Archive for Tuesday, June 24, 2003

Court rejects Holocaust victims insurance law

Justices say California meddling in foreign policy

June 24, 2003

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— The Supreme Court struck down a California law Monday that was intended to help Holocaust survivors collect on insurance policies from the Nazi era. The law's supporters said the ruling could result in further delays in payments.

The court, divided 5-4, ruled that the law amounted to unconstitutional meddling in foreign affairs by a state, siding with the Bush administration and insurers.

The case arose because of what California called a deliberate attempt to stonewall elderly Holocaust survivors or heirs who inquired about dormant policies. The state wanted every insurer doing business in California to turn over records of Holocaust-era insurance policies or risk losing its license to operate in the state.

Justice David Souter wrote for the majority that California's approach, which he termed an iron fist, might be more effective than the "kid gloves" employed by U.S. presidents.

But, he wrote, "Our business is not to judge the wisdom of the national government's policy. Dissatisfaction should be addressed to the president or, perhaps, Congress."

Chief Justice William H. Rehnquist and Justices Sandra Day O'Connor, Anthony M. Kennedy and Stephen Breyer joined Souter.

Justice Ruth Bader Ginsburg, with Breyer one of two Jewish justices on the court, read a tart dissent from the bench.

"The judiciary has no warrant to serve as an expositor of the nation's foreign policy" by trumping a state law this way, Ginsburg said.

David Lash, executive director of Bet Tzedek Legal Services in Los Angeles, said that far from meddling, the California law, similar measures in other states and lawsuits had provided the impetus, lacking for decades, for insurance companies to begin to act. Bet Tzedek has hundreds of clients in Los Angeles County with insurance claims, Lash said.

Dr. Jack Brauns, a Holocaust survivor, stands by a photograph of
his father Moses Brauns. The Supreme Court struck down a California
law intended to help Holocaust survivors collect on insurance
policies. Moses Brauns owned such a policy.

Dr. Jack Brauns, a Holocaust survivor, stands by a photograph of his father Moses Brauns. The Supreme Court struck down a California law intended to help Holocaust survivors collect on insurance policies. Moses Brauns owned such a policy.

"It took them 50 years to start moving. I don't think it was a coincidence," Lash said. "Without the continued pressure of the American judicial system, we'll see how far they continue to go."

California Insurance Commissioner John Garamendi described Monday's ruling as a major setback. He said the decision should prompt the Bush administration to do more to help Holocaust victims and their heirs.

Legislation written by Sen. Norm Coleman, R-Minn., and Rep. Mark Foley, R-Fla., and another bill introduced by Rep. Henry Waxman, D-Calif., are aimed at forcing insurance companies to disclose their Holocaust-era policies.

Fifty-two members of Congress and several state insurance commissioners sided with California.

The 1999 law required companies that sold insurance policies in Europe from 1920 to 1945, and which are now affiliated with insurance companies in California, to search their records for details of the old policies. The information would go into a public registry. Companies that refused to divulge information could lose their state licenses.

The Bush administration said Holocaust-era claims against foreign insurance companies should be processed through an international commission established in 1998. An agreement signed last fall sets aside $275 million to settle claims.

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