The U.S. Supreme Court on Monday overturned a California law designed to help Holocaust survivors collect on insurance policies from the Nazi era, ruling 5-4 that the state was improperly interfering with foreign affairs.
Insurance companies praised the ruling, but Holocaust survivors and leading Jewish organizations decried it, saying that it benefits companies that have not acted honorably. The ruling is "a crushing blow to the victims of the Holocaust," according to a statement issued by the Simon Wiesenthal Center.
For The Record
Los Angeles Times Thursday June 26, 2003 Home Edition Main News Part A Page 2 National Desk 1 inches; 36 words Type of Material: Correction
Holocaust -- An article in Tuesday's California section regarding a Supreme Court decision about California law on Holocaust insurance cases incorrectly identified Frank Kaplan as a Century City attorney. His office is now in Santa Monica.
Members of Congress from both parties said they would push legislation that would help survivors pursue claims despite the ruling.
European insurers, many with California affiliates, have been accused in recent years of failing to honor valid policies issued during the Holocaust. Most claimants lack records to substantiate their claims because the paperwork was confiscated or lost when the Nazis uprooted millions of people and forced them into concentration camps during World War II.
The 1999 law requires insurers doing business in California to disclose information about any policies sold in Europe from 1920 to 1945. Companies that failed to comply could have lost their licenses to do business in the state.
The American Insurance Assn. and several insurance companies contended that if the California law were permitted to stand, 50 states could establish 50 different disclosure requirements.
The Bush administration sided with the insurers, saying the law hampered the federal government's goal to speak "with one voice" in foreign affairs.
That argument proved critical to the high court.
"The basic fact is that California seeks to use an iron fist where the President has consistently chosen kid gloves," Justice David Souter wrote for the majority, referring to the administration's position that the claims should be resolved by an international commission, headed by former Secretary of State Lawrence Eagleburger. The commission has been criticized by Jewish groups as ineffective.
"We have heard powerful arguments," Souter added, "that the iron fist would work better, and it may be that if the matter of compensation were considered in isolation from all other issues involving European allies, the iron first would be the preferable policy. But our thoughts on the efficacy of the one approach versus the other are beside the point, since our business is not to judge the wisdom of the national government's policy; dissatisfaction should be addressed to the president or, perhaps Congress."
