies held by "Armenian Genocide victim[s]." Sen. Bill No. 1915 (1999-2000 Reg. Sess.), 2000 Cal. Legis. Serv. 543 (West 2000), codified at Cal.Civ.Proc.Code § 354.4. The Bill also amended the Code to extend the statute of limitations for such claims until December 31,2010. Id. Section 354.4, in its entirety, provides:

(a) The following definitions govern the construction of this section:

(1) "Armenian Genocide victim" means any person of Armenian or other ancestry living in the Ottoman Empire during the period of 1915 to 1923, inclusive, who died, was deported, or escaped to avoid persecution during that period.

(2) "Insurer" means an insurance provider doing business in the state, or whose contacts in the state satisfy the constitutional requirements for jurisdiction, that sold life, property, liability, health, annuities, dowry, educational, casualty, or any other insurance covering persons or property to persons in Europe or Asia at any time between 1875 and 1923.

(b) Notwithstanding any other provision of law, any Armenian Genocide victim, or heir or beneficiary of an Armenian Genocide victim, who resides in this state and has a claim arising out of an insurance policy or policies purchased or in effect in Europe or Asia between 1875 and 1923 from an insurer described in paragraph (2) of subdivision (a), may bring a legal action or may continue a pending legal action to recover on that claim in any court of competent jurisdiction in this state, which court shall be deemed the proper forum for that action until its completion or resolution.

(c) Any action, including any pending action brought by an Armenian Genocide victim or the heir or beneficiary of an Armenian Genocide victim, whether a resident or nonresident of this state, seeking benefits under the insurance policies issued or in effect between 1875 and 1923 shall not be dismissed for failure to comply with the applicable statute of limitation, provided the action is filed on or before December 31, 2010.

(d) The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

In the legislative findings accompanying the statute, the Legislature recognized that:

[D]uring the period from 1915 to 1923, many persons of Armenian ancestry residing in the historic Armenian homeland then situated in the Ottoman Empire were victims of massacre, torture, starvation, death marches, and exile. This period is known as the Armenian Genocide.

Sen. Bill No. 1915 at § 1.

In December 2003, Vazken Movsesian ("Movsesian") filed this class action against Victoria Versicherung AG ("Victoria"), Ergo Versicherungsgruppe AG ("Ergo"), and Munchener Ruckversicherungs-Gesellschaft Aktiengesellschaft AG ("Munich Re"). Movsesian and his fellow class members are persons of Armenian descent who claim benefits from insurance policies issued by Victoria and Ergo. Munich Re is the parent company of Victoria and Ergo. Movsesian seeks damages from all three companies for breach of written contract, breach of the covenant of good faith and fair dealing, unjust enrichment, and other related claims. Munich Re filed a Rule 12(b)(6) motion to dismiss the claims, arguing that the class members lacked standing to bring claims under § 354.4, and contending that it was not a proper defendant under § 354.4. Munich Re also challenged the constitutionality of § 354.4, on the grounds that it violated the due process clause of the United States Constitution and was preempted under the foreign affairs doctrine.

The district court granted Munich Re's motion to dismiss the claims for unjust enrichment and constructive trust, and denied Munich Re's motion to dismiss the claims for breach of contract and breach of the covenant of fair dealing. The court held that the class members had standing to bring their claims, and that Munich Re was a proper defendant under § 354.4. The court rejected Munich Re's due process challenge, and held that § 354.4 was not preempted under the foreign affairs doctrine.

Munich Re filed a motion to certify the district court's order for interlocutory appeal, and to stay the action pending appeal. The district court granted the motion, and stayed the case. Within the ten-day window provided by 28 U.S.C. § 1292(b), Munich Re petitioned this court for permission to pursue an interlocutory appeal, which we granted.²

On appeal, the parties address three issues: first, whether § 354.4 is preempted under the foreign affairs doctrine; second, whether Munich Re is a proper defendant; and third, whether the Plaintiff-Appellees have standing to bring these claims.³ We address each issue in turn.

II. Standard of Review

We review de novo a district court's grant of a Rule 12(b)(6) motion to dismiss. Edwards v. Marin Park, Inc., 356 F.3d 1058, 1061 (9th Cir.2004). "When ruling on a motion to dismiss, we accept all factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party." Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir.2005).

III. The Constitutionality of § 354.4 Under the Foreign Affairs Doctrine

This case presents the issue of whether § 354.4 of the California Code of Civil Procedure is preempted under the foreign affairs doctrine. Munich Re contends that § 354.4 is preempted in two ways: first, that it conflicts with the Executive Branch's policy prohibiting legislative recognition of an "Armenian Genocide"; and second, that it is preempted by the Claims Agreement of 1922 (the "Claims Agreement") and the War Claims Act of 1928 (the "War Claims Act"). We conclude that there is no clear federal policy with respect to references to the Armenian Genocide, and, therefore, that there can be no conflict. We also conclude that neither the Claims Agreement nor the War Claims Act, which resolved World War I-related claims between the United States and Germany, has any application to life insurance policies issued to citizens of the Ottoman Empire between 1915 and 1923.

A. Conflict Preemption

It is well settled that "at some point an exercise of state power that touches on foreign relations must yield to the National Government's policy." Am. Ins. Assoc. v. Garamendi, 539 U.S. 396, 413, 123 S.Ct. 2374, 156 L.Ed.2d 376 (2003). "Nor is there any question generally that there is executive authority todecide what that policy should be." Id. at 414, 123 S.Ct. 2374. However, not every executive action or pronouncement constitutes a proper invocation of that potentially preemptive policy-making power. See Medellin v. Texas, 552 U.S. 491, 531-32, 128 S.Ct. 1346, 170 L.Ed.2d 190 (2008) (limiting preemptive effect of informal presidential communications where Congress has not implicitly approved such authority). Garamendi established that executive agreements do carry policy-making force, at least where Congress has historically acquiesced to such executive practices. See Garamendi, 539 U.S. at 415, 123 S.Ct. 2374; Medellin, 552 U.S. 491 at 531-32, 128 S.Ct. 1346. In Garamendi, the Court found that several executive agreements, coupled with statements from executive branch officials, constituted an express federal policy. Garamendi, 539 U.S. at 415, 123 S.Ct. 2374. Here, in contrast, there is no executive agreement regarding use of the term "Armenian Genocide."

Instead, Munich Re points to informal presidential communications as the sole source of a clear, express federal policy against use of the term "Armenian Genocide." For example, in 2000, House Resolution 596 proposed to recognize the Ottoman Empire's atrocities against the Armenians between 1915 and 1923. H.R. Res. 596, 106th...