Alex Bakalian v. Central Bank Rep. of Turkey , 932 F.3d 1229 ( 2019 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ALEX BAKALIAN; ANAIS No. 13-55664
HAROUTUNIAN; RITA MAHDESSIAN,
Plaintiffs-Appellants, D.C. No.
2:10-cv-09596-
v. DMG-SS
CENTRAL BANK OF THE REPUBLIC OF
TURKEY; T.C. ZIRAAT BANKASI,
Defendants-Appellees.
DAVID DAVOYAN, Administrator of No. 13-55742
the Estate of Garbis Tavit Davoyan;
HRAYR TURABIAN, individually on D.C. No.
behalf of all others similarly situated, 2:10-cv-05636-
Plaintiffs-Appellants, DMG-SS
v.
REPUBLIC OF TURKEY,
Defendant,
and
THE CENTRAL BANK OF THE
REPUBLIC OF TURKEY; T.C. ZIRAAT
BANKASI,
Defendants-Appellees.
2 BAKALIAN V. CENTRAL BANK OF TURKEY
ALEX BAKALIAN; RITA No. 13-55765
MAHDESSIAN; ANAIS HAROUTUNIAN,
Plaintiffs-Appellees, D.C. No.
2:10-cv-09596-
v. DMG-SS
CENTRAL BANK OF THE REPUBLIC OF
TURKEY; T.C. ZIRAAT BANKASI,
Defendants-Appellants.
DAVID DAVOYAN, Administrator of No. 13-55804
the Estate of Garbis Tavit Davoyan,
Deceased; HRAYR TURABIAN, D.C. No.
individually on behalf of all others 2:10-cv-05636-
similarly situated, DMG-SS
Plaintiffs-Appellees,
v. OPINION
REPUBLIC OF TURKEY,
Defendant,
and
THE CENTRAL BANK OF THE
REPUBLIC OF TURKEY; T.C. ZIRAAT
BANKASI,
Defendants-Appellants.
Appeal from the United States District Court
for the Central District of California
Dolly M. Gee, District Judge, Presiding
BAKALIAN V. CENTRAL BANK OF TURKEY 3
Argued and Submitted December 17, 2018
Pasadena, California
Filed August 8, 2019
Before: Kim McLane Wardlaw, Marsha S. Berzon,
and Andrew D. Hurwitz, Circuit Judges.
Opinion by Judge Hurwitz
SUMMARY *
Foreign Sovereign Immunities Act / Statute of
Limitations
The panel affirmed the district court’s dismissal as time-
barred of claims brought in 2010 against the Republic of
Turkey and two Turkish national banks, seeking
compensation for property taken from plaintiffs’ ancestors
during the Armenian Genocide, which took place from 1915
to 1923.
The court previously held unconstitutional a California
statute providing that any limitations period for suits arising
out of the Armenian Genocide would not expire until
December 31, 2016. Applying California law, the panel held
that, in the absence of the invalidated extension statute,
plaintiffs’ claims, brought under the Foreign Sovereign
Immunities Act, were barred by the statute of limitations for
*
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
4 BAKALIAN V. CENTRAL BANK OF TURKEY
claims of genocide, war crimes, and crimes against
humanity.
The panel explained that, because plaintiffs’ claims were
plainly time-barred, it did not address the substantial legal
questions the case posed concerning FSIA jurisdiction.
COUNSEL
Kathryn Lee Boyd (argued) and Thomas B. Watson,
McKool Smith Hennigan PC, Los Angeles, California;
Rajika L. Shah, Kristen L. Nelson, Schwarcz Rimberg Boyd
& Rader LLP, Los Angeles, California; Vartkes Yeghiayan,
Yeghiayan Law Corp. P.C., Glendale, California; Michael J.
Bazyler and Kristen L. Nelson, ALC Lawyers PC, Los
Angeles, California; for Plaintiffs-Appellants/Cross-
Appellees Alex Bakalian, Anais Haroutunian, and Rita
Mahdessian.
Mark J. Geragos (argued) and Tina Glandian, Los Angeles,
California; Stanley D. Saltzman and Adam M. Tamburelli,
Marlin & Saltzman LLP, Agoura Hills, California; Brian
Kabateck, Kabateck Brown Kellner LLP, Los Angeles,
California; Frank Pitre, John Thyken, and Ara
Jabagchourian, Cotchett Pitre & McCarthy LLP,
Burlingame, California; for Plaintiffs-Appellants/Cross-
Appellees David Davoyan and Hrayr Turabian.
Neil Michael Soltman (argued), Christopher P. Murphy, and
Matthew H. Marmolejo, Mayer Brown LLP, Los Angeles,
California; David Saltzman, Saltzman & Evinch PLLC,
Washington, D.C.; Charles Rothfeld, Mayer Brown LLP,
Washington, D.C.; for Defendants-Appellees/Cross-
Appellants.
BAKALIAN V. CENTRAL BANK OF TURKEY 5
OPINION
HURWITZ, Circuit Judge:
From 1915 to 1923, in what is often referred to as the
Armenian Genocide, the Ottoman Empire massacred,
forcibly expelled, or marched to death 1.5 million of its
Armenian citizens, seizing the property of the dead and
deported. 1 In 2010, the plaintiffs in these consolidated
actions, United States residents descended from victims of
the Genocide, sued the Republic of Turkey and two Turkish
national banks, seeking compensation for property taken
from their ancestors almost a century ago.
To avoid a time-bar on claims like these, California
adopted a statute in 2006 providing that any limitations
period for suits arising out of the Armenian Genocide would
not expire until December 31, 2016. Act of Sept. 25, 2006
(S.B. 1524), ch. 443, sec. 2, 2006 Cal. Stat. 3235–37
(codified at Cal. Civ. Proc. Code § 354.45). Under that
statute, the complaints in these cases were timely filed.
However, we subsequently held the California law
unconstitutional. See Movsesian v. Victoria Versicherung
AG, 670 F.3d 1067, 1076–77 (9th Cir. 2012) (en banc)
(finding preempted Cal. Civ. Proc. Code § 354.4, which
dealt with claims arising out of the Armenian Genocide
against insurers); Deirmenjian v. Deutsche Bank AG, 548 F.
1
See Comm’n on the Responsibility of the Authors of the War and
on Enf’t of Penalties, Violation of the Laws and Customs of War:
Reports of Majority and Dissenting Reports of American and Japanese
Members, annex I at 30, 34–35 (1919); see also Press Release, White
House, Statement by the President on Armenian Remembrance Day
2019 (Apr. 24, 2019), https://www.whitehouse.gov/briefings-
statements/statement-president-armenian-remembrance-day-2019/.
6 BAKALIAN V. CENTRAL BANK OF TURKEY
App’x 461, 463 (9th Cir. 2013) (finding § 354.45
preempted). In the absence of the invalidated extension
statute, the plaintiffs’ claims are plainly time-barred. We
affirm the district court’s dismissal of their complaints.
I. Background.
A. Facts. 2
During World War I, the Ottoman Empire began forcibly
relocating its Armenian subjects away from population
centers and into the desert, causing the deaths of over a
million ethnic Armenians. The Empire confiscated the real
property left behind by the victims of the Armenian
Genocide.
The Republic of Turkey, the successor to the Ottoman
Empire, commingled proceeds from the sale and use of the
confiscated property with its general treasury funds. The
plaintiffs allege that the defendants, the Central Bank of the
Republic of Turkey and T.C. Ziraat Bankasi (“the Banks”),
received the commingled funds as deposits from the Turkish
government and have refused to disgorge them.
B. The California Statute of Limitations.
In 2006, the California legislature determined that
existing state law did “not provide sufficient relief for
Armenian Genocide victims whose assets were deposited
with or held by financial institutions.” S. Judiciary Comm.,
Bill Analysis, S.B. 1524, 2005–2006 Leg., Reg. Sess. at 2
2
Because the district court granted the Banks’ motion to dismiss,
we take the well-pleaded allegations in the operative complaints as true.
Gregg v. Haw., Dep’t of Pub. Safety, 870 F.3d 883, 886–87 (9th Cir.
2017).
BAKALIAN V. CENTRAL BANK OF TURKEY 7
(Cal. Apr. 26, 2006) [hereinafter “2006 Committee Report”].
It therefore passed a law to ensure that actions “brought by
an Armenian Genocide victim” or her heirs, “seeking
payment for . . . looted assets, shall not be dismissed for
failure to comply with the applicable statute of limitation, if
the action is filed on or before December 31, 2016.” Cal.
Civ. Proc. Code § 354.45(c). The legislature expressly
recognized that in the absence of such a statute, such actions
would be time-barred. See S. Judiciary Comm., Bill
Analysis, S.B. 1915, 1999–2000 Leg., Reg. Sess. at 5–6
(Cal. May 10, 2000) (discussing “the revival of otherwise
time-barred suits” under § 354.4).
C. Procedural History.
This appeal involves two actions filed in 2010. In the
first, Alex Bakalian, Anais Haroutunian, and Rita
Mahdessian allege the Ottoman Empire expropriated 122.5
acres of their ancestors’ property during the Armenian
Genocide. Their suit against the Banks asserts unlawful
expropriation, unjust enrichment, and statutory interference
with property rights, and seeks imposition of a constructive
trust, an accounting of the looted assets, and declaratory
relief. In the second case, Garbis Davoyan and Hrayr
Turabian sue the Banks on behalf of themselves and a
putative class of descendants of Armenian property owners.
They also seek imposition of a constructive trust and an
accounting, and assert claims of breach of statutory trust,
unjust enrichment, and “human rights violations and
violations of international law.” 3
3
Both sets of plaintiffs also sued the Republic of Turkey. Turkey
initially defaulted, but the district court vacated the default when
8 BAKALIAN V. CENTRAL BANK OF TURKEY
The complaints assert two broad theories of recovery.
They first argue that the Ottoman Empire wrongfully
confiscated their ancestors’ property, depositing the rents
and proceeds in the Banks, and that a constructive trust
should therefore be imposed over those assets.
Alternatively, they allege that the Empire itself held the
property “in trust and for safekeeping on behalf of the
rightful Armenian owners” under Turkish “Abandoned
Property Laws,” and that the Banks have breached that trust
by not turning the proceeds over to the plaintiffs.
The Banks moved to dismiss for lack of subject matter
jurisdiction, asserting immunity as instrumentalities of the
Republic of Turkey under the Foreign Sovereign Immunities
Act (“FSIA”), 28 U.S.C. § 1603(a). In response, the
plaintiffs urged that immunity should be denied under the
expropriation and commercial activity exceptions to the
FSIA. Id. § 1605(a)(2)–(3). The Banks also moved for
judgment on the pleadings, arguing that the plaintiffs’ claims
were barred by the statute of limitations.
The district court dismissed both complaints. It found
the commercial activity exception inapplicable because the
Banks’ alleged conduct did not have a sufficiently direct
effect in the United States. And, because the Armenian
victims of the Genocide were subjects of the Ottoman
Empire, the court concluded that the expropriation exception
could apply only if the Empire had otherwise violated
international law by committing genocide. But, the court
held, determining whether the Ottoman Empire had
committed genocide was a non-justiciable “inherently
dismissing these actions. This appeal does not challenge the dismissal
of the actions against Turkey.
BAKALIAN V. CENTRAL BANK OF TURKEY 9
political question.” The court did not reach the statute of
limitations issue, which had been fully briefed by the parties.
The plaintiffs timely appealed, and we consolidated the
two cases.
II. Discussion.
We review a dismissal for lack of subject matter
jurisdiction and judgment on the pleadings de novo,
Arrington v. Wong, 237 F.3d 1066, 1069 (9th Cir. 2001),
“accepting all factual allegations in the complaint as true and
drawing all reasonable inferences in favor of the nonmoving
party,” Gregg, 870 F.3d at 886–87 (internal quotation marks
and citation omitted). To decide whether an action is time-
barred under that standard, we “must determine whether the
running of the statute is apparent on the face of the
complaint.” Huynh v. Chase Manhattan Bank, 465 F.3d 992,
997 (9th Cir. 2006) (internal quotation marks and citation
omitted).
We have already held, as noted above, that by “providing
relief and a friendly forum to a perceived class of foreign
victims,” California Code of Civil Procedure § 354.45
“intrudes on the federal government’s exclusive power to
conduct and regulate foreign affairs,” and is therefore
preempted. Movsesian, 670 F.3d at 1077; see Deirmenjian,
548 F. App’x at 463. The issue is therefore whether the
plaintiffs’ claims are facially time-barred in the absence of
that statute.
A. Choice of Law.
Because the plaintiffs assert statutory jurisdiction under
the FSIA, we apply federal common law choice of law rules
to determine the applicable statute of limitations. See
10 BAKALIAN V. CENTRAL BANK OF TURKEY
Chuidian v. Philippine Nat’l Bank, 976 F.2d 561, 564 (9th
Cir. 1992). We must apply the forum’s statute of limitations
unless (a) the forum would allow the claim;
(b) “maintenance of the claim would serve no substantial
interest of the forum;” and (c) “the claim would be barred
under the statute of limitations of a state having a more
significant relationship to the parties and the occurrence.”
Huynh, 465 F.3d at 997 (quoting Restatement (Second) of
Conflict of Laws § 142 (Am. Law Inst. 1988)); see also In
re Sterba, 852 F.3d 1175, 1179–80 (9th Cir. 2017). If the
forum’s law applies, we also apply its accrual and tolling
rules. See Hatfield v. Halifax PLC, 564 F.3d 1177, 1184 (9th
Cir. 2009).
The threshold question is therefore whether California
law would allow the plaintiffs’ claims. The longest arguably
applicable California statute of limitations is the ten-year
statute for claims of genocide, war crimes, and crimes
against humanity. Cal. Civ. Proc. Code § 354.8. 4 The
plaintiffs’ claims are thus time-barred unless they either
accrued in or were tolled until 2000.
4
The Davoyan plaintiffs cite California Code of Civil Procedure
§ 348, which provides no limitation on the time to file a claim to recover
bank deposits. But, § 348 “does not apply to actions in which the
underlying debtor-creditor relationship” between a bank and the
depositing customer “is absent.” Morse v. Crocker Nat’l Bank, 190 Cal.
Rptr. 839, 842 (Ct. App. 1983). This is plainly such a case. Indeed, in
extending the statute of limitations, the California legislature
acknowledged that § 348 does not apply to the plaintiffs’ claims. See
2006 Committee Report at 6 (recognizing that “Section 348 does not
address looted assets,” which were “not necessarily ‘deposited’ by
customers”).
BAKALIAN V. CENTRAL BANK OF TURKEY 11
B. Accrual of Claims.
“In the case of an involuntary trust the statute of
limitations begins to run, regardless of repudiation thereof,
from the time when the wrongful or fraudulent acts are
performed by the trustee, except that the statute is tolled as
to the owner of the property until he actually acquires
knowledge of the wrongful acts, or, by the exercise of
reasonable care, until he is charged with such notice.”
Wilkerson v. Seib, 127 P.2d 904, 907 (Cal. 1942) (en banc)
(quoting Truesdail v. Lewis, 115 P.2d 218, 221 (Cal. Ct.
App. 1941)). We assume for purposes of our accrual
analysis the truth of the plaintiffs’ allegations that either the
Ottoman Empire illegally seized the property of the
plaintiffs’ predecessors, or the Empire and the Banks placed
the property in trust under Turkish law but later illegally
refused to return it. If the initial expropriation was wrongful,
the plaintiffs’ claims accrued by 1923. If the property was
placed in trust, the plaintiffs acknowledge that “[l]aws
passed in 1928 and 1929 formally ended Turkey’s
disingenuous attempt at the restitution of immovable
property to its rightful Armenian owners.” Thus, the
plaintiffs’ predecessors should have known well more than
ten years ago that Turkey did not intend to return their
property.
The plaintiffs do not allege that any critical facts about
the expropriation have been discovered since 2000. See
Oeth v. Mason, 56 Cal. Rptr. 69, 72 (Ct. App. 1967). Nor do
they seek the return of a specific piece of personal property.
This case is therefore distinguishable from actions seeking
the return of particular items, like paintings, stolen in war
and only discovered years later in museums. See, e.g.,
Republic of Austria v. Altmann, 541 U.S. 677, 680–85
(2004). Indeed, such actions are governed by a different
12 BAKALIAN V. CENTRAL BANK OF TURKEY
California statute of limitations. Cal. Civ. Proc. Code
§ 338(c)(3)(A) (“[A]n action for the specific recovery of a
work of fine art . . . , in the case of unlawful taking or theft,
. . . shall be commenced within six years of the actual
discovery by the claimant . . . of both:” (i) “[t]he identity and
the whereabouts of the work of fine art;” and (ii) facts
indicating “that the claimant has a claim for a possessory
interest” in the art.).
C. Equitable Tolling.
Because the claims at issue accrued by the late 1920s,
these suits are timely only if the statute of limitations was
equitably tolled until 2000—a period of over seventy years.
Equitable tolling requires: (1) timely notice to the defendant
of the claim; (2) lack of prejudice to the defendant; and
(3) “reasonable and good faith conduct on the part of the
plaintiff.” Addison v. State, 578 P.2d 941, 943–44 (Cal.
1978).
We have no doubt that the survivors of the Ottoman
Empire’s atrocities experienced enormous hardships after
the seizure of their property. Indeed, we take as true the
allegations in the operative complaints that it “was
impossible for Plaintiffs’ predecessors to seek compensation
for their stolen property or focus on anything but rebuilding
their lives.” 5 But, these suits are brought not by the victims
of the Armenian Genocide, but rather by residents of the
United States long removed from its carnage, many of whose
predecessors relocated to this country decades ago. And the
5
Although California provides statutory tolling for plaintiffs unable
“to commence an action” “by reason of the existence of a state of war,”
Cal. Civ. Proc. Code § 354, that law covers only the period of active
hostilities or occupation. See In re Caravas’ Estate, 250 P.2d 593, 596–
97 (Cal. 1952) (en banc).
BAKALIAN V. CENTRAL BANK OF TURKEY 13
current plaintiffs do not allege any attempts to pursue these
claims judicially prior to 2010. See Long v. Forty Niners
Football Co., 244 Cal. Rptr. 3d 887, 892 (Ct. App. 2019)
(“Where a claim is time-barred on its face, the plaintiff must
specifically plead facts that would support equitable
tolling.”).
It is possible that the plaintiffs believed that any suit
against the Republic of Turkey or its instrumentalities would
have been futile until 1976, when Congress adopted the
FSIA and codified the doctrine of foreign sovereign
immunity and exceptions to that doctrine. But, even if we
assume that the plaintiffs’ claims were equitably tolled until
1976, the plaintiffs do not explain why they should be tolled
a further twenty-four years. Thus, even under the most
charitable of assumptions, as the California legislature
expressly recognized in passing § 354.45, the plaintiffs’
claims against the Banks are time-barred.
III. Conclusion.
Because we find the plaintiffs’ claims plainly time-
barred, we do not address the substantial legal questions
these cases pose concerning FSIA jurisdiction. We
acknowledge the Supreme Court’s directive that the
substantive issue of foreign sovereign immunity, which
implicates subject matter jurisdiction, should generally be
addressed “as near to the outset of the case as is reasonably
possible.” Bolivarian Republic of Venez. v. Helmerich &
Payne Int’l Drilling Co., 137 S. Ct. 1312, 1317 (2017). But,
we are nearly a decade past the outset of these cases, and the
Supreme Court has also stressed that “foreign sovereign
immunity’s basic objective” is “to free a foreign sovereign
from suit.” Id. That objective is ill-served by continuing a
difficult exploration—in the context of a clearly time-barred
action—about whether there is a “genocidal takings”
14 BAKALIAN V. CENTRAL BANK OF TURKEY
exception in the FSIA and, if so, whether the plaintiffs’
claims qualify under that exception. In particular, answering
that question would require us to decide whether to consider
the state of international law at the time of the taking or at
some later point, and whether at the relevant point in time
either genocide or a genocidal taking was a recognized
violation of international law. Nor would analyzing the
district court’s conclusion—that the “political question”
doctrine prevents us from addressing FSIA jurisdiction in
light of Turkey’s denial of the Armenian Genocide—free the
foreign sovereigns from suit as early as possible. The
political question analysis also turns on a complex issue of
first impression: whether the FSIA necessarily authorizes the
judiciary to decide in the first instance whether a genocide
has occurred even if a foreign state denies that it has.
Article III grants the federal courts general subject matter
jurisdiction over claims like those presented by the plaintiffs,
which indisputably “arise under” federal law. Verlinden
B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 497 (1983)
(“[E]very action against a foreign sovereign necessarily
involves application of a body of substantive federal law.”).
The issue before us is thus only one of statutory
jurisdiction—the scope of the FSIA—not of Article III
jurisdiction. See id. at 497–98.
The goals behind the Supreme Court’s general
admonitions against hypothetical jurisdiction—to avoid
advisory opinions on the merits and drive-by jurisdictional
rulings—are best served in this unusual context by resting
our decision on a straightforward statute of limitations
determination, rather than addressing the novel and
important questions of law we would otherwise have to
decide. Compare Steel Co. v. Citizens for a Better Env’t,
523 U.S. 83, 98 (1998) (warning courts not to “use the
BAKALIAN V. CENTRAL BANK OF TURKEY 15
pretermission of the jurisdictional question as a device for
reaching a question of law that otherwise would have gone
unaddressed”). The Court “appears to allow an exception to
the rule against” hypothetical jurisdiction “in those ‘peculiar
circumstances’ where the outcome on the merits has been
‘foreordained’ by another case such that ‘the jurisdictional
question could have no effect on the outcome.’” Ctr. for
Reprod. Law & Policy v. Bush, 304 F.3d 183, 194 (2d Cir.
2002) (Sotomayor, J.) (quoting Steel Co., 523 U.S. at 98);
see also Sherrod v. Breitbart, 720 F.3d 932, 936–37 (D.C.
Cir. 2013); Seale v. INS, 323 F.3d 150, 155–57 (1st Cir.
2003).
Our decision in Movsesian, issued while this litigation
was ongoing, foreordained the ultimate outcome of the
plaintiffs’ claims: they are time-barred. A ruling on these
complex jurisdictional issues would thus in effect be an
advisory opinion, because this case plainly cannot go
forward even if there is jurisdiction. See Norton v. Mathews,
427 U.S. 524, 530–32 (1976) (“We think it unnecessary,
however, to resolve the details of these difficult and perhaps
close jurisdictional arguments. The substantive questions
raised in this appeal now have been determined . . . .”); Sec’y
of the Navy v. Avrech, 418 U.S. 676, 678 (1974) (per curiam)
(“[E]ven the most diligent and zealous advocate could find
his ardor somewhat dampened in arguing a jurisdictional
issue where the decision on the merits is thus
foreordained.”).
We therefore affirm the judgment of the district court
because these actions are time-barred.
AFFIRMED.