BILL ANALYSIS �
AB 173
Page 1
Date of Hearing: March 22, 2011
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
AB 173 (Gatto) - As Introduced: January 20, 2011
As Proposed to be Amended
SUBJECT : ARMENIAN GENOCIDE VICTIMS: INSURANCE CLAIMS
KEY ISSUE : SHOULD ARMENIAN GENOCIDE VICTIMS, and their heirs or
beneficiaries, BE PERMITTED TO FILE SUIT IN CALIFORNIA AGAINST
CERTAIN INSURERS UNTIL December 31, 2013, notwithstanding
failure to comply with any otherwise applicable statute of
limitation?
FISCAL EFFECT : As currently in print this bill is keyed
non-fiscal.
SYNOPSIS
This bill seeks to revive and extend a statute, first enacted in
2000, that gave victims of Armenian Genocide, or their heirs or
beneficiaries, until December 31, 2010, to file insurance claims
arising out of policies that were purchased or in effect in
Europe or Asia between 1875 and 1923. Under the existing
statute of limitation, 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.
Because of the absence of documents (including death
certificates) and dislocations caused by war, persecution, and
deportation between 1915 and 1923, many of the beneficiaries
under these policies could not possibly have brought actions
within the four year statute of limitation. As such, in 2000 SB
1915 provided that no action brought by a victim, heir, or
beneficiary to recover proceeds would be barred by any statute
of limitation so long as the action was brought before December
31, 2010. In 2009, Ninth Circuit Court of Appeal found that the
measure was preempted by federal law under the foreign policy
field preemption doctrine. Upon rehearing, however, the Ninth
Circuit reversed itself in an opinion issued on December 10,
2010. Thus, the constitutional bar that might have precluded
renewal and extension of this particular statute has been
removed. The bill as introduced extended the time to bring an
action another ten years, until December 31, 2020, but it is the
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assessment of the Committee that the intent of the 2000
legislation was not to create a renewable sunset, but rather to
give known claimants otherwise barred by the statute of
limitation until December 31, 2010, to bring their claims. That
period would have already expired regardless of any action by
the Court. Thus, the only persons who were affected by the
court's reversal are those who abandoned a claim in light of the
2009 ruling and did not have time to revive it given that only
three weeks separated the court's reversal and the deadline.
Therefore, the Committee is proposing a two-year extension until
December 31, 2013. The following bill summary and analysis
reflects that proposed amendment. In order to bring justice to
victims, the author wishes to take an amendment in Committee
adding an urgency clause so that the bill will take effect
immediately.
SUMMARY : Permits Armenian Genocide victims, as defined, or
their heirs or beneficiaries, who are residents of this state,
to file suit in a California court against certain insurers to
recover proceeds due under specified insurance policies until
December 31, 2013. Specifically, this bill :
1)Defines "Armenian Genocide victim" to include 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)Defines "insurer" to mean any insurance provider doing
business in California, or that is otherwise subject to
California jurisdiction, that sold insurance policies covering
persons or property in Europe or Asia at any time between 1875
and 1923.
3)Permits, notwithstanding any other provision of law, an
Armenian Genocide victim, or the 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 Asian between 1875 and 1923, to
bring an action or continue a pending action in a California
court, which shall be deemed the proper forum for that action
until its completion or resolution.
4)Provides that any action described above shall not be
dismissed for failure to comply with the applicable statute of
limitation, provided the action is filed on or before December
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31, 2013.
EXISTING LAW :
1)Generally provides a statute of limitation for commencing a
civil action. For actions based "upon any contract,
obligation or liability founded upon an instrument in
writing," the accrual period is generally four years.
However, the Legislature may by statute prescribe other
limitations or no limitation at all. (Code of Civil Procedure
Sections 312 and 337.)
2)Permits an owner, or the heir or beneficiary of an owner, of
Holocaust-era artwork taken as a result of Nazi persecution
between 1929 and 1945, to bring an action in a California
court to recover the artwork from any gallery or museum that
displays, exhibits, or sells articles of historical,
interpretive, scientific, or artistic significance. Provides
that such an action shall not be 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 Civil Procedure Section 354.3. Held preempted in Von Saher
v. Norton Simon Museum of Art of Pasadena (2010) 592 F.3d
954.)
3)Permits an Armenian Genocide victim, as defined, or the heirs
or beneficiary of a victim, to bring an action in California
court to recover proceeds from an insurance policy that was
issued or in effect in Europe or Asia between 1875 and 1923.
Provides that such an action shall not be 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 Civil Procedure Section 354.4. Held preempted
in Movsesian v. Victoria Versicherung AG (2009) 578 F.3d 1052;
reversed upon rehearing, Movsesian v. Victoria Versicherung AG
(Dec. 10, 2010) 629 F.3d 901; 2010 US App LEXIS 24225.)
4)Permits a Holocaust victim, as defined, or the heirs or
beneficiary of a victim, to bring an action in California
court to recover insurance proceeds from a policy issued in
Europe before 1945. Provides that such an action shall not be
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 Civil Procedure Section 354.5.
Held preempted in Steinberg v. International Commission on
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Holocaust Insurance Claims (2005) 133 Cal. App. 4th 944.)
5)Permits a Second World War slave or forced labor victim, as
defined, or the heirs or beneficiaries of the victim, to bring
an action to recover compensation for the slave or forced
labor performed against any entity, or successor in interest
thereof, for whom that labor was performed, either directly or
through a subsidiary or affiliate. Provides that no such
action shall be barred on statute of limitation grounds so
long as the action is filed on or before December 31, 2010.
(Code of Civil Procedure Section 354.6. Held preempted in
Deutsch v. Turner Corp. (2003) 317 F.3d 1105; and Steinberg v.
International Commission on Holocaust Insurance Claims (2005)
133 Cal. App. 4th 944.)
COMMENTS : The author introduced this bill to ensure that
victims of the Armenian genocide, and their heirs or
beneficiaries, would be provided an opportunity to resolve their
insurance claims on the merits. During the late nineteenth and
early twentieth centuries, insurance companies marketed
insurance policies to Armenians living in historic Armenia, then
part of the Ottoman Empire. It is estimated that approximately
10,000 polices were sold at that time. From 1915 until 1923,
most scholars agree, approximately 1.5 million Armenians were
subject to forced marches, torture, and murder. Families were
separated and those who were not killed were either deported or
fled persecution.
Although the number of persons residing in California who
directly experienced the Armenian Genocide is of course
dwindling, many heirs and beneficiaries entitled to proceeds
under insurance policies purchased by the victims still reside
in the state. Although many California families have sought to
resolve these claims, the dislocation caused by war and diaspora
has made it difficult for them to document that their family
members were insured. Additionally, as the author of the
original legislation noted, there is evidence that insurers
demanded that the survivors produce death certificates, even
though neither the Ottoman or Turkish governments ever issued
death certificates for the hundreds of thousands of Armenian
victims. Finally, even when families overcame these obstacles
and gathered the necessary evidence and documents, they found
that their claims were barred by a four-year statute of
limitation on bringing claims for liabilities based on a written
document. In order to address this problem, SB 1915
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(Poochigian, Chapter 543, Stats. of 2000) gave victims, heirs,
and beneficiaries of the Armenian Genocide until December 31,
2010, to bring their causes of action, even if those actions
were otherwise barred by the applicable statute of limitation.
Background: Federal Preemption and State Causes of Action.
Section 354.4 of the Code of Civil Procedure (CCP), the original
statute extending the time for bringing actions to victims of
the Armenian Genocide and their heirs, was one of a series of
measures enacted between 1998 and 2002 that extended the statute
of limitation for victims of wartime atrocities. All of these
statutes permitted claimants to bring their actions until
December 31, 2010. CCP Section 354.3 permits persons to bring
claims to recover "Holocaust-era artworks" taken by the Nazis
during World War II. CCP Section 354.5 permits victims of the
Holocaust, or their heirs or beneficiaries, to bring claims
based on insurance policies issued in Europe before 1945. CCP
Section 354.6 permits victims of Nazi slave and forced labor
programs to recover compensation for labor from any entity, or
its successor in interest, who benefitted from that labor.
All of these statutes have been successfully challenged on
preemption grounds, although the ruling originally striking down
the Armenian Genocide statute was subsequently reversed upon
rehearing. �See Von Saher v. Norton Simon Museum of Art of
Pasadena (2010) 592 F.3d 954 (holding that CCP Section 354.3, on
recovery of art, was preempted under the foreign policy field
preemption doctrine); Steinberg v. International Commission on
Holocaust Insurance Claims (2005) 133 Cal. App. 4th 944 (holding
that CCP 354.5, on Holocaust-era insurance claims, was preempted
by a federal policy favoring settlement of such claims through
the International Commission on Holocaust Era Insurance Claims);
Deutsch v. Turner Corp. (2003) 317 F.3d 1105 (holding that CCP
354.6, on slave labor, was preempted under foreign policy field
preemption doctrine); Movsesian v. Victoria Versicherung AG
(2009) 578 F.3d 1052 (holding that CCP 354.4, on Armenian
Genocide insurance claims, was preempted by federal law;
reversed upon rehearing, Movsesian v. Victoria Versicherung AG
(Dec. 10, 2010) 629 F.3d 901; 2010 US App LEXIS 24225.]
In its recent reversal on the Armenian Genocide statute, the 9th
Circuit Court of Appeal distinguished its ruling from its prior
holding in Deutsch v. Turner, the 2003 opinion that voided the
slave labor compensation statute. In Deutsch, the 9th Circuit
held that any state effort to create a private right of action
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for "war related injuries" intruded upon the federal
government's "exclusive powers of matters related to war." The
court distinguished the Armenian genocide insurance cases, on
the other hand, holding that these were private claims against
private insurance companies, and therefore were not matters
relating to war. Moreover, the post-World War I agreements
created a commission to settle claims of "American citizens"
against "the German government or German nationals." It did not
cover claims by Armenian citizens of the Ottoman Empire, or
their heirs, against private insurance companies. In addition,
the court noted that the Legislature defined the period of the
Armenian Genocide as extending from 1915 to 1923, revealing the
Legislature's understanding that the genocide continued after
the end of the War by five years, and even after the relevant
post-war agreement by one year, and therefore claims arising as
a result of the genocide could not have been included in
agreements ending the war.
Although the court did not expressly distinguish the latest case
from Von Saher - the 9th Circuit ruling invalidated CCP 354.3 on
recovery of Holocaust art - it did note that the Nazi art case
also involved "field preemption" and a "matter of war," whereas
the Armenian insurance actions were private claims in an area of
traditional state concern.
While one can distinguish rulings voiding the slave labor and
Nazi art theft statutes, the Court's reversal of the Armenian
Genocide insurance claims might, at first glance, suggest that
CCP 354.5, relating to Holocaust insurance claims, could be also
salvaged - since it too deals with "private" insurance claims
and not strictly speaking "matters of war." However, in
Steinberg v. Int'l Comm. on Holocaust Era Insurance Claims
(2005), the 9th circuit found an express federal policy in a
United States executive agreement with several European nations
to the effect that all insurance- related claims should be
processed through the International Commission on Holocaust Era
Insurance Claims (ICHEIC). So even though the Nazi era
insurance claims could also be seen as private matters and not
"matters of war," the United States has nonetheless entered into
an international agreement dealing expressly with Nazi-era
insurance claims. There was no such international agreement
that the United States signed pertaining to the Armenian
genocide insurance claims.
Rationale for Extending the Deadline for Armenian Genocide
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Insurance Claims . While the 9th Circuit's recent reversal
removes any constitutional bar to renewing CCP Section 354.3, it
is not clear to the Committee how the court rulings justify an
additional ten year extension of the statute. The author's
desire to "renew" the statute for another ten years implies that
the original deadline of December 31, 2010, was intended as a
sunset provision subject to renewal. However, nothing in the
legislative history or the express language of SB 1915 suggests
that possibility. Rather, it appears that the measure was
intended to give more time to known claimants whose efforts to
recover had been frustrated by lack of documentation and/or an
expired statute of limitation. That deadline has now passed,
and there is no suggestion in the legislative history to suggest
that this was intended to be an ever-moving deadline. If that
were the intent of the Legislature, it could have eliminated a
statute of limitation for such causes of action entirely, but it
chose not to do so. However, it is possible that some claimants
who intended to file an action before 2010, but who had still
not done so by the time of the 2009 ruling striking down the
statute, abandoned those actions after the first ruling. When
the Court reversed itself on December 10, 2010, those claimants
would have had only three weeks, assuming they were even aware
of the ruling, to revive their abandoned causes of actions.
Because many claimants may have abandoned their claims in
reliance on the first ruling, it seems fair to give those
persons additional time to re-file those claims. Two years
seems a reasonable period of time to revive those claims.
Finally, the author proposes to amend the bill in Committee to
add an urgency clause, so that the measure will take effect
immediately and allow affected claimants to proceed immediately.
This change is reflected in the amendments proposed below.
Proposed Committee Amendment:
- On page 2 line 31 delete "2020" to and insert 2013.
Proposed Author Amendments :
- In line 2 of the title, after "Genocide" insert:
, and declaring the emergency thereof, to take effect
immediately
- On page 2, below line 35, insert:
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SEC. 2. This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety
within the meaning of Article IV of the Constitution and shall
go into immediate effect. The facts constituting the
necessity are:
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.
ARGUMENTS IN SUPPORT : According to the Consumer Attorneys of
California, extending the deadline for filing a cause of action
"will assist �Armenian Genocide] victims in their efforts to
seek justice through our legal system." AFSCME writes in
support of this bill: "Given the scope of an atrocity like the
Armenian Genocide, the equitability of a statute of limitation
on legal actions is difficult to determine." Extending the
deadline, AFSCME believes, will allow "more time for Armenian
Genocide victims in the state, and their heirs or beneficiaries,
to build cases, find materials, and take legal action."
ARGUMENTS IN OPPOSITION : The Turkish Peace and Justice
Committee of California (TP&J) opposes this bill for two
reasons. First, TP&J claims that Armenian victims and their
families already received a $20 million settlement with New York
Life Insurance and a $17 million settlement with the French
insurer AXA in 2005. Second, TP&J claims that "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," and therefore it is "shocking to
see CA lawmakers disregarding U.S. interests at a most vital
time for our economic recovery and national security."
REGISTERED SUPPORT / OPPOSITION :
Support
AFSCME
Consumer Attorneys of California
Opposition
Turkish Peace and Justice Commission of California
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Analysis Prepared by : Thomas Clark / JUD. / (916) 319-2334