BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2011-2012 Regular Session
AB 173 (Gatto)
As Amended March 30, 2011
Hearing Date: June 14, 2011
Fiscal: No
Urgency: Yes
RD
SUBJECT
Armenian Genocide Victims
DESCRIPTION
This urgency measure would extend a December 31, 2010 statutory
deadline in order to authorize any victims of the Armenian
Genocide, or their heirs or beneficiaries, who reside in
California, and have a claim arising out of an insurance policy
purchased or in effect in Europe or Asia from 1875-1923, to
bring suit in California seeking benefits under those insurance
policies from insurers. This bill would provide that such
actions shall not be dismissed for failure to comply with the
otherwise applicable statute of limitation provided that the
action is filed on or before December 31, 2016.
BACKGROUND
From 1994-2004, the Legislature has annually recognized April
24th in remembrance of the Armenian Genocide. (AJR 73
(Simitian, 2004); SJR 1 (Poochigian, 2003); AJR 44 (Simitian,
2002); SJR 5 (Poochigian, 2001); SCR 62 (Poochigian, 2000); ACR
20 (Kaloogian, 1999); ACR 138 (Poochigian, 1998); ACR 51
(Kaloogian, 1997); ACR 82 (Poochigian, 1996); ACR 26 (Kaloogian,
1995); AJR 84 (Costa, 1994).) Then, in 2005, California enacted
SB 424 (Poochigian, Ch. 9, Stats. 2005), recognizing that
"1,500,000 Armenians living in their 3,000-year historic
homeland were subjected to torture, starvation, and murder,
including death marches into the Syrian desert, by rulers of the
Ottoman Turkish Empire and the exile of more than 500,000
innocent people during the period from 1915-23." As such, that
bill designated April 24th of each year thereafter the
(more)
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"California Day of Remembrance of the Armenian Genocide." (Gov.
Code Sec. 6720.)
Separately, existing law requires all civil actions be commenced
within applicable statutes of limitations. (Code of Civ. Proc.
Sec. 312.) Specifically, any action based upon a contract,
obligation or liability founded upon an instrument in writing
must be filed within four years of accrual of a cause of action,
except as specified. (Code of Civ. Proc. Sec. 337.) The
Legislature, however, may prescribe other limitations.
In 2000, the California Legislature first enacted a statute to
give victims of Armenian Genocide, or their heirs or
beneficiaries, until December 31, 2010 to file insurance claims
arising out of policies purchased or in effect in Europe or Asia
between 1875 and 1923. (SB 1915 (Poochigian, Ch. 543, Stats.
2000).) That statute, Section 345.4 of the Code of Civil
Procedure, was modeled after similar measures that California
enacted to provide victims of wartime atrocities additional time
to bring suits after the ordinary statute of limitations would
have tolled. (See Code of Civ. Proc. Secs. 354.5 and 354.6;
Sec. 354.3, a similar provision, was subsequently added as
well.)
About eight years after the enactment of SB 1915, however, in a
decision filed August 20, 2009, the 9th Circuit Court of Appeal
held that Code of Civil Procedure Section 345.4, extending the
statute of limitations for victims of Armenian Genocide, was
preempted by federal law under the foreign policy field
preemption doctrine. Subsequently, however, on December 10,
2010, the 9th Circuit reversed itself and upheld the statute,
removing any constitutional bar precluding renewal or extension
of that law. (Code of Civ. Proc. Sec. 345.4; Movsesian v.
Victoria Versicherung AG (2009) 578 F.3d 1052, reversed by
Movsesian v. Victoria Versicherung AG (2010) 629 F.3d 901.) At
that point, victims or their heirs or beneficiaries were left
with only 20 days to bring any remaining actions before the
December 31, 2010 deadline.
This bill would revive the statute created by SB 1915 and extend
the original deadline for victims of the Armenian Genocide or
their heirs or beneficiaries to bring suit in California seeking
to recover benefits under insurance policies purchased or in
effect in Europe or Asia between 1875 and 1923, to December 31,
2016. This bill includes an urgency clause, which would make
the bill take effect immediately, in an effort to avoid any
claims brought under the statute from being dismissed as
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time-barred.
CHANGES TO EXISTING LAW
Existing law generally provides that civil actions must be
commenced within applicable statutes of limitations, without
exception, unless the Legislature prescribes a different
limitation by statute. (Code of Civ. Proc. Sec. 312.) Under
current law, the Legislature may also prescribe no limitation at
all. (See Code of Civ. Proc. Sec. 348.)
Existing law provides that for actions based upon any contract,
obligation, or liability founded upon an instrument in writing,
the accrual period is four years, except as specified. (Code of
Civ. Proc. Sec. 337.)
Existing law provides that when a cause of action has arisen in
another state, or in a foreign country, and by the laws thereof
an action thereon cannot there be maintained against a person by
reason of the lapse of time, an action thereon shall not be
maintained against him in this state, except in favor of one who
has been a citizen of this state, and who has held the cause of
action from the time it accrued. (Code of Civ. Proc. Sec. 361.)
Existing law permits a court of this state to exercise
jurisdiction on any basis not inconsistent with the Constitution
of this state or of the United States. (Code of Civ. Proc. Sec.
410.10.)
Existing law provides that, notwithstanding any other provision
of law, any Armenian Genocide victim, or his or her heir or
beneficiary, 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, as
defined, to bring a legal action or continue a pending legal
action to recover on that claim in California court. (Code of
Civ. Proc. Sec. 354.4(b).)
Existing law defines "Armenian Genocide victim" as any person of
Armenian or other ancestry living in the Ottoman Empire during
the period of 1915-1923, inclusive, who died, was deported, or
escaped to avoid persecution during that period. (Code of Civ.
Proc. Sec. 354.4(a)(1).)
Existing law defines "insurer" as an insurance provider doing
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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. (Code of Civ. Proc. Sec. 354.4(a)(2).)
Existing law prohibits such an action, as described above, from
being dismissed for failure to comply with any applicable
statute of limitation, so long as the action is commenced on or
before December 31, 2010. (Code of Civ. Proc. Sec. 354.4(c).)
Existing case law finds there is no federal preemption of this
law, reversing a previous decision finding for preemption.
(Movsesian v. Victoria Versicherung AG (2010) 629 F.3d 901,
reversing Movsesian v. Victoria Versicherung AG (2009) 578 F.3d
1052.)
This bill would extend the deadline to commence such an action,
as described above, without dismissal of that action for failure
to comply with any applicable statute of limitation, to December
31, 2016.
This bill is an urgency measure and would go into immediate
effect.
COMMENT
1. Stated need for the bill
According to the author, this bill seeks to maintain the rights
of victims of the Armenian Genocide and their heirs. The author
writes, "İe]xisting law allowed victims or beneficiaries of the
Armenian Genocide to file action in court on the insurance
policies issued during the Armenian Genocide. Under current
law, the statute of limitations allowing the actions to be filed
lapsed on December 31, 2010. AB 173 extends the statute of
limitation to file action on these claims from December 31, 2010
to December 31, 2016."
In support of the bill, the Armenian Council of America
describes the need for victims to continue to have the right to
file action in California under this extended deadline:
During the period between 1915 and 1923, numerous Armenians
living in their historical homeland, then located in the
Ottoman Empire, were victims of the Armenian Genocide. Many
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of these victims and their descendants have been deprived of
life insurance benefits due under policies issued in Europe or
Asia by insurance companies prior to and during the Armenian
Genocide.
Also in support of the bill, the American Federation of State,
County and Municipal Employees (AFSCME) AFL-CIO writes that,
"İg]iven the scope of an atrocity like the Armenian Genocide,
the equitability of a statute of limitation on legal actions is
difficult to determine." AFSCME argues that extending the
deadline will allow for "more time for Armenian Genocide victims
in the state, and their heirs or beneficiaries, to build cases,
find materials, and take legal action."
2. Extending the statute of limitations for this cause of
action
This bill would allow for Armenian Genocide victims, or their
heirs or beneficiaries, to bring an action in California court
to recover benefits from an insurance policy issued or in effect
in Europe or Asia between 1875 and 1923 and would prohibit the
dismissal of any action for failure to comply with any
applicable statute of limitation, so long as the action is
commenced on or before December 16, 2016. The statute, as
originally enacted in 2000 by SB 1915 (Poochigian, Ch. 543,
Stats. 2000) set a deadline of December 30, 2010 for such
actions to be brought. Without the original statute, the
applicable statute of limitations would have been four years.
(Code of Civ. Proc. Sec. 337.)
a. Purpose of statute of limitations, generally
While the Legislature is permitted to revive actions and to
provide for new, or even no, statute of limitations under
existing law (Code of Civ. Proc. Sec. 312), the policy behind
the statutes of limitations is that they "are designed to
promote justice by preventing surprises through the revival of
claims that have been allowed to slumber until evidence has
been lost, memories have faded, and witnesses have
disappeared. The theory is that even if one has a just claim,
it is unjust not to put the adversary on notice to defend
within the period of limitation and the right to be free of
stale claims in time comes to prevail over the right to
prosecute them." (3 Witkin Cal. Proc. (5th Ed. 2010) Actions,
Sec. 433.)
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Here, however, it is arguable that justice-even as described
in that policy itself-would not be served by barring these
claims pursuant to the four year statute of limitation
applicable to such actions under Section 337 of the Code of
Civil Procedure. The underlying assumption of the policy
providing for statute of limitations is that the claims were
"allowed to slumber" only to be revived at a time that
"evidence has been lost, memories . . . faded, and witnesses
. . . disappeared." In the case of Armenian Genocide
victims, or their heirs or beneficiaries, seeking to recover
benefits owed under policies obtained or in effect in Europe
between 1875 and 1923, it is not clear that the claims were
"allowed to slumber." In fact, proponents of the original
legislation (SB 1915 (Poochigian, Ch. 543, Stats. 2000)),
which sought to provide additional time for action to be
brought on policies by those parties, argued that the long
delay and the resultant loss of witnesses and memories were
the product of years of systematic denial of insurance claims
from Armenian Genocide survivors and heirs.
There were other factors, proponents felt, that were relevant
and further demonstrated that the promotion of justice would
not be served by applying the otherwise applicable statute of
limitation to dismiss suits filed by Armenian Genocide victims
and their heirs. Among these was that victims' heirs had
experienced difficulty with documenting that their family
members were insured and that there was evidence showing
insurers demanded the survivors produce documents such as
death certificates that, unfortunately, the Turkish government
never issued for the hundreds of thousands of Armenian
victims. (Sen. Judiciary Com., analysis of SB 1915 (1999-2000
Reg. Session), May 9, 2000, pgs. 6-7.)
This bill would revive the statute created by SB 1915 and
extend the deadline for bringing such actions to December 31,
2016. While there is no indication that at the time of SB
1915's passage that the Legislature envisioned the December
31, 2010 deadline could be extended, the author points to
circumstances that would arguably warrant additional time to
be brought under this section, chief among them being that
case law prohibited parties from bringing these claims for
about a year and a half preceding the original deadline, as
further discussed below.
Moreover, allowing these parties to bring claims against
insurers for policies issued or in effect in Europe or Asia
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from 1875-1923, as this bill would do, does not mean those
actions will be successful. The same factors that establish
the policy for providing for statute of limitations
(documentation, witnesses, and accuracy of memories) could
presumably weigh into the court's judgment in favor of (or
against) those insurers.
b. Case law on potential federal preemption for this cause
of action
The law that this bill seeks to revive and extend was at one
point deemed preempted by federal law according to the 9th
Circuit Court of Appeal, as were the other provisions that
comprised a series of state measures enacted to extend the
statute of limitations for victims of wartime atrocities. All
of those provisions permitted claimants to bring their actions
until December 31, 2010. Likewise, one-by-one, courts
subsequently struck down each of those sister statutes as
preempted by federal law. (Movsesian v. Victoria Versicherung
AG (2009) 578 F.3d 1052 (Section 354.4, permitting Armenian
Genocide insurance claims held preempted by federal foreign
affairs power), citing Deutsch v. Turner Corp. (2003) 317 F.3d
1105 (Section 354.6, permitting victims of Nazi slave and
forced labor programs to recover compensation for labor from
any entity or its successor in interest who benefited from
that labor, held preempted under foreign policy field
preemption doctrine) and Steinberg v. International Commission
on Holocaust Insurance Claims (2005) 133 Cal.App.4th 944
(Section 354.5, permitting Holocaust victims or their heirs or
beneficiaries to bring claims based on insurance policies
issued in Europe before 1945, held preempted by a federal
policy favoring settlement of such claims through the
International Commission on Holocaust Era Insurance Claims).
In addition, after the 2009 Movsesian decision, Code of Civil
Procedure Section 354.3, permitting persons to bring claims to
recover "Holocaust-era artworks" taken by the Nazis during
World War II, was also held preempted under the foreign policy
field preemption doctrine in Von Saher v. Norton Simon Museum
of Art of Pasadena (2010) 592 F.3d 954 .)
Unlike the cases on those other measures, however,
approximately 20 days before the deadline to commence a
lawsuit under Section 354.4 of the Code of Civil Procedure
(Armenian Genocide insurance claims), the 9th Circuit reversed
its own opinion upon rehearing in Movsesian v. Victoria
Versicherung AG (2010), holding that there was no conflict
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preemption: (1) where was no clear federal policy with respect
to references of the Armenian Genocide and (2) where neither
the Claims Agreement of 1922 nor the War Claims Act of 1928
resolving World War I-related claims between the U.S. and
Germany has any application to life insurance policies issued
to citizens of the Ottoman Empire between 1915 and 1923 by
private insurance companies. (629 F.3d 901 at 905, 908). The
court relied in part on the fact that that the Armenian
Genocide-related claims addressed by Section 354.4 (arising
out of policies from 1875-1923) were private insurance claims,
not wartime injuries, and extended past the end of World War I
by five years, and past the relevant federal post-war
agreement by one year. (Id. at 908.)
Though preemption by federal law no longer bars the
commencement of these Armenian Genocide insurance claims due
to the 2010 Movsesian decision, the deadline for bringing such
actions under that same statute has now passed. In light of
the one and a half years of lost time between the conflicting
9th Circuit opinions to bring or continue such actions, and
because victims and their heirs were left with a mere 20 days
to commence any remaining actions after the second decision,
the author maintains that the deadline should be extended to
December 31, 2016.
c. Extending the deadline to 2016
This bill would extend the original deadline of December 31,
2010 to December 31, 2016. Thus, it would provide an
additional five and one-half years' time to bring an action
under this statute if it were to take effect today. However,
taking into consideration the inability of victims or their
heirs or beneficiaries to file suit under the original statute
in the year and a half period it took for the 9th Circuit to
ultimately uphold the statute, this bill would, in effect,
provide for an additional four years' time to bring an action
that otherwise would have been barred after December 31, 2010.
As a matter of public policy, it arguably does not appear
unreasonable to allow those persons to have until December 31,
2016 to gather the information needed and to officially
commence an action under this bill given a number of factors:
the extensive loss and devastation suffered as a result of the
Armenian Genocide; the difficulty posed to this class of
plaintiffs to gather the evidence needed as a result of the
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Genocide itself; the confusion caused and time lost to
commence actions as a result of changing case law; and the
foreseeable lapse in time that would occur before possible new
plaintiffs receive notice of additional time to bring these
actions, if this bill is enacted.
3. Opposition to the bill
Writing in opposition to the bill, the Turkish Peace & Justice
Committee in California alleges that "İe]xtending AB 173 is to
extend the moneymaking scam operation that is going on. It is
unlikely that any insurance policies were sold for the period of
1875-1923 in this region (Eastern Anatolia)İ.] During that
time, this region was a no-man's land equivalent to California
prior to the Gold Rush." The Committee's letter asserts that
the "Armenian Diaspora" obtained large settlements by suing
insurance companies using "imaginary insurance policies" and
"attacking them and tarnishing the company's image through the
media. To save the company's image and unnecessary legal
expİe]nses, İthe] insurance company giveİs] up and giveİs] İthe]
Armenian Diaspora some hush money." The Committee claims in
this opposition letter that such settlements include a $20
million settlement from New York Life Insurance Company and $17
million from AXA Life Insurer Company.
4. Urgency clause
Committee staff notes that this bill contains an urgency clause,
stating the necessity for the bill to take immediate effect as
follows: "In order that the insurance policy claims of Armenian
Genocide victims will not be dismissed for failure to comply
with the statute of limitations, it is necessary that this bill
take effect immediately." Such an urgency clause will also
potentially prevent further delay in justice for victims or
their heirs or beneficiaries who wished to commence suits in
2009 or 2010 while the 9th Circuit heard and re-heard the issue
of the statute's enforceability in light of preemption issues.
Support : American Federation of State, County and Municipal
Employees (AFSCME), AFL-CIO; Armenian Council of America;
Consumer Attorneys of California (CAOC)
Opposition : Turkish Peace & Justice Committee in California
HISTORY
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Source : Author
Related Pending Legislation : None Known
Prior Legislation :
SB 424 (Poochigian, Ch. 9, Stats. 2005), (See Background.)
SB 1915 (Poochigian, Ch. 543, Stats. 2000), (See Background.)
Prior Vote :
Assembly Floor (Ayes 61, Noes 0)
Assembly Judiciary Committee (Ayes 10, Noes 0)
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