In re Assicurazioni Generali, S.P.A., Docket No. 05-5612-cv.

592 F.3d 113

In re ASSICURAZIONI GENERALI, S.P.A.,

Dr. Thomas Weiss, Erna Birnbaum Gottesman and Martha Birnbaum Younger, Plaintiff-Appellants, v. Assicurazioni Generali, S.p.A., Defendant-Appellee.

Edward David, as Personal Representative of the Estate of David David, Plaintiff-Appellant, v. Assicurazioni Generali, S.p.A., Defendant-Appellee.^*

Docket No. 05-5612-cv.

Docket No. 05-5310-cv.

United States Court of Appeals, Second Circuit.

Argued: June 10, 2008.

Decided: January 15, 2010.

William M. Shernoff, Shernoff Bidart & Darras, Claremont, CA (Nancy Sher Cohen, Warrington S. Parker III, Reynold Siemens, John C. Ulin, Doug M. Keller, Peggy J. Williams, and Esta L. Brand, Heller Ehrman LLP, Lawrence Kill and Linda Gerstel, Anderson Kill & Olick, P.C., Robert A. Swift and Joanne Zack, Kohn, Swift & Graf, P.C., Caryn Becker, Lieff, Cabraser, Heimann & Bernstein, LLP, Joel Cohen and Evangeline F. Garris, Shernoff Bidart & Darras, Samuel J. Dubbin, Dubbin & Kravetz, LLP, Thomas R. Fahl, Flanner, Stack & Fahl LLP, on the brief), for Appellants.

Samuel J. Dubbin, Dubbin & Kravetz, LLP, Miami, FL, for Appellants Dr. Thomas Weiss, Erna Birnbaum Gottesman, and Martha Birnbaum Younger.

Thomas R. Fahl, Flanner, Stack & Fahl LLP, Brookfield, WI, for Appellant Edward David.

Marco E. Schnabl, Skadden, Arps, Slate, Meagher & Flom LLP, New York, N.Y. (Kenneth J. Bialkin, Barry H. Garfinkel, Peter Simshauser, and Lance A. Etcheverry, Skadden, Arps, Slate, Meagher & Flom LLP, Franklin B. Velie, Sullivan & Worcester LLP, on the brief), for Appellee.

Sharon Swingle, Attorney, United States Department of Justice, Civil Division, Appellate Staff, Washington, D.C. (John B. Bellinger, III, Legal Adviser, United States Department of State, Gregory G. Katsas, Assistant Attorney General, Mark B. Stern and Benjamin M. Shultz, Attorneys, Department of Justice, Civil Division, Appellate Staff, on the brief), for Amicus Curiae United States of America.

Benjamin M. Shultz, Attorney, United States Department of Justice, Civil Division, Appellate Staff, Washington, D.C. (Harold Hongju Koh, Legal Adviser, United States Department of State, Tony West, Assistant Attorney General, Preet Bharara, United States Attorney for the

Southern District of New York, David S. Jones, Assistant United States Attorney, Mark B. Stern and Sharon Swingle, Attorneys, United States Department of Justice, Civil Division, Appellate Staff, on the briefs), for Amicus Curiae United States of America.

Michael D. Ramsey, University of San Diego Law School, San Diego, CA, for Amici Curiae Professors of Constitutional Law and Foreign Relations Law of the United States.

Before: LEVAL, CALABRESI, and POOLER, Circuit Judges.

LEVAL, Circuit Judge:

Plaintiffs Dr. Thomas Weiss, Erna Birnbaum Gottesman, and Martha Birnbaum Younger ("the Weiss Plaintiffs") and Plaintiff Edward David ("David") appeal from the judgment of the United States District Court for the Southern District of New York (Mukasey, J.), which dismissed their claims. Plaintiffs are beneficiaries of insurance policies purchased by their ancestors in the years leading up to the Holocaust from Defendant Assicurazioni Generali, S.p.A. ("Generali"), an Italian insurance company. Plaintiffs brought state-law claims alleging breach of the insurance contracts, based on Generali's refusal to pay benefits under those policies. These cases and others were consolidated for pre-trial proceedings. The district court granted Generali's motion to dismiss based on the Supreme Court's decision in American Insurance Association v. Garamendi, 539 U.S. 396, 123 S.Ct. 2374, 156 L.Ed.2d 376 (2003), which held that the Plaintiffs' state-law claims were preempted by the foreign policy of the United States, which favors resolution of Holocaust-era insurance claims in the International Commission on Holocaust Era Insurance Claims ("ICHEIC"), an international claims resolution organization founded by private insurance companies and supported by the United States and other foreign government entities. Because we agree with the district court that Garamendi controls this case, we affirm.

BACKGROUND

Generali was founded by Jewish merchants in 1831 in Trieste, Italy. In the time between World War I and World War II, Generali operated in Austria, Hungary, Czechoslovakia, Poland, and Yugoslavia. In the late between-Wars period, many families purchased insurance policies from Generali believing this would provide protection against the rise of Nazi power. According to the complaints, Generali betrayed the policyholders by cooperating with the Nazi regime and refusing to pay the beneficiaries of the insurance policies purchased by Jews and other persecuted minorities.

After World War II, when the victorious Western Allies took steps to reestablish the sovereignty of the defeated Germany, there was a concern that reparations would economically cripple the new Federal Republic of Germany. Garamendi, 539 U.S. at 403, 123 S.Ct. 2374. In the London Debt Agreement, the allies agreed to "put off consideration of claims arising out of the second World War . . . until the final settlement of the problem of reparation." Id. at 403-04, 123 S.Ct. 2374 (internal quotation marks and brackets omitted). Notwithstanding this moratorium, the German government paid out over 100 billion Deutsche marks in reparations as of 2000. Id. at 404, 123 S.Ct. 2374. Those payouts, however, did not cover certain claimants and certain types of claims. Id. In 1996, the German courts interpreted the treaty reunifying East and West Germany as "lifting the London Debt Agreement's moratorium on Holocaust claims by foreign nationals." Id. at 405, 123 S.Ct. 2374. After this decision, many lawsuits that could not have been brought previously were filed against companies doing business in Germany during the Nazi era. In July 2000, the United States announced an agreement with Germany in which the German government agreed to enact legislation to establish a foundation that would be used to compensate all victims who suffered at the hands of German companies during the Nazi era.

In July 2000, the United States announced an agreement with Germany in which the German government agreed to enact legislation to establish a foundation that would be used to compensate all victims who suffered at the hands of German companies during the Nazi era. Id. In return, the United States agreed that whenever a German company was sued on a Holocaust-era claim in an American (state or federal) court, the government of the United States would submit a statement of interest to the court explaining that "it would be in the foreign policy interests of the United States for the [German] Foundation to be the exclusive forum and remedy for the resolution of all asserted claims against German companies arising from their involvement in the National Socialist era and World War II." Garamendi, 539 U.S. at 406, 123 S.Ct. 2374 (internal quotation marks omitted) (quoting 39 Int'l Legal Materials 1298, 1303 (2000)). The "German Foundation pact" was a model for similar agreements with Austria and France. There was however, no similar agreement with Italy.

With respect to insurance claims, the agreement specified that the German foundation would work with the ICHEIC to handle insurance claims. The ICHEIC was formed in 1998 by "several European insurance companies, the State of Israel, Jewish and Holocaust survivor associations, and the National Association of Insurance Commissioners," id. at 406-07, 123 S.Ct. 2374, to negotiate with European insurers to provide information about unpaid policies issued to Holocaust victims between 1920 and 1945, and to settle any claims that arose in the Holocaust era under these policies, id. at 407, 123 S.Ct. 2374; ICHEIC, Memorandum of Understanding ¶ 4 (Aug. 25, 1998), available at http://www.icheic.org/pdf/ICHEIC_MOU. PDF. To date approximately $300 million dollars have been offered or awarded to more than 48,000 claimants as a result of the ICHEIC process. See ICHEIC, http://www.icheic.org (last visited Dec. 17, 2009).

PROCEDURAL HISTORY

The Weiss Plaintiffs filed suit in Florida state court, which Generali removed to federal court. David filed suit in the Eastern District of Wisconsin. Both complaints sought damages for unpaid insurance claims under policies issued by Generali between 1920 and 1941. In November 2000, these suits, together with numerous others, were transferred by the Judicial Panel on Multidistrict Litigation to the district court for the Southern District of New York for consolidated pre-trial proceedings. In an initial opinion, issued prior to the Supreme Court's decision in Garamendi, the district court denied Generali's motion to dismiss on forum non conveniens grounds. In re Assicurazioni Generali S.p.A. Holocaust Ins. Litig., 228 F.Supp.2d 348 (S.D.N.Y. 2002).

In 2003, the Supreme Court decided Garamendi. In that case, a trade association and a group of insurance companies, including Generali, brought suit seeking to enjoin enforcement of California's Holocaust Victim Insurance Relief Act ("HVIRA"), which required insurers to disclose the details of insurance policies sold in Europe between 1920 and 1945 or face suspension of its license to do business in the state. Garamendi, 539 U.S. at 409-10, 123 S.Ct. 2374. The United States filed an amicus brief stating as its foreign policy that the ICHEIC should be the exclusive remedy for insurance claims based on policies from the Holocaust era. Brief of the United States as Amicus Curiae Supporting Petitioners at 2-3, Garamendi, 539 U.S. 396, 123 S.Ct. 2374. The Supreme Court ruled that the HVIRA interfered with and was therefore preempted by the foreign policy of the United States to "encourage European insurers to work with the ICHEIC to develop acceptable claim procedures, including procedures governing disclosure of policy information." Id. at 421, 123 S.Ct. 2374.

Relying on Garamendi, the...