Movsesian v. Versicherung Ag ( 2009 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
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, No. 07-56722
Plaintiffs-Appellees,
v.  D.C. No. CV-03-
09407-CAS-JWJ
VICTORIA VERSICHERUNG AG, a OPINION
German corporation; ERGO
VERSICHERUNGSGRUPPE AG, a
German corporation,
Defendants,
and
MUNCHENER RUCKVERSICHERUNGS-
GESELLSCHAFT AKTIENGESELLSCHAFT
AG, a German corporation,
Defendant-Appellant.

Appeal from the United States District Court
for the Central District of California
Christina A. Snyder, District Judge, Presiding
Argued and Submitted
December 8, 2008—Pasadena, California
Filed August 20, 2009
11415
11416 MOVSESIAN v. VICTORIA VERSICHERUNG AG
Before: Harry Pregerson, Dorothy W. Nelson and
David R. Thompson, Circuit Judges.
Opinion by Judge Thompson;
Dissent by Judge Pregerson
11418 MOVSESIAN v. VICTORIA VERSICHERUNG AG
COUNSEL
Neil Michael Soltman, Los Angeles, California, for the defen-
dant/appellant.
Brian S. Kabateck, Los Angeles, California, for the plain-
tiffs/appellees.
MOVSESIAN v. VICTORIA VERSICHERUNG AG 11419
OPINION
THOMPSON, Senior Circuit Judge:
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 interferes with
the national government’s conduct of foreign relations. We
conclude that it does, and accordingly, we hold that the Cali-
fornia statute is preempted. The district court’s order denying
the Rule 12(b)(6) motion to dismiss is reversed.
I. Background
In 2000, the California Legislature enacted Senate Bill
1915, which amended California’s Code of Civil Procedure to
provide California courts with jurisdiction over certain classes
of claims arising out of insurance policies that were held by
“Armenian Genocide vitcim[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 perse-
cution during that period.
(2) “Insurer” means an insurance provider doing
business in the state, or whose contacts in the state
11420 MOVSESIAN v. VICTORIA VERSICHERUNG AG
satisfy the constitutional requirements for jurisdic-
tion, that sold life, property, liability, health, annui-
ties, 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 pol-
icy 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 com-
petent 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 bene-
ficiary 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 limi-
tation, 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 provi-
sions or applications that can be given effect without
the invalid provision or application.
In the legislative findings accompanying the statute, the Leg-
islature provides formal recognition to an “Armenian Geno-
cide”:
MOVSESIAN v. VICTORIA VERSICHERUNG AG 11421
The Legislature recognizes that during 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 Geno-
cide.
Sen. Bill No. 1915 at § 1.
Section 354.4 was modeled after §§ 354.5 and 354.6, which
extended the statute of limitations until 2010 for Holocaust-
era insurance claims and World War II slave labor claims,
respectively. Sen. Jud. Com., analysis of Sen. Bill No. 1915
(1999-2000 Reg. Sess.) May 9, 2000, pp. 2, 4. Both of these
sister statutes have been found unconstitutional, because they
interfered with the national government’s foreign affairs
power. Deustch v. Turner, 324 F.3d 692, 716 (9th Cir. 2003)
(finding § 354.6 unconstitutional); Steinberg v. Int. Comm. on
Holocaust Era Ins. Claims, 34 Cal. Rptr. 3d 944, 953 (Cal.
Ct. App. 2005) (finding § 354.5 unconstitutional).
In December 2003, Vazken Movsesian (“Movsesian”) filed
this class action against Victoria Verisherung AG
(“Victoria”), Ergo Verischerungsgruppe AG (“Ergo”), and
Munchener Ruckverischerungs-Gesellschaft Aktiengesell-
schaft (“Munich Re”). Movsesian and his fellow class mem-
bers 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
11422 MOVSESIAN v. VICTORIA VERSICHERUNG AG
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 chal-
lenge, and held that § 354.4 was not preempted under the for-
eign 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.
On appeal, the parties address three issues: first, whether
§ 354.4 is preempted under the foreign affairs doctrine; sec-
ond, whether Munich Re is a proper defendant; and third,
whether the Plaintiff-Appellees have standing to bring these
claims.1 We conclude that § 354.4 impermissibly infringes on
the federal government’s foreign affairs power, and is pre-
empted. We do not reach the other issues.
On December 4, 2008, our court received a letter from the
Turkish Ambassador via facsimile. Letter from Nabi Sensoy,
the Turkish Republic’s Ambassador to the United States, to
Molly Dwyer, Clerk of the United States Court of Appeals for
the Ninth Circuit (December 4, 2008). The letter expresses
Turkey’s opposition to § 354.4, and urges the court to over-
turn the California statute. At oral argument, Munich Re
1
Neither party addresses the due process issue on appeal.
MOVSESIAN v. VICTORIA VERSICHERUNG AG 11423
asked us to take judicial notice of the letter; Movsesian
objected.
We decline to take judicial notice of the letter, because the
letter was submitted after -and apparently in response to- the
district court’s decision. See, e.g., Ctr. for Bio-Ethical
Reform, Inc. v. City and County of Honolulu, 455 F.3d 910,
918 n.3 (2006) (declining to take judicial notice of documents
issued after the district court’s decision). Even if we did take
notice of the letter, however, it would not alter our decision
in this case.
II. Standard of Review
Appellate jurisdiction under § 1292(b) “applies to the order
certified to the court of appeals, and is not tied to the particu-
lar question formulated by the district court.” Yamaha Motor
Corp., USA v. Calhoun, 516 U.S. 199, 205 (1996). We have
jurisdiction to decide all questions “fairly raised” by the issue
under review. Lee v. Am. Nat. Ins. Co., 260 F.3d 997, 1000-
01 (9th Cir. 2001). We will not address issues outside the
order appealed from, or issues not yet considered by the dis-
trict court. Life Ins. Co. v. Reichardt, 591 F.2d 499, 505-06
(9th Cir. 1979).
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). All well-pleaded factual alle-
gations are to be construed in the light most favorable to the
pleader, and accepted as true. Bell Atlantic Corp. v. Twombly,
550 U.S. 544, ___, 127 S. Ct. 1955, 1965 (2007); Johnson v.
Riverside Healthcare System, 534 F.3d 1116, 1122 (9th Cir.
2008). Ultimately, “when the allegations in a complaint, how-
ever true, could not raise a claim of entitlement to relief, this
basic deficiency should . . . be exposed at the point of mini-
mum expenditure of time and money by the parties and the
court.” Twombly, 550 U.S. at ____, 127 S. Ct. at 1966 (inter-
nal quotation marks omitted).
11424 MOVSESIAN v. VICTORIA VERSICHERUNG AG
III. The Constitutionality of § 354.4 Under the Foreign
Affairs Doctrine
This case presents the issue whether § 354.4 of the Califor-
nia Code of Civil Procedure interferes with the national gov-
ernment’s power to conduct foreign affairs. Munich Re
contends that § 354.4 is preempted under the foreign affairs
doctrine in two ways: first, that it is preempted by the Claims
Agreement of 1922, and the War Claims Act of 1928; and
second, that it conflicts with the Executive Branch’s policy
prohibiting legislative recognition of an “Armenian Geno-
cide.” We conclude that § 354.4 conflicts with Executive
Branch foreign policy, and thus, is preempted. We need not
decide the questions whether § 354.4 is preempted by the
Claims Agreement or the War Claims Act.
[1] The Supreme Court has long recognized that the Execu-
tive Branch’s foreign policy preferences are entitled to pre-
emptive weight when they take the form of executive
agreements. See, e.g., Dames & Moore v. Regan, 453 U.S.
654 (1981); United States v. Pink, 315 U.S. 203 (1941);
United States v. Belmont, 301 U.S. 324 (1937). In Garamendi,
the Supreme Court recognized for the first time that “presi-
dential foreign policy” itself may carry the same preemptive
force as a federal statute or treaty. Am. Ins. Assoc. v. Gara-
mendi, 539 U.S. 396, 421 (2003). Unlike in previous cases,
the presidential foreign policy was not contained in a single
executive agreement. Instead, the policy was “embod[ied]” in
several executive agreements, as well as in various letters and
statements from executive branch officials at congressional
hearings. Id. at 421-23. In sum, the Court held that in the
realm of foreign affairs, “[t]he exercise of the federal execu-
tive authority means that state law must give way where . . .
there is evidence of clear conflict between the policies
adopted by the two.” Id.[2] To determine whether California’s Holocaust Victims
Insurance Relief Act (HVIRA) was preempted by presidential
MOVSESIAN v. VICTORIA VERSICHERUNG AG 11425
foreign policy, the Garamendi Court employed a traditional
conflict preemption analysis. Id. at 420-27. First, the Court
considered whether there was an “express federal policy” on
point. Id. at 420-25. Next, the Court analyzed whether the
California statutory scheme posed a “clear conflict.” Id. at
425-27. Here, just as in Garamendi, the “question relevant to
preemption in this case is conflict.” And just as in Garamendi,
“the evidence here is more than sufficient to demonstrate that
the state Act stands in the way of [the President’s] diplomatic
objectives.” Id. at 427 (citing Crosby v. Nat’l Foreign Trade
Council, 530 U.S. 363, 386 (2000)).
1. Express Federal Policy
[3] Munich Re contends that presidential foreign policy
prohibits legislative recognition of an “Armenian Genocide,”
and that this policy preempts § 354.4. In support of this argu-
ment, Munich Re points to several failed House Resolutions,
H. R. Res. 106, 110th Congress (2007); H. R. Res. 193, 108th
Congress (2003); H. R. Res. 596, 106th Congress (2000).
Each of these resolutions formally recognized the “Armenian
Genocide.” Each time, the Administrations of President Bush
and President Clinton took specific action, privately and pub-
licly, to defeat these measures.
a. House Resolution 596
House Resolution 596, entitled “Affirmation of the United
States Record on the Armenian Genocide Resolution,”
“[c]all[ed] upon the President to ensure that the foreign policy
of the United States reflects appropriate understanding and
sensitivity concerning issues related to human rights, ethnic
cleansing, and genocide documented in the United States
record relating to the Armenian Genocide, and for other pur-
poses.” H. R. Res. 596, 106th Cong. (2000). In support of the
Resolution, the House passed a number of legislative findings,
including the following:
11426 MOVSESIAN v. VICTORIA VERSICHERUNG AG
The Armenian Genocide was conceived and carried
out by the Ottoman Empire from 1915 to 1923,
resulting in the deportation of nearly 2,000,000
Armenians, of whom 1,500,000 men, women, and
children were killed, 500,000 survivors were
expelled from their homes, and which succeeded in
the elimination of the over 2,500-year presence of
Armenians in their historic homeland.
Id. at § 2(1). In all, the Resolution uses the phrase “Armenian
Genocide” at least twenty-four times.
President Clinton personally expressed his opposition to the
Resolution in a letter to Speaker Hastert. Letter to the Speaker
of the House of Representatives on a Resolution on Armenian
Genocide, 3 Pub. Papers 2225-26 (Oct. 19, 2000). The Presi-
dent explained the potential negative impact the Resolution
would have on the nation’s foreign policy interests:
[I] am deeply concerned that consideration of H.
Res. 596 at this time could have far-reaching nega-
tive consequences for the United States. We have
significant interests in this troubled region of the
world: containing the threat posed by Saddam Hus-
sein; working for peace and stability in the Middle
East and Central Asia; stabilizing the Balkans; and
developing new sources of energy. Consideration of
the resolution at this sensitive time will not only neg-
atively affect those interests, but could undermine
efforts to encourage improved relations between
Armenia and Turkey—the very goal the Resolution’s
sponsors seek to advance.
Id. In sum, President Clinton urged the Speaker “in the
strongest terms not to bring this Resolution to the floor at this
time.” Id.
In addition, several senior-level Administration officials
sent letters to the Chairman of the Committee on International
MOVSESIAN v. VICTORIA VERSICHERUNG AG 11427
Relations, reiterating the Administration’s opposition to the
Resolution. H.R. Rep. No. 106-933, at 16-19 (2000). The
Assistant Secretary of State expressed the Administration’s
belief that “legislative measures” were not the appropriate
means of addressing the “sensitive issue” raised in the Reso-
lution. Id. at 17. The Secretary of Defense and the Undersec-
retary of Defense underscored the Administration’s concern
that the Resolution “would complicate our efforts to build
relationships and protect our interests in the region and sus-
tain our positive relationship with a key, strategically placed
ally.” Id. at 16-18. The Resolution was reported out of com-
mittee, but never brought to a vote on the floor.
b. House Resolution 193
In 2003, a general resolution “reaffirming support of the
Convention on the Prevention and Punishment of the Crime
of Genocide” was introduced in the House. H.R. Res. 193,
108th Cong. (2003). Unlike the other two resolutions dis-
cussed in this section, House Resolution 193 did not contain
any legislative findings, or even any reference to Turkey or
the Ottoman Empire. Nevertheless, the Bush Administration
strongly opposed it. The Administration’s opposition to
House Resolution 193 was based solely on two words found
in the resolution: “Armenian Genocide.” An official from the
State Department explained:
I am writing to express the Administration’s opposi-
tion to the wording of H. Res. 193 of April 10, 2003
. . . . [W]e oppose HR 193’s reference to the ‘Arme-
nian Genocide.’ Were this wording adopted it could
complicate our efforts to bring peace and stability to
the Caucasus and hamper ongoing attempts to bring
about Turkish-Armenian reconciliation. We continue
to believe that fostering a productive dialogue on
these events is the best way for Turkey and Armenia
to build a positive and productive relationship. Dec-
11428 MOVSESIAN v. VICTORIA VERSICHERUNG AG
larations such as this one, however, hinder rather
than encourage the process.
H.R. Rep. No. 108-130, at 5-6 (2003). The Bush Administra-
tion echoed the Clinton Administration’s belief that “legisla-
tion on the issue is counterproductive.” Id. at 6. This time, the
Resolution was reported out of committee and calendered, but
was never actually brought to a vote on the floor.
c. House Resolution 106
In 2007, the House entertained yet another resolution that
would provide official recognition to an “Armenian Geno-
cide.” House Resolution 106 was nearly indistinguishable
from House Resolution 596, discussed above. The Bush
Administration renewed its opposition to legislative recogni-
tion of an “Armenian Genocide” through a joint letter from
Secretary of State Condoleeza Rice and Secretary of Defense
Robert Gates to Speaker Nancy Pelosi. Letter from Con-
doleeza Rice, Sec’y of State, and Robert M. Gates, Sec’y of
Defense, to Nancy M. Pelosi, Speaker of the House of Repre-
sentatives (March 7, 2001). The Secretaries sent an identical
letter to the Minority Leader of the House, Representative
John Boehner. Letter from Condoleeza Rice, Sec’y of State,
and Robert M. Gates, Sec’y of Defense, to John A. Boehner,
Minority Leader of the House of Representatives (March 7,
2001).
In their joint letter, the Secretaries underscored the impor-
tance of Turkey’s contributions to the war in Iraq. See Letter
from Condoleeza Rice and Robert Gates to Nancy Pelosi,
supra, at 2. The Secretaries noted that when the French
Assembly voted in favor of a similar bill, the Turkish military
cut off contact with the French military and terminated
defense contracts under negotiation. Id. The Secretaries
warned that “[a] similar reaction by the Government of Tur-
key to a House resolution could harm American troops in the
field, constrain our ability to supply our troops in Iraq and
MOVSESIAN v. VICTORIA VERSICHERUNG AG 11429
Afghanistan, and significantly damage our efforts to promote
reconciliation between Armenia and Turkey[.]” Id. In conclu-
sion, the Secretaries “strongly urge[d] [the Speaker] to refrain
from allowing the resolution to reach the House floor.” Id.
Despite the Secretaries’ exhortations, the House Committee
on Foreign Affairs passed a motion to order the bill reported.
H.R. Res. 106, 110th Cong. (as reported by H. Comm. on For-
eign Aff., Oct. 10, 2007). In response, President Bush made
the following statement:
On another issue before Congress, I urge members to
oppose the Armenian genocide resolution now being
considered by the House Foreign Affairs Committee.
We all deeply regret the tragic suffering of the
Armenian people that began in 1915. This resolution
is not the right response to these historic mass kill-
ings, and its passage would do great harm to our
relations with a key ally in NATO and in the global
war on terror.
Press Release, White House Office of the Press Secretary,
President Bush Discusses Foreign Intelligence Surveillance
Act Legislation (Oct. 10, 2007).
Following President Bush’s statements, no further action
was taken on the Resolution.
d. Emergence of the Express Policy
[4] The foregoing account of negotiations between the
Executive Branch and Congress, and the public statements
and letters of two Presidents, clearly establish a presidential
foreign policy preference against providing legislative recog-
nition to an “Armenian Genocide.” The Garamendi Court
relied on similar communications between the Administration
and state legislative and executive officials, in addition to sev-
11430 MOVSESIAN v. VICTORIA VERSICHERUNG AG
eral executive agreements, in finding that HVIRA was pre-
empted. Garamendi, 539 U.S. at 408-11.
Unlike the presidential foreign policy at issue in Gara-
mendi, the presidential foreign policy in the present case is
not embodied in any executive agreement. This does not,
however, detract from the policy’s preemptive force. The
executive agreements discussed in Garamendi did not apply
to all of the claims at issue, so they could not have been cen-
tral to the Court’s finding of preemption in that case. Id. at
417.
Furthermore, the preemptive power of the federal policy is
not derived from the form of the policy, but rather from the
source of the executive branch’s authority to act. Presidential
foreign policy only carries preemptive weight when the exec-
utive authority is validly exercised — as measured by the tri-
partite framework set forth by Justice Jackson in Youngstown.
Medellín v. Texas, 552 U.S. ___, ___, 128 S. Ct. 1346, 1369-
72 (2008) (citing Youngstown Sheet & Tube Co. v. Sawyer,
343 U.S. 579, 635 (1952) (Jackson, J., concurring)). In prior
cases where the presidential policy at issue implicated crimi-
nal law (an area traditionally left to the states to regulate), or
foreign commerce (an area delegated by the Constitution to
Congress), the Court has refused to accord the policy preemp-
tive effect. See, e.g., Medellín, 128 S. Ct. at 1369-72; Bar-
clays Bank PLC v. Franchise Tax Bd. of Cal., 512 U.S. 298,
329-30 (1994). Here, however, the presidential policy con-
cerns national security, a war in progress, and diplomatic rela-
tions with a foreign nation. The Constitution squarely, if not
solely, vests these powers with the Executive Branch. U.S.
Const. art. II, § 2, cl. 1; id. at § 2, cl. 2; id. at § 3; see also
Medellín, 128 S. Ct. at 1367 (holding that the President has
the “lead role” in making “sensitive foreign policy deci-
sions”); Garamendi, 539 U.S. at 414; Deutsch, 324 F.3d at
708-09 (enumerating the foreign affairs powers delegated by
the Constitution to the President).
MOVSESIAN v. VICTORIA VERSICHERUNG AG 11431
[5] The President acts well within his constitutionally dele-
gated powers by developing and enforcing the policy refusing
to provide official recognition to an “Armenian Genocide.”
Accordingly, the presidential policy is entitled to preemptive
effect. See, e.g., Medellín, 128 S. Ct. at 1367 n.13, 1367-71
(suggesting that the President, in the exercise of his Article II
powers, could take action which preempts conflicting state
law, but refusing to find such preemption in that case); cf.
Barclays Bank PLC, 512 U.S. at 330 (“Executive Branch
communications that express federal policy but lack the force
of law cannot render unconstitutional California’s otherwise
valid, congressionally condoned, use of worldwide combined
reporting.”).
Even if the policy implicated a power shared by the Presi-
dent and Congress, Congress’s documented deference in this
case lends the presidential policy additional authority. See
Medellín, 128 S. Ct. at 1368; Youngstown, 343 U.S. at 637.
The President and his senior officials lobbied Congress, pri-
vately and publicly, to implement the policy. Each time, Con-
gress deferred to the President’s authority, and did not bring
the Resolution to a vote. Under the Youngstown framework,
this congressional acquiescence infuses the President’s
authority to act with additional support. See Medellín, 128 S.
Ct. at 1368; Youngstown, 343 U.S. at 637.
[6] In sum, we conclude there is an express federal policy
prohibiting legislative recognition of an “Armenian Geno-
cide,” as embodied in the previously mentioned statements
and letters of the President and other high-ranking Executive
Branch officials. This policy is a valid exercise of the Presi-
dent’s Article II powers. In light of this, and in light of Con-
gress’s deference to the Executive Branch on this matter, the
policy is entitled to preemptive weight.
2. Clear Conflict
We next consider whether § 354.4 clearly conflicts with the
presidential foreign policy prohibiting legislative recognition
11432 MOVSESIAN v. VICTORIA VERSICHERUNG AG
of an Armenian Genocide. We conclude that it does. The con-
flict is clear on the face of the statute: by using the phrase
“Armenian Genocide,” California has defied the President’s
foreign policy preferences.
[7] The language of the California statute is very similar to
that of the failed House Resolutions. The California Legisla-
ture made the following findings in support of § 354.4:
The Legislature recognizes that during 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 Geno-
cide.
This language closely parallels the legislative findings in
House Resolutions 596 and 106, which the Executive Branch
vehemently opposed. Section 354.4 implicates the same con-
cerns raised by the Executive Branch in response to these res-
olutions.
[8] Movsesian contends that given § 354.4’s severability
provision, the constitutionality of § 354.4(c) should be ana-
lyzed distinctly. Even assuming subsection (c) could be sepa-
rated from the constitutional deficiencies underlying the rest
of the statute, the subsection would still conflict with the fed-
eral policy at issue. Section 354.4(c) contains two references
to the “Armenian Genocide.” As discussed above, the Execu-
tive Branch opposed House Resolution 193 simply because it
contained the phrase “Armenian Genocide.” The heart of
§ 354.4’s conflict with the presidential foreign policy lies in
these two words. By choosing to use the words “Armenian
Genocide,” § 354.4 directly contradicts the President’s
express foreign policy preference.
Movsesian ridicules the idea that two words could have
such a “talismanic” effect. The symbolic effect of the words,
MOVSESIAN v. VICTORIA VERSICHERUNG AG 11433
however, is precisely the problem. 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. Whether or not California agrees with
this decision, it may not contradict it. See Garamendi, 539
U.S. at 427. When it comes to dealings with foreign nations,
“state lines disappear.” Belmont, 301 U.S. at 331. California
may not assert a “distinct juristic personality.” Pink, 315 U.S.
at 230.
If § 354.4 provoked Turkey’s ire, it is the nation as a whole
— not just California — that would suffer. “If state action
could defeat or alter our foreign policy, serious consequences
might ensue. The nation as a whole would be held to answer
if a State created difficulties with a foreign power.” Pink, 315
U.S. at 232. The Bush Administration warned that American
recognition of an “Armenian Genocide” could endanger
America’s alliance with Turkey, and thus, our troops on the
ground in Iraq. See Letter from Condoleeza Rice and Robert
Gates to Nancy Pelosi, supra at 2.
[9] Section 354.4 also threatens to undermine the Executive
Branch’s diplomatic relations with Turkey. States may not
“compromise the very capability of the President to speak for
the nation with one voice in dealing with other governments.”
Garamendi, 539 U.S. at 424. Here, § 354.4 “undercuts the
President’s diplomatic discretion and the choice he has made
in exercising it.” Id. at 423-24.
In Garamendi and Crosby, the Court struck down state stat-
utes which undermined the President’s diplomatic discretion.
Id.; Crosby v. Nat’l Foreign Trade Council, 530 U.S. 363(2000). By providing explicit recognition to the “Armenian
Genocide,” § 354.4 threatens to have the same deleterious
effect. The Executive Branch chose to address the issue
through the medium of presidential speeches, not legislation:
“The President believes that the proper way to address this
issue and express our feelings about it is through the presiden-
11434 MOVSESIAN v. VICTORIA VERSICHERUNG AG
tial message and not through legislation . . . . What [President
Bush] wants is for the presidential message to be the thing
that stands for the American response to this, not legislation
passed by the House of Representatives.” See Press Release,
White House Office of the Press Secretary, Press Briefing by
Dana Perino (Oct. 11, 2007). California has done what Con-
gress declined to do: it has defied the President’s foreign pol-
icy preferences, and has undermined the President’s
diplomatic power.
Finally, we must address the district court’s conclusion that
the presidential policy prohibiting Congress from recognizing
an “Armenian Genocide” does not apply to individual states.
In support of this conclusion, the district court noted that
thirty-nine other states have passed legislation recognizing the
“Armenian Genocide,” and neither the federal government
nor Turkey expressed any opposition to these state statutes.
The district court’s reasoning is not persuasive for several
reasons. First, legislation enacted by other states is irrelevant
to the question of whether § 354.4 is preempted by presiden-
tial foreign policy. Furthermore, there is no citation or evi-
dence in the record of these other thirty-nine state statutes
which purportedly reference the “Armenian Genocide.”
Second, the fact that the federal government has not
expressly prohibited states from using the phrase “Armenian
Genocide” is not outcome-determinative. In Deutsch, this
court rejected a similar argument, and refused to recognize a
private cause of action for war injuries. Though the relevant
treaties did not expressly prohibit such actions, the Deutsch
court held that “[w]ithout [explicit] authorization, states lack
the power to alter the federal government’s resolution of dis-
putes relating to the war.” Deutsch, 324 F.3d at 714. Though
the instant case does not concern war injuries and reparations,
Deutsch‘s reasoning is still applicable. The power to conduct
diplomatic relations and negotiations, like the war powers, is
vested exclusively with the federal government. U. S. Const.
MOVSESIAN v. VICTORIA VERSICHERUNG AG 11435
art. I, § 8; id. at art. II, § 3. Absent explicit authorization,
states may not modify or alter the nation’s foreign policy.
Deutsch, 324 F.3d at 713-14.
[10] In sum, § 354.4 conflicts with the Executive Branch’s
clearly expressed foreign policy refusing to provide official
legislative recognition to the “Armenian Genocide.” The
Executive Branch policy is entitled to preemptive weight,
because the Executive has the authority to make this policy,
and Congress has deferred to the Executive’s will in this mat-
ter. Section 354.4 impermissibly impairs the President’s abil-
ity to speak with one voice for the nation in the realm of
foreign affairs, and undermines his diplomatic authority.
As in Garamendi, the express presidential foreign policy
and the clear conflict raised by § 354.4 are “alone enough to
require state law to yield.” Garamendi, 539 U.S. at 425. The
Garamendi Court, however, went on to consider the strength
of California’s interest in enacting HVIRA, observing: “If any
doubt about the clarity of the conflict remained . . . it would
have to be resolved in the National Government’s favor, given
the weakness of the State’s interest.” Id. Accordingly, we will
also address the strength of California’s interest in enacting
§ 354.4.
3. California’s Interest in § 354.4
[11] The district court erroneously held that § 354.4 was
within the state’s traditional area of competence because it
was a procedural rule extending the statute of limitations and
reviving previously barred claims. We explicitly rejected this
reasoning in Deutsch. Deutsch, 324 F.3d at 707 (repudiating
Appellants’ attempts to “characterize Section 354.6 as a
purely procedural measure”). Nor is the statute saved by
Movsesian’s attempts to characterize § 354.4 as quotidian
insurance regulation. See Garamendi, 539 U.S. at 425-26(rejecting purported state interest in regulating insurance busi-
ness and blue sky laws).
11436 MOVSESIAN v. VICTORIA VERSICHERUNG AG
Courts have consistently looked past “superficial” state
interests to ascertain true legislative intent. See, e.g., Gara-
mendi, 539 U.S. at 425-26 (rejecting purported state interest
in regulating insurance business and blue sky laws); Crosby,
530 U.S. 363 (rejecting purported state interest in taxing and
spending); Zschernig v. Miller, 389 U.S. 429, 437-38 (1968)
(rejecting purported state interest in regulating descent of
property); Deutsch, 324 F.3d at 707 (rejecting purported state
interest in procedural rules).
[12] Here, as in Deutsch and Garamendi, California’s “real
desiderata” is to provide a forum for the victims of the “Ar-
menian Genocide” and their heirs to seek justice. Garamendi,
539 U.S. at 425; Deutsch, 324 F.3d at 707. By opening its
doors as a forum to all “Armenian Genocide” victims and
their heirs and beneficiaries, California expresses its dissatis-
faction with the federal government’s chosen foreign policy
path. Garamendi and Deutsch clearly hold that this is not a
permissible state interest. Garamendi, 539 U.S. at 427;
Deutsch, 324 F.3d at 712.
IV. Conclusion
[13] California Code of Civil Procedure § 354.4 is pre-
empted because it directly conflicts with the Executive
Branch’s foreign policy refusing to provide official recogni-
tion to the “Armenian Genocide.” Far from concerning an
area of traditional state interest, § 354.4 impinges upon the
National Government’s ability to conduct foreign affairs. The
district court’s order denying the Rule 12(b)(6) motion to dis-
miss is REVERSED. This cause is REMANDED to the dis-
trict court for further proceedings consistent with this opinion.
PREGERSON, Circuit Judge, dissenting:
The majority holds that California’s attempt to regulate
insurance does not fall within the realm of traditional state
MOVSESIAN v. VICTORIA VERSICHERUNG AG 11437
interests. I disagree. The legislative findings accompanying
California Code of Civil Procedure § 354.4 recognize that
thousands of California residents and citizens have often been
deprived of their entitlement to benefits under certain insur-
ance policies. S. 1915, 1999-2000 Reg. Sess. (Cal. 2000) at
§ 1(b). “States have broad authority to regulate the insurance
industry.” Am. Ins. Ass’n v. Garamendi, 539 U.S. 395, 434
n.1 (2003) (Ginsberg, J. dissenting) (citation omitted). Cali-
fornia has not exceeded that authority merely by “assigning
special significance to an insurer’s treatment arising out of
a[ ] [particular] era . . . .” Id. California’s interest in ensuring
that its citizens are fairly treated by insurance companies over
which the State exercises jurisdiction is hardly a superficial
one.
The strength of this traditional state interest weighs against
preemption in a case, such as the case before us, where there
is doubt about the clarity of the conflict between state law and
federal policy. Indeed, there is no conflict. I can find no evi-
dence of any express federal policy forbidding states from
using the term “Armenian Genocide.” The majority accurately
states that the “federal government has made a conscious
decision not to apply the politically charged label of ‘geno-
cide’ to the deaths of [ ] Armenians during World War I. Maj.
Op. at 11433. Nowhere, however, does the majority point to
any evidence of an express federal policy barring states from
so doing.
The majority’s reliance on Deutsch v. Turner, 324 F.3d 692(9th Cir. 2005), is misplaced. Whether California has, while
acting within its authority to regulate the insurance industry,
intruded upon the province of the federal government has no
bearing on the existence of, or conflict with, an express fed-
eral policy applicable to the states.
There is no express federal policy forbidding California
from using the term “Armenian Genocide” in the course of
exercising its traditional authority to regulate the insurance
11438 MOVSESIAN v. VICTORIA VERSICHERUNG AG
industry. Accordingly, I dissent. I would affirm the district
court.