Gerling Global Reinsurance Corp. v. Nelson

• Citation: 123 F.Supp.2d 1298
• Decision Date: 11 November 2000
• Docket Number: No. 4:99CV444-RH.,4:99CV444-RH.
• Parties: GERLING GLOBAL REINSURANCE CORP. OF AMERICA, et al., Plaintiffs, v. Bill NELSON, etc., Defendant.
• Court: U.S. District Court — Northern District of Florida

123 F.Supp.2d 1298

GERLING GLOBAL REINSURANCE CORP. OF AMERICA, et al., Plaintiffs, v. Bill NELSON, etc., Defendant.

No. 4:99CV444-RH.

United States District Court, N.D. Florida, Tallahassee Division.

November 11, 2000.

John K. Aurell, Ausley & McMullen, Tallahassee, FL. David J. Linesch, Linesch Firm PA, Palm Harbor, FL. Dina Daskalakis, Frederick Reif, James Donovan, Wilson Elser Moskowitz etc., New York City, NY, for Gerling Global Reinsurance Corp. of America.

Martin Stephen Turner, Broad & Cassel, Tallahassee, FL, Daniel Sears Dearing, Attorney General's Office, Dept. of Legal Affairs, Tallahassee, FL, Donald Allen Dowdell, Dept. of Ins., Div. of Legal Services, Tallahassee, FL, Daniel Y. Sumner, Dept. of Ins., State of Florida, Tallahassee, FL, for Bill Nelson.

Stephen A Ecenia, Rutledge Ecenia Underwood etc., Tallahassee, FL, for Germany, Federal Republic of Germany, Amicus.

David O Buchholz, U.S. Dept. of Justice, Federal Programs Branch, Washington, DC, for U.S., Amicus.

ORDER GRANTING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT

HINKLE, District Judge.

The Holocaust was perhaps the low point of human history. Its effects, financial and otherwise, persist. One of the continuing effects is that some Holocaust victims and their families have not received proceeds they were owed under their insurance policies; amounts due may have been confiscated by the Third Reich or otherwise left unpaid. Diplomatic efforts are underway between the governments of the United States and the Federal Republic of Germany to address these and other such matters.

This case presents the issue of whether the State of Florida has jurisdiction to compel production of information regarding the non-payment of amounts owed under insurance policies issued in Germany to German Holocaust victims by German insurers having no contacts with the State of Florida. Because constitutional principles apply to matters of great moment as well as small, and because good motives do not expand a state's jurisdictional reach, I hold that the State of Florida does not have such jurisdiction.

I

The Florida "Holocaust Victims Insurance Act," § 626.9543, Fla. Stat. (1999), has as its legislatively declared purpose that "potential and actual insurance claims of Holocaust victims and their heirs and beneficiaries be expeditiously identified and properly paid and that Holocaust victims and their families receive appropriate assistance in the filing and payment of their rightful claims." § 626.9543(2), Fla. Stat. (1999).

Toward that end, the Act includes a number of provisions purporting to affect the rights of German insurers and their German insureds under policies issued in Germany between 1920 and 1945.¹ Some of the Act's provisions apply by their terms only to insurers now doing business in the State of Florida, some apply also to any corporate affiliate of such an insurer even when the affiliate has no contact with the State of Florida, and some of the Act's provisions apply by their terms to any insurer anywhere in the world without regard to whether the insurer or any affiliate has any connection with the State of Florida.

For example, the Act requires insurers doing business in Florida to pay claims established under "a reasonable, not unduly restrictive, standard of proof," § 626.9543(5)(b), Fla. Stat. (1999), and to provide extensive information to the Florida Department of Insurance regarding policies issued to Holocaust victims by the insurers themselves or by any "parent, subsidiary, or affiliated company." § 626.9543(3)(d) & (7), Fla. Stat. (1999). By rule, the Commissioner has interpreted the Act to require any insurer doing business in Florida to pay not only its own claims but also to pay claims against any parent, subsidiary or corporate affiliate. Rule 4-137.010(6), Fla. Admin. Code.

More broadly, the Act abrogates the German statute of limitations, creates a new ten-year statute of limitations going forward, and abrogates any defense of laches. § 626.9543(6), Fla. Stat. (1999). The Act does not, by its terms, limit these provisions to insureds or insurers having any connection whatsoever to the State of Florida or, for that matter, the United States.

Finally, the Act gives insureds the right to treble damages, costs and attorney's fees, including, apparently, as a remedy for any non-payment of claims by any insurer doing business in Florida or by any parent, subsidiary or corporate affiliate of any such insurer. § 626.9543(10), Fla. Stat. (1999).²

II

Plaintiffs are six related insurers who do business in Florida. As of 1945, none had ever issued a single insurance policy to anyone; only one of the six plaintiffs was even in existence. None of the unpaid Holocaust-era policies that prompted adoption of the Florida "Holocaust Victims Insurance Act" were issued by plaintiffs.

Defendant Bill Nelson, in his capacity as Florida Insurance Commissioner, has issued subpoenas to the plaintiffs demanding that they produce records of any Holocaust-era policies issued not only by the plaintiffs themselves but by any German affiliates. Plaintiffs are affiliates of two German insurers, Gerling-Konzern Lebensversicherungs-AG ("GKL") and Gerling-Konzern Allgemeine Versicherungs-AG ("GKA"), which issued Holocaust-era policies in Germany, presumably including at least some to Holocaust victims.

Plaintiffs have brought this action challenging the Commissioner's constitutional authority to compel them to comply with the subpoenas to the extent they seek records of the German affiliates. In response, the Commissioner makes no claim that the policies for which he seeks information were issued in Florida, were issued to Florida citizens, or had any connection whatsoever to the State of Florida. The Commissioner makes no claim that the German affiliates do business in Florida, have ever done business in Florida, or have any contacts whatsoever with the State of Florida, other than their relationship with the plaintiffs.

Plaintiffs have moved for summary judgment. The Commissioner has moved to dismiss or alternatively for summary judgment. I grant the plaintiffs' motion and direct the entry of judgment in their favor.³

III

It has long been established that the Due Process Clause of the Fourteenth Amendment limits the jurisdictional reach of state courts. Thus state courts have jurisdiction only over parties having sufficient minimum contacts with the state. See, e.g., World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980); International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). The many cases applying this principle recognize that our constitutional structure places limits on the ability of a state to reach beyond its borders to parties not legitimately subject to the state's authority.

The jurisdictional limitations mandated by the Due Process Clause are applicable not only to a state's judiciary but also to a state's executive and legislative branches. There is nothing in the language of the Due Process Clause that suggests otherwise, and nothing in the underlying constitutional structure that suggests that the extra-territorial jurisdiction of a state's executive or legislative branches should exceed that of the judiciary. A state's three branches of government are all subject to the same federal constitutional structure and to the same Due Process Clause; parties subject to a state's constitutional jurisdiction — judicial, legislative or executive — are only those with sufficient minimum contacts with the state.

The United States Court of Appeals for the Eleventh Circuit recently reconfirmed this analysis. In American Charities for Reasonable Fundraising Regulation, Inc. v. Pinellas County, 221 F.3d 1211 (11th Cir.2000), the court said:

A state's legislative jurisdiction is circumscribed by the Due Process Clause: "There must be at least some minimal contact between a State and the regulated subject before it can, consistently with the requirements of due process, exercise legislative jurisdiction." Hellenic Lines Ltd. v. Rhoditis, 398 U.S. 306, 90 S.Ct. 1731, 1737 n. 2, 26 L.Ed.2d 252 (1970) (Harlan, J., dissenting); accord Adventure Communications Inc. v. Kentucky Registry of Election Finance, 191 F.3d 429, 435-36 (4th Cir.1999). The inquiry into whether sufficient legislative jurisdiction exists is similar to that explored in determining sufficient minimum contacts for the purposes of assessing whether a court can exercise personal jurisdiction consistent with due process, or whether a court can apply a state's own law under choice-of-law analysis to a case consistent with due process. See Adventure Communications, 191 F.3d at 436 (noting a substantial overlap in analysis); Quill Corp. v. North Dakota, 504 U.S. 298, 112 S.Ct. 1904, 1909, 119 L.Ed.2d 91 (1992) (stating that due process "requires some definite link, some minimum connection, between state and the person, property or transaction it seeks to tax").

American Charities, 221 F.3d at 1216 (underlining added; footnote omitted).

In sum, beyond any reasonable argument, the Florida Holocaust Victims Insurance Act is subject to review under the jurisdictional principles of the Due Process Clause and may be enforced only to the extent consistent with those principles.

IV

Applying the Due Process Clause's jurisdictional principles to these facts does not present a difficult issue. The insurance contracts at issue were entered in Germany between German parties under German law. They addressed German events. Any breach of the contracts occurred in Germany. The parties to the contracts had no connection with Florida. The events governed by the contracts had no connection with Florida. The grounds for exercising jurisdiction over these parties or these events in Florida are exactly none.

Many cases recognize a state's lack of jurisdiction over such extra-territorial contracts. See, e.g., Home Ins. Co. v. Dick, 281...