OCTOBER TERM, 2002
Syllabus
AMERICAN INSURANCE ASSOCIATION ET AL.
v.
GARAMENDI, INSURANCE COMMISSIONER, STATE OF CALIFORNIA
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH
CIRCUIT
No. 02-722. Argued April 23, 2003-Decided June 23, 2003
The Nazi Government of Germany confiscated the value or proceeds
of many Jewish life insurance policies issued before and during the
Second World War. After the war, even a policy that had escaped
confiscation was likely to be dishonored, whether because insurers
denied its existence or claimed it had lapsed from unpaid premiums,
or because the German Government would not provide heirs with
documentation of the policyholder's death. Responsibility as
between the government and insurance companies is disputed, but the
fact is that the proceeds of many insurance policies issued to Jews
before and during the war were paid to the Third Reich or never
paid at all. These confiscations and frustrations of claims fell
within the subject of reparations, which became a principal object
of Allied diplomacy after the war. Ultimately, the western Allies
placed the obligation to provide restitution to victims of Nazi
persecution on the new West German Government, which enacted
restitution laws and signed agreements with other countries for the
compensation of their nationals. Despite a payout of more than 100
billion deutsch marks as of 2000, however, these measures left out
many claimants and certain types of claims. After German
reunification, class actions for restitution poured into United
States courts against companies doing business in Germany during
the Nazi era. Protests by defendant companies and their governments
prompted the United States Government to take action to try to
resolve the matter. Negotiations at the national level produced the
German Foundation Agreement, in which Germany agreed to establish a
foundation funded with 10 billion deutsch marks contributed equally
by the German Government and German companies to compensate the
companies' victims during the Nazi era. The President agreed that
whenever a German company was sued on a Holocaust-era claim in an
American court, the Government would (1) submit a statement that it
would be in this country's foreign policy interests for the
foundation to be the exclusive forum and remedy for such claims,
and (2) try to get state and local governments to respect the
foundation as the exclusive mechanism. As for insurance claims in
particular, both countries agreed that the German
397
Foundation would work with the International Commission on
Holocaust Era Insurance Claims (ICHEIC), a voluntary organization
whose mission is to negotiate with European insurers to provide
information about and settlement of unpaid insurance policies, and
which has set up procedures to that end. The German agreement has
served as a model for similar agreements with Austria and
France.
Meanwhile, California began its own enquiry into the issue,
prompting state legislation designed to force payment by defaulting
insurers. Among other laws, California's Holocaust Victim Insurance
Relief Act of 1999 (HVIRA) requires any insurer doing business in
the State to disclose information about all policies sold in Europe
between 1920 and 1945 by the company or anyone "related" to it upon
penalty of loss of its state business license. After HVIRA was
enacted, the State issued administrative subpoenas against several
subsidiaries of European insurance companies participating in the
ICHEIC. Immediately, the Federal Government informed California
officials that HVIRA would damage the ICHEIC, the only effective
means to process quickly and completely unpaid Holocaust era
insurance claims, and that HVIRA would possibly derail the German
Foundation Agreement. Nevertheless, the state insurance
commissioner announced that he would enforce HVIRA to its fullest.
Petitioner insurance entities then filed this suit challenging
HVIRA's constitutionality. The District Court issued a preliminary
injunction against enforcing HVIRA and later granted petitioners
summary judgment. The Ninth Circuit reversed, holding,
inter
alia, that HVIRA did not violate the federal foreign affairs
power.
Held: California's HVIRA interferes with the President's
conduct of the Nation's foreign policy and is therefore preempted.
Pp.413-429.
(a) There is no question that at some point an exercise of state
power that touches on foreign relations must yield to the National
Government's policy or that generally there is executive authority
to decide what that policy should be. In foreign policymaking, the
President, not Congress, has the "lead role."
First Nat. City
Bank v.
Banco Nacional de Cuba, 406 U. S. 759, 767.
Specifically, the President has authority to make "executive
agreements" with other countries, requiring no ratification by the
Senate or approval by Congress. See,
e. g., Dames &
Moore v.
Regan, 453 U. S. 654, 679,
682-683. Making such agreements to settle claims of American
nationals against foreign governments is a particularly
longstanding practice. Although the executive agreements with
Germany, Austria, and France at issue differ from past agreements
in that they address claims associated with formerly belligerent
states, but against corporations, not the foreign governments, the
distinction does not matter. Insisting on a sharp line between
public and private
398
Syllabus
acts in defining the legitimate scope of the Executive's
international negotiations would hamstring the President in
settling international controversies. Generally, then, valid
executive agreements are fit to preempt state law, and if the
agreements here had expressly preempted laws like HVIRA, the issue
would be straightforward. But since these agreements include no
preemption clause, petitioners' preemption claim rests on the
asserted interference with Presidential foreign policy that the
agreements embody. The principal support for this claim of
preemption is
Zschernig v.
Miller, 389 U. S. 429. In
invalidating an Oregon statute, the
Zschernig majority
relied on statements in previous cases that are open to the reading
that state action with more than incidental effect on foreign
affairs is preempted, even absent any affirmative federal activity
in the subject area of the state law, and hence without any showing
of conflict. See,
e. g., id., at 432. Justice Harlan,
concurring in the result, disagreed on this point, arguing that its
implication of preemption of the entire foreign affairs field was
at odds with other cases suggesting that, absent positive federal
action, States may legislate in areas of their traditional
competence even though their statutes may have an incidental effect
on foreign relations.
Id., at 459. Whether respect for the
executive foreign relations power requires a categorical choice
between the contrasting theories of field and conflict preemption
evident in
Zschernig requires no answer here, for even on
Justice Harlan's view, shared by the majority, the likelihood that
state legislation will produce something more than incidental
effect in conflict with the National Government's express foreign
policy would require preemption of the state law. See also
United States v.
Pink, 315 U. S. 203, 230-231.
And since on his view it is legislation within "areas of ...
traditional competence" that gives a State any claim to prevail,
389 U. S., at 459, it is reasonable to consider the strength of the
state interest, judged by standards of traditional practice, when
deciding how serious a conflict must be shown before declaring the
state law preempted. Pp. 413-420.
(b) There is a sufficiently clear conflict between HVIRA and the
President's foreign policy, as expressed both in the executive
agreements with Germany, Austria, and France, and in statements by
high-level Executive Branch officials, to require preemption here
even without any consideration of the State's interest. The account
of negotiations toward those agreements shows that the consistent
Presidential foreign policy has been to encourage European
governments and companies to volunteer settlement funds and
disclosure of policy information, in preference to litigation or
coercive sanctions. California has taken a different tack: HVIRA's
economic compulsion to make public disclosure, of far more
information about far more policies than ICHEIC rules require,
399
employs "a different, state system of economic pressure," and in
doing so undercuts the President's diplomatic discretion and the
choice he has made exercising it.
Crosby v.
National
Foreign Trade Council, 530 U. S. 363, 376. Whereas the
President's authority to provide for settling claims in winding up
international hostilities requires flexibility in wielding "the
coercive power of the national economy" as a tool of diplomacy,
id., at 377, HVIRA denies this, by making exclusion from a large
sector of the American insurance market the automatic sanction for
noncompliance with the State's own disclosure policies. HVIRA thus
compromises the President's very capacity to speak for the Nation
with one voice in dealing with other governments to resolve claims
arising out of World War II. Although the HVIRA disclosure
requirement's goal of obtaining compensation for Holocaust victims
is also espoused by the National Government, the fact of a common
end hardly neutralizes conflicting means. The express federal
policy and the clear conflict raised by the state statute are alone
enough to require state law to yield. Pp. 420-425.
(c) 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, when evaluated in terms of
traditional state legislative subject matter, in regulating
disclosure of European Holocaust-era insurance policies in the
manner of HVIRA. Even if California's underlying concern for its
several thousand Holocaust survivors is recognized as a powerful
one, the same objective dignifies the N ational Government's
interest in devising its chosen mechanism for voluntary
settlements, there being approximately 100,000 survivors in the
country, only a small fraction of them in California. As against
the federal responsibility, the humanity underlying the state
statute could not give the State the benefit of any doubt in
resolving the conflict with national policy. Pp. 425-427.
(d) California seeks to use an iron fist where the President has
consistently chosen kid gloves. The efficacy of the one approach
versus the other is beside the point, since preemption turns not on
the wisdom of the National Government's policy but on the evidence
of conflict. Here, the evidence is more than sufficient to
demonstrate that HVIRA stands in the way of the President's
diplomatic objectives. P. 427.
(e) The Court rejects the State's submission that even if HVIRA
does interfere with Executive Branch foreign policy, Congress
authorized state law of this sort in the McCarran- Ferguson Act and
the U. S. Holocaust Assets Commission Act of 1998. To begin with,
the effect of any congressional authorization on the preemption
enquiry is far from clear, but in any event neither statute does
the job the State ascribes to it. McCarran- Ferguson's purpose was
to limit congressional preemption of
400
state insurance laws under the commerce power, whether dormant
or exercised, see,
e. g., Department of Treasury v.
Fabe, 508 U.
S. 491, 499500, and it cannot plausibly be read to address
preemption by executive conduct in foreign affairs. Nor is HVIRA
authorized by the Holocaust Commission Act, which set up a
Presidential Commission to study Holocaust-era assets that came
into the Government's control, § 3(a)(1), and directed the
Commission to encourage state insurance commissioners to prepare a
report on the Holocaust-related claims practices of all insurance
companies doing business in this country after January 30, 1933, §
3(a)(4)(A). The Commission's focus was limited to assets held by
the Government, and the Act's reference to the state insurance
commissioners' report was expressly limited "to the degree the
information is available," § 3(a)(4)(B), which can hardly be read
to condone state sanctions interfering with federal efforts to
resolve claims. Finally, Congress has done nothing to express
disapproval of the President's policy. Given the President's
considerable independent authority in this area, Congress's silence
cannot be equated with disapproval. Pp. 427-429.
296 F.3d
832, reversed.
SOUTER, J., delivered the opinion of the Court, in which
REHNQUIST, C. J., and O'CONNOR, KENNEDY, and BREYER, JJ., joined.
GINSBURG, J., filed a dissenting opinion, in which STEVENS, SCALIA,
and THOMAS, JJ., joined,
post, p. 430.
Kenneth S. Geller argued the cause for petitioners. With him on
the briefs were John J. Sullivan, Stephen M. Shapiro, Neil M.
Soltman, Peter Sims hauser, William H. Webster, Linda Dakin-Grimm,
and Sally Agel. Frederick W Reif filed briefs for respondents
Gerling Companies urging reversal. With him on the briefs were Dina
G. Daskalakis, Keith D. Barrack, George L. O'Connell, and Timothy
P. Grieve.
Deputy Solicitor General Kneedler argued the cause for the
United States as amicus curiae urging reversal. With him on the
briefs were Acting Solicitor General Clement, Assistant Attorney
General McCallum, Barbara McDowell, Mark B. Stern, Douglas
Hallward-Driemeier, and William H. Taft TV.
401
Frank Kaplan argued the cause for respondent. With him on the
brief were Jesse J. Contreras, Larry G. Simon, Andrew W Stroud,
Michael D. Ramsey, and Leslie Tick.*
JUSTICE SOUTER delivered the opinion of the Court. California's
Holocaust Victim Insurance Relief Act of 1999 (HVIRA or Act), Cal.
Ins. Code Ann. §§ 13800-13807 (West
Cum. Supp. 2003), requires any insurer doing business in that
State to disclose information about all policies sold in Europe
between 1920 and 1945 by the company itself or anyone "related" to
it. The issue here is whether HVIRA interferes with the National
Government's conduct of foreign relations. We hold that it does,
with the consequence that the state statute is preempted.
I A
The Nazi Government of Germany engaged not only in genocide and
enslavement but theft of Jewish assets, includ-
*Briefs of
amici curiae urging reversal were filed for
the Chamber of Commerce of the United States et al. by
Kim
Heebner Price and
Robin S.
Conrad; for the
Federal Republic of Germany by
Roger M. Witten; for the
Government of Switzerland by
Stephan E. Becker; and for
Mitsubishi Materials Corp. et al. by
Walter Dellinger, John H.
Beisner, David M. Balabanian, Margaret K. Pfeiffer, Arne D.
Wagner, and
Paul J.
Hall.
Briefs of
amici curiae urging affirmance were filed for
the State of California et al. by
Bill Lockyer, Attorney
General of California,
Manuel Medeiros, State Solicitor
General,
Richard M. Frank, Chief Assistant Attorney General,
J.
Matthew Rodriquez, Senior Assistant Attorney General, and
Daniel L. Siegel, Supervising Deputy Attorney General, and
by the Attorneys General for their respective jurisdictions as
follows:
William H. Pryor, Jr., of Alabama, G.
Steven
Rowe of Maine, J.
Joseph Curran, Jr., of Maryland,
Thomas F.
Reilly of Massachusetts,
Mike Hatch
of Minnesota,
Brian Sandoval of Nevada,
Peter C.
Harvey of New Jersey,
Eliot Spitzer of New York,
Jim Petro of Ohio,
Anabelle Rodriguez of Puerto Rico,
Greg Abbott of Texas, and
Christine O.
Gregoire of Washington; for Bet Tzedek Legal Services et al.
by
Gregory R. Smith, Elizabeth K. Penfil, David A. Lash, and
Martin Mendelsohn; for the National Association of Insurance
Commissioners by
Ross S.
Myers; and for
Representative Henry A. Waxman et al. by
Kenneth
Chesebro.
402
ing the value of insurance policies, and in particular policies
of life insurance, a form of savings held by many Jews in Europe
before the Second World War. Early on in the Nazi era, loss of
livelihood forced Jews to cash in life insurance policies
prematurely, only to have the government seize the proceeds of the
repurchase, and many who tried to emigrate from Germany were forced
to liquidate insurance policies to pay the steep "flight taxes" and
other levies imposed by the Third Reich to keep Jewish assets from
leaving the country. See G. Feldman, Allianz and the German
Insurance Business, 1933-1945, pp. 249-262 (2001). Before long, the
Reich began simply seizing the remaining policies outright.1 In
1941, the 11th Decree of the Reich Citizenship Law declared the
confiscation of assets (including insurance policies) of Jews
deported to the concentration camps, and two years later the 13th
Decree did the same with respect to property of the dead, each
decree requiring banks and insurance companies to identify Jewish
accounts and transmit the funds to the Reich treasury.
Id.,
at 264-274. After the war, even a policy that had escaped
confiscation was likely to be dishonored, whether because insurers
denied its existence or claimed it had lapsed from unpaid premiums
during the persecution, or because the government would not provide
heirs with documentation of the policyholder's death. See M.
Bazyler, Holocaust Justice: The Battle for Restitution in America's
Courts 117-122 (2003). Responsibility as between the government and
insurance companies is disputed, but at the end
1 A vivid precursor of the kind of direct confiscation that
would become widespread by 1941 was the Reich's seizure of property
and casualty insurance proceeds in the aftermath of the November
1938 Kristallnacht, in which Nazi looting and vandalism inflicted
damage to Jewish businesses, homes, and synagogues worth nearly 50
million deutsch marks. Days afterward, a Reich decree mandated that
all proceeds of all insurance claims arising from the damage be
paid directly to the state treasury, an obligation ultimately
settled by German insurance companies with the Reich at a mere
pittance relative to full value. See Feldman, Allianz and the
German Insurance Business, at 190-235.
403
of the day, the fact is that the value or proceeds of many
insurance policies issued to Jews before and during the war were
paid to the Reich or never paid at all.
These confiscations and frustrations of claims fell within the
subject of reparations, which became a principal object of Allied
diplomacy soon after the war. At the Potsdam Conference, the United
States, Britain, and the Soviet Union took reparations for wartime
losses by seizing industrial assets from their respective
occupation zones, putting into effect the plan originally
envisioned at the Yalta Conference months before. Protocol of
Proceedings of the Berlin (Potsdam) Conference, 1945, in 3 Dept. of
State, Treaties and Other International Agreements of the United
States of America 1776-1949, pp. 1207, 1213-1214 (C. Bevans compo
1969) (hereinafter Bevans); Report of the Crimea (Yalta)
Conference, 1945, in 3 Bevans 1005; Protocol of the Crimea (Yalta)
Conference on the Question of the German Reparation in Kind, 1945,
in 3 Bevans 1020. A year later, the United States was among the
parties to an agreement to share seized assets with other western
allies as settlement, as to each signatory nation, of "all its
claims and those of its nationals against the former German
Government and its Agencies, of a governmental or private nature,
arising out of the war." Agreement on Reparation from Germany, on
the Establishment of Inter-Allied Reparation Agency and Restitution
of Monetary Gold, 61 Stat. 3163, Art. 2(A), T. 1. A. S. No. 1655
(hereinafter Paris Agreement).
The effect of the Paris Agreement was curtailed, however, and
attention to reparations intentionally deferred, when the western
Allies moved to end their occupation and reestablish a sovereign
Germany as a buffer against Soviet expansion. They worried that
continued reparations would cripple the new Federal Republic of
Germany economically, and so decided in the London Debt Agreement
to put off "[c]onsideration of claims arising out of the second
World War by countries which were at war with or were occupied by
Germany
404
during that war, and by nationals of such countries, against the
Reich and agencies of the Reich ... until the final settlement of
the problem of reparation." Agreement on German External Debts,
Feb. 27, 1953, 4 U. S. T. 443, 449, T. 1. A. S. No. 2792. These
terms were construed by German courts as postponing resolution of
foreign claims against both the German Government and German
industry, to await the terms of an ultimate postwar treaty. See N
euborne, Preliminary Reflections on Aspects of Holocaust-Era
Litigation in American Courts, 80 Wash. U. L. Q. 795, 813-814,
and
In the meantime, the western Allies placed the obligation to
provide restitution to victims of Nazi persecution on the new West
German Government. See Convention on the Settlement of Matters
Arising Out of the War and the Occupation, May 26, 1952,6 U. S. T.
4411, 4452-4484, as amended by Protocol on Termination of the
Occupation Regime in the Federal Republic of Germany, Oct. 23,
1954, [1955] 6 U. S. T. 4117, T. 1. A. S. No. 3425. This had
previously been a responsibility of the western military
governments, which had issued several decrees for the return of
property confiscated by the Nazis. See N. Robinson, Restitution
Legislation in Germany: A Survey of Enactments (1949); U. S.
Military Law Nos. 52 and 59 (reprinted in U. S. Military Government
Gazette, Germany, Issue A, p. 24 (June 1, 1946) and Issue G, p. 1
(Nov. 10, 1947)). West Germany enacted its own restitution laws in
1953 and 1956, see Institute of Jewish Affairs, The (West German)
Federal Compensation Law (BEG) and its Implementary Regulations
(1957), and signed agreements with 16 countries for the
compensation of their nationals, including the Luxembourg Agreement
with Israel, Sept. 10, 1952, 162 U. N. T. S. 205; see Supplemental
Excerpts of Record in No. 01-17023 (CA9) (SER), p. 1244. Despite a
payout of more than 100 billion deutsch marks as of 2000, see
ibid., these measures left out many claimants and certain types of
claims, and when the agreement reunifying East and West
405
Germany, see Treaty on the Final Settlement with Respect to
Germany, Sept. 12, 1990, 1696 U. N. T. S. 124, was read by the
German courts as lifting the London Debt Agreement's moratorium on
Holocaust claims by foreign nationals, classaction lawsuits for
restitution poured into United States courts against companies
doing business in Germany during the Nazi era. See Neuborne,
supra, at 796, n. 2, 813-814; see generally Bazyler,
Nuremberg in America: Litigating the Holocaust in United States
Courts, 34 Rich. L. Rev. 1 (2000) (describing the flood of lawsuits
after 1996).
These suits generated much protest by the defendant companies
and their governments, to the point that the Government of the
United States took action to try to resolve "the last great
compensation related negotiation arising out of World War II." SER
940 (press briefing by Deputy Secretary of Treasury Eizenstat); see
S. Eizenstat, Imperfect Justice 208-212 (2003). From the beginning,
the Government's position, represented principally by Under
Secretary of State (later Deputy Treasury Secretary) Stuart
Eizenstat, stressed mediated settlement "as an alternative to
endless litigation" promising little relief to aging Holocaust
survivors. SER 953 (press conference by Secretary of State
Albright). Ensuing negotiations at the national level produced the
German Foundation Agreement, signed by President Clinton and German
Chancellor Schroder in July 2000, in which Germany agreed to enact
legislation establishing a foundation funded with 10 billion
deutsch marks contributed equally by the German Government and
German companies, to be used to compensate all those "who suffered
at the hands of German companies during the National Socialist
era." Agreement Concerning the Foundation "Remembrance,
Responsibility and the Future," 39 Int'l Legal Materials 1298
(2000).
The willingness of the Germans to create a voluntary
compensation fund was conditioned on some expectation of security
from lawsuits in United States courts, and after
406
extended dickering President Clinton put his weight behind two
specific measures toward that end. SER 937 (letter from President
Clinton to Chancellor Schroder committing to a "mechanism to
provide the legal peace desired by the German government and German
companies"); see also Eizens tat,
supra, at 253-258. First,
the Government agreed that whenever a German company was sued on a
Holocaustera claim in an American court, the Government of the
United States would submit a statement that "it would be in the
foreign policy interests of the United States for the 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." 39
Int'l Legal Materials, at 1303. Though unwilling to guarantee that
its foreign policy interests would "in themselves provide an
independent legal basis for dismissal," that being an issue for the
courts, the Government agreed to tell courts "that U. S. policy
interests favor dismissal on any valid legal ground."
Id.,
at 1304. On top of that undertaking, the Government promised to use
its "best efforts, in a manner it considers appropriate," to get
state and local governments to respect the foundation as the
exclusive mechanism.
Id., at 1300.2
As for insurance claims specifically, both countries agreed that
the German Foundation would work with the International Commission
on Holocaust Era Insurance Claims (ICHEIC), a voluntary
organization formed in 1998 by several European insurance
companies, the State of Israel, Jewish and Holocaust survivor
associations, and the National
2 The executive agreement was accompanied by a joint statement
signed by the American and German Governments, the Governments of
Israel and five Eastern European countries, and the Conference on
Jewish Material Claims Against Germany, Inc., "[r]ecognizing that
it would be in the participants' interests for the Foundation to be
the exclusive remedy and forum" for all Holocaust-era claims
against German companies. Excerpt of Record in No. 01-17023 (CA9)
(ER), pp. 812-816.
407
Association of Insurance Commissioners, the organization of
American state insurance commissioners. The job of the ICHEIC,
chaired by former Secretary of State Eagleburger, includes
negotiation with European insurers to provide information about
unpaid insurance policies issued to Holocaust victims and
settlement of claims brought under them. It has thus set up
procedures for handling demands against participating insurers,
including "a reasonable review ... of the participating companies'
files" for production of unpaid policies, "an investigatory process
to determine the current status" of insurance policies for which
claims are filed, and a "claims and valuation process to settle and
pay individual claims," employing "relaxed standards of proof." SER
1236-1237.
In the pact with the United States, Germany stipulated that
"insurance claims that come within the scope of the current claims
handling procedures adopted by the [ICHEIC] and are made against
German insurance companies shall be processed by the companies and
the German Insurance Association on the basis of such procedures
and on the basis of additional claims handling procedures that may
be agreed among the Foundation, ICHEIC, and the German Insurance
Association." 39 Int'l Legal Materials, at 1299. And in a
supplemental agreement formalized in October 2002, the German
Foundation agreed to set aside 200 million deutsch marks, to be
used for insurance claims approved by the ICHEIC and a portion of
the ICHEIC's operating expenses, with another 100 million in
reserve if the initial fund should run out. Agreement Concerning
Holocaust Era Insurance Claims, in Lodging of Petitioners in
Gerling Global Reinsurance Corp. v.
Garamendi, No.
02-733, pp. L-70 to L-71, L-78 to L-79, cert. pending. [REPORTER'S
NOTE: See
post, p. 955.] The foundation also bound itself to
contribute 350 million deutsch marks to a "humanitarian fund"
administered by the ICHEIC, id., at L-80, and it agreed to work
with the German Insurance Association and the German insurers
who
408
had joined the ICHEIC, "with a view to publishing as
comprehensive a list as possible of holders of insurance policies
issued by German companies who may have been Holocaust victims,"
id., at L-147. Those efforts, which control release of information
in ways that respect German privacy laws limiting publication of
business records, have resulted in the recent release of the names
of over 360,000 Holocaust victims owning life insurance policies
issued by German insurers. See Treaster, Holocaust List Is Unsealed
by Insurers, N. Y. Times, Apr. 29, 2003, section A, p. 26, col.
6.
The German Foundation pact has served as a model for similar
agreements with Austria and France,3 and the United States
Government continues to pursue comparable agreements with other
countries. Reply Brief for Petitioners 6, n.2.
B
While these international efforts were underway, California's
Department of Insurance began its own enquiry into the issue of
unpaid claims under Nazi-era insurance policies, prompting state
legislation designed to force payment by defaulting insurers. In
1998, the state legislature made it an
3 Agreement Between the Government of the United States of
America and the Government of France Concerning Payments for
Certain Losses Suffered During World War II, Jan. 18,2001,2001 WL
416465; Agreement between the Austrian Federal Government and the
Government of the United States of America Concerning the Austrian
Fund "Reconciliation, Peace and Cooperation," 40 Int'l Legal
Materials 523 (2001); Agreement Relating to the Agreement of
October 24, 2000, Concerning the Austrian Fund "Reconciliation,
Peace and Cooperation," Jan. 23, 2001, 2001 WL 935261, Annex A, §
2(n). Though the French agreement does not address insurance, the
agreement with Austria does. Austria agreed to devote a $25 million
fund for payment of claims processed according to the ICHEIC's
procedures. See
ibid. Austria also agreed to "make the lists
of Holocaust era policy holders publicly accessible, to the extent
available."
Ibid. The United States Government agreed, in
turn, that the settlement fund should be viewed as "the exclusive
... forum" for the resolution of Holocaust-era claims asserted
against the Austrian Government or Austrian companies. 40 Int'l
Legal Materials, at 524.
409
unfair business practice for any insurer operating in the State
to "fai[l] to pay any valid claim from Holocaust survivors." Cal.
Ins. Code Ann. § 790.15(a) (West Cum. Supp. 2003). The legislature
placed "an affirmative duty" on the Department of Insurance "to
play an independent role in representing the interests of Holocaust
survivors," including an obligation to "gather, review, and analyze
the archives of insurers ... to provide for research and
investigation" into unpaid insurance claims. §§ 12967(a)(1),
(2).
State legislative efforts culminated the next year with passage
of Assembly Bill No. 600, 1999 Cal. Stats. ch. 827, the first
section of which amended the State's Code of Civil Procedure to
allow state residents to sue in state court on insurance claims
based on acts perpetrated in the Holocaust and extended the
governing statute of limitations to December 31, 2010. Cal. Civ.
Proc. Code Ann. § 354.5 (West Cum. Supp. 2003). The section of the
bill codified as HVIRA, at issue here,4 requires "[a]ny insurer
currently doing business in the state" to disclose the details of
"life, property, liability, health, annuities, dowry, educational,
or casualty insurance policies" issued "to persons in Europe, which
were in effect between 1920 and 1945." Cal. Ins. Code Ann. §
13804(a) (West Cum. Supp. 2003). The duty is to make disclosure not
only about policies the particular insurer sold, but also about
those sold by any "related company," ibid., including "any parent,
subsidiary, reinsurer, successor in interest, managing general
agent, or affiliate company of the insurer," § 13802(b),5 whether
or not the companies were related dur-
4 Challenges to Cal. Civ. Proc. Code Ann. § 354.5 (West Cum.
Supp. 2003) and Cal. Ins. Code Ann. § 790.15 (West Cum. Supp. 2003)
were dismissed by the District Court for lack of standing, a ruling
that was not appealed. See
Gerling Global Reinsurance Corp. of
America v.
Low, 240 F.3d
739,
742-743 (CA9 2001).
5 These terms are further defined in the commissioner's
regulations.
Cal. Code Regs., Tit. 10, §2278.1 (1996). An "affiliate" company
is one that "directly, or indirectly, through one or more
intermediaries, controls,
410
ing the time when the policies subject to disclosure were sold,
§ 13804(a). Nor is the obligation restricted to policies sold to
"Holocaust victims" as defined in the Act, § 13802(a); it covers
policies sold to anyone during that time, § 13804(a). The insurer
must report the current status of each policy, the city of origin,
domicile, or address of each policyholder, and the names of the
beneficiaries, § 13804(a), all of which is to be put in a central
registry open to the public, § 13803. The mandatory penalty for
default is suspension of the company's license to do business in
the State, § 13806, and there are misdemeanor criminal sanctions
for falsehood in certain required representations about whether and
to whom the proceeds of each policy have been distributed, §
13804(b).
HVIRA was meant to enhance enforcement of both the unfair
business practice provision (§ 790.15) and the provision for suit
on the policies in question (§ 354.5) by "ensur[ing] that any
involvement [that licensed California insurers] or their related
companies may have had with insurance policies of Holocaust victims
are
[sic] disclosed to the state." § 13801(e); see ibid.
(HVIRA is designed to "ensure the rapid resolution" of unpaid
insurance claims, "eliminating the further victimization of these
policyholders and their families"); Excerpt of Record in No.
01-17023 (CA9) (ER), p. 994 (California Senate Committee on
Insurance report) (HVIRA was proposed to "ensure that Holocaust
victims or their heirs can take direct action on their own behalf
with regard to insurance policies and claims"). While the
legislature acknowledged that "[t]he international Jewish community
is in active
or is controlled by, or is under common control with, the
[insurer]." Cal. Ins. Code Ann. § 1215(a) (West 1993)
(cross-referenced in § 2278.1(e)). A "[m]anaging [g]eneral [a]gent"
is a company that "negotiates and binds ceding reinsurance
contracts on behalf of an insurer or manages all or part of the
insurance business of an insurer." § 769.819(c) (cross-referenced
in § 2278.1(c)). A "reinsurer" is "a parent, subsidiary or
affiliate of the insurer that provides reinsurance." Cal. Code
Regs., Tit. 10, § 2278.1(i) (1996).
411
negotiations with responsible insurance companies through the
[ICHEIC] to resolve all outstanding insurance claims issues," it
still thought the Act "necessary to protect the claims and
interests of California residents, as well as to encourage the
development of a resolution to these issues through the
international process or through direct action by the State of
California, as necessary." § 13801(f).
After HVIRA was enacted, administrative subpoenas were issued
against several subsidiaries of European insurance companies
participating in the ICHEIC. See,
e. g., SER 785, 791.
Immediately, in November 1999, Deputy Secretary Eizenstat wrote to
the insurance commissioner of California that although HVIRA
"reflects a genuine commitment to justice for Holocaust victims and
their families, it has the unfortunate effect of damaging the one
effective means now at hand to process quickly and completely
unpaid insurance claims from the Holocaust period, the [ICHEIC]."
Id., at 975. The Deputy Secretary said that "actions by
California, pursuant to this law, have already threatened to damage
the cooperative spirit which the [ICHEIC] requires to resolve the
important issue for Holocaust survivors," and he also noted that
ICHEIC Chairman Eagleburger had expressed his opposition to
"sanctions and other pressures brought by California on companies
with whom he is obtaining real cooperation."
Id., at 976.
The same day, Deputy Secretary Eizenstat also wrote to California's
Governor making the same points, and stressing that HVIRA would
possibly derail the German Foundation Agreement: "Clearly, for this
deal to work ... German industry and the German government need to
be assured that they will get 'legal peace,' not just from
class-action lawsuits, but from the kind of legislation represented
by the California Victim Insurance Relief Act."
Id., at 970.
These expressions of the National Government's concern proved to be
of no consequence, for the state commissioner announced at an
investigatory hearing in December 1999 that he would enforce HVIRA
to its
412
fullest, requiring the affected insurers to make the
disclosures, leave the State voluntarily, or lose their licenses.
ER 1097.
II
After this ultimatum, the petitioners here, several American and
European insurance companies and the American Insurance Association
(a national trade association), filed suit for injunctive relief
against respondent insurance commissioner of California,
challenging the constitutionality of HVIRA. The District Court
issued a preliminary injunction against enforcing the Act,
reflecting its probability judgment that "HVIRA is unconstitutional
based on a violation of the federal foreign affairs power and a
violation of the Commerce Clause." App. to Pet. for Cert. 110a. On
appeal, the Ninth Circuit rejected these grounds for questioning
the Act but left the preliminary injunction in place until the
District Court could consider whether petitioners were likely to
succeed on their due process claim.
Gerling Global Reinsurance
Corp. of America v.
Low, 240 F.3d
739, 754 (2001).
On remand, the District Court addressed two points. Although it
held the Act to be within the State's "legislative jurisdiction,"
as it applied only to insurers licensed to do business in the
State, the District Court granted summary judgment to the
petitioners on the ground of a procedural due process violation in
"mandating license suspension for non-performance of what may be
impossible tasks without allowing for a meaningful hearing."
Gerling Global Reinsurance Corp. of America v.
Low,
186 F. Supp. 2d 1099, 1108, 1113 (ED Cal. 2001). In a second
appeal, the same panel of the Ninth Circuit reversed again. While
it agreed that the Act was not beyond the State's legislative
authority, the Court of Appeals rejected the conclusion that
procedural due process required an opportunity for insurers to
raise an impossibility excuse for noncompliance with the law,
296 F.3d
832, 845-848 (2002), and it reaffirmed its prior ruling
that
413
the Act violated neither the foreign affairs nor the foreign
commerce powers, id., at 849. Given the importance of the issue,6
we granted certiorari, 537 U. S. 1100 (2003), and now reverse.7
III
The principal argument for preemption made by petitioners and
the United States as
amicus curiae is that HVIRA interferes
with foreign policy of the Executive Branch, as expressed
principally in the executive agreements with Germany, Austria, and
France. The major premises of the argument, at least, are beyond
dispute. There is, of course, no question that at some point an
exercise of state power that touches on foreign relations must
yield to the National Government's policy, given the "concern for
uniformity in this country's dealings with foreign nations" that
animated the Constitution's allocation of the foreign relations
power to the National Government in the first place.
Banco
Nacional de Cuba v.
Sabbatino, 376 U. S. 398, 427, n. 25
(1964); see
Crosby v.
National Foreign Trade Council,
530 U. S.
363,
6 Several other States have passed laws similar to HVIRA. See
Holocaust Victims Insurance Act, Fla. Stat. § 626.9543 (Cum. Supp.
2003); Holocaust Victims Insurance Act, Md. Ins. Code Ann. §§28-101
to 28-110 (2002); Holocaust Victims Insurance Relief Act of 2000,
Minn. Stat. § 60A.053 (Cum. Supp. 2003); Holocaust Victims
Insurance Act of 1998, N. Y. Ins. Law §§2701-2711 (Consol. 2000);
Holocaust Victims Insurance Relief Act of 1999, Wash. Rev. Code
§§48.104.01O-48.104.903 (2003); see also Ariz. Rev. Stat. Ann. §
20-490 (West Cum. Supp. 2003); Tex. Ins. Code Ann., Art. 21.74
(Vernon 2003). And similar bills have been proposed in other
States. See,
e. g., Mass. Senate Bill No. 843 (Jan.
1,2003).
7 Two petitions for certiorari were filed, one by the
petitioners in this case (No. 02-722), and one, raising additional
issues, by the Gerling Companies (No. 02-733), which were also
appellees below. Our grant of certiorari in No. 02-722 encompassed
three of the questions addressed by the Ninth Circuit: whether
HVIRA intrudes on the federal foreign affairs power, violates the
self-executing element of the Foreign Commerce Clause, or exceeds
the State's "legislative jurisdiction." Pet. for Cert. I. Because
we hold that HVIRA is preempted under the foreign affairs doctrine,
we have no reason to address the other questions.
414
381-382, n. 16 (2000) (" '[T]he peace of the WHOLE ought not to
be left at the disposal of a PART'" (quoting The Federalist No. 80,
pp. 535-536 (J. Cooke ed. 1961) (A. Hamilton)));
Id., No.
44, at 299 (J. Madison) (emphasizing "the advantage of uniformity
in all points which relate to foreign powers");
Id., No. 42,
at 279 (J. Madison) ("If we are to be one nation in any respect, it
clearly ought to be in respect to other nations"); see also
First Nat. City Bank v.
Banco Nacional de Cuba,
406 U. S. 759,
769 (1972) (plurality opinion) (act of state doctrine was
"fashioned because of fear that adjudication would interfere with
the conduct of foreign relations");
Japan Line, Ltd. v.
County of Los Angeles, 441 U. S. 434, 449 (1979)
(negative Foreign Commerce Clause protects the National
Government's ability to speak with "one voice" in regulating
commerce with foreign countries (internal quotation marks
omitted)).
Nor is there any question generally that there is executive
authority to decide what that policy should be. Although the source
of the President's power to act in foreign affairs does not enjoy
any textual detail, the historical gloss on the "executive Power"
vested in Article II of the Constitution has recognized the
President's "vast share of responsibility for the conduct of our
foreign relations."
Youngstown Sheet &
Tube Co.
v.
Sawyer, 343
U. S. 579, 610-611 (1952) (Frankfurter, J., concurring). While
Congress holds express authority to regulate public and private
dealings with other nations in its war and foreign commerce powers,
in foreign affairs the President has a degree of independent
authority to act. See,
e. g., Chicago &
Southern Air
Lines, Inc. v.
Waterman S. S.
Corp., 333 U. S. 103, 109 (1948)
("The President ... possesses in his own right certain powers
conferred by the Constitution on him as Commander-in-Chief and as
the Nation's organ in foreign affairs");
Youngstown, supra,
at 635-636, n. 2 (Jackson, J., concurring in judgment and opinion
of Court) (the President can "act in external affairs without
congressional authority" (citing
United States v.
Curtiss-
415
Wright Export Corp., 299 U. S. 304 (1936)));
First Nat. City Bank v.
Banco Nacional de Cuba,
supra, at 767 (the President has "the lead role ... in foreign
policy" (citing
Sabbatino, supra)); Sale v.
Haitian
Centers Council, Inc., 509 U. S. 155, 188 (1993)
(the President has "unique responsibility" for the conduct of
"foreign and military affairs").
At a more specific level, our cases have recognized that the
President has authority to make "executive agreements" with other
countries, requiring no ratification by the Senate or approval by
Congress, this power having been exercised since the early years of
the Republic. See
Dames &
Moore v.
Regan,
453 U. S. 654,
679, 682-683 (1981);
United States v.
Pink, 315 U. S. 203, 223, 230
(1942);
United States v.
Belmont, 301 U. S. 324, 330-331
(1937); see also L. Henkin, Foreign Affairs and the United States
Constitution 219, 496, n. 163 (2d ed. 1996) ("Presidents from
Washington to Clinton have made many thousands of agreements ... on
matters running the gamut of U. S. foreign relations"). Making
executive agreements to settle claims of American nationals against
foreign governments is a particularly longstanding practice, the
first example being as early as 1799, when the Adams administration
settled demands against the Dutch Government by American citizens
who lost their cargo when Dutch privateers overtook the schooner
Wilmington Packet. See
Dames &
Moore,
supra, at 679-680, and n. 8; 5 Dept. of State, Treaties and
Other International Acts of the United States 1075, 1078-1079 (H.
Miller ed. 1937). Given the fact that the practice goes back over
200 years, and has received congressional acquiescence throughout
its history, the conclusion "[t]hat the President's control of
foreign relations includes the settlement of claims is
indisputable."
Pink, supra, at 240 (Frankfurter, J.,
concurring); see 315 U. S., at 223-225 (opinion of the Court);
Belmont, supra, at 330-331;
Dames &
Moore,
supra, at 682.
The executive agreements at issue here do differ in one respect
from those just mentioned insofar as they address
416
claims associated with formerly belligerent states, but against
corporations, not the foreign governments. But the distinction does
not matter. Historically, wartime claims against even nominally
private entities have become issues in international diplomacy, and
three of the postwar settlements dealing with reparations
implicating private parties were made by the Executive alone.8
Acceptance of this historical practice is supported by a good
pragmatic reason for depending on executive agreements to settle
claims against foreign corporations associated with wartime
experience. As shown by the history of insurance confiscation
mentioned earlier, untangling government policy from private
initiative during wartime is often so hard that diplomatic action
settling claims against private parties may well be just as
essential in the aftermath of hostilities as diplomacy to settle
claims against foreign governments. While a sharp line between
public and private acts works for many purposes in the domestic
law, insisting on the same line in defining the legitimate scope of
the Executive's international negotiations would hamstring the
President in settling international controversies. Cf.
Pink,
supra, at 234-242 (Frankfurter, J., concurring) (noting the
unsoundness of transplanting "judicial subtleties" of domestic law
into "the solution of analogous problems between friendly
nations").
Generally, then, valid executive agreements are fit to preempt
state law, just as treaties are,9 and if the agreements
8 The Yalta and Potsdam Agreements envisioning dismantling of
Germany's industrial assets, public and private, and the followup
Paris Agreement aspiring to settle the claims of western nationals
against the German Government and private agencies were made as
executive agreements. See
supra, at 403 (citing agreements);
see also L. Margolis, Executive Agreements and Presidential Power
in Foreign Policy 15-16 (1986).
9 Subject, that is, to the Constitution's guarantees of
individual rights.
See
Reid v.
Covert, 354 U. S. 1, 15-19 (1957);
Boos v.
Barry, 485 U. S. 312, 324
(1988). Even Justice Sutherland's reading of the National
Government's "inherent" foreign affairs power in
United
States v.
Curtiss-Wright Export Corp., 299 U. S. 304 (1936),
contained the caveat that the power,
417
here had expressly preempted laws like HVIRA, the issue would be
straightforward. See
Belmont, supra, at 327, 331;
Pink,
supra, at 223, 230-231. But petitioners and the United States
as
amicus curiae both have to acknowledge that the
agreements include no preemption clause, and so leave their claim
of preemption to rest on asserted interference with the foreign
policy those agreements embody. Reliance is placed on our decision
in
Zschernig v.
Miller, 389 U. S. 429 (1968).
Zschernig dealt with an Oregon probate statute
prohibiting inheritance by a nonresident alien, absent showings
that the foreign heir would take the property "without
confiscation" by his home country and that American citizens would
enjoy reciprocal rights of inheritance there.
Id., at
430-431. Two decades earlier,
Clark v.
Allen,
331 U. S. 503
(1947), had held that a similar California reciprocity law "did not
on its face intrude on the federal domain,"
Zschernig,
supra, at 432, but by the time Zschernig (an East German
resident) brought his challenge, it was clear that the Oregon law
in practice had invited "minute inquiries concerning the actual
administration of foreign law," 389 U. S., at 435, and so was
providing occasions for state judges to disparage certain foreign
regimes, employing the language of the antiCommunism prevalent here
at the height of the Cold War, see id., at 440 (the Oregon law had
made "unavoidable judicial criticism of nations established on a
more authoritarian basis than our own"). Although the Solicitor
General, speaking for the State Department, denied that the state
statute "unduly interfere[d] with the United States' conduct of
foreign relations," id., at 434 (internal quotation marks omitted),
the Court was not deterred from exercising its own judgment to
invalidate the law as an "intrusion by the State into the field of
foreign affairs which the Constitution entrusts to the President
and the Congress," id., at 432.
"like every other governmental power, must be exercised in
subordination to the applicable provisions of the Constitution."
Id., at 320.
418
The
Zschernig majority relied on statements in a number
of previous cases open to the reading that state action with more
than incidental effect on foreign affairs is preempted, even absent
any affirmative federal activity in the subject area of the state
law, and hence without any showing of conflict. The Court cited the
pronouncement in
Hines v.
Davidowitz, 312 U. S. 52, 63 (1941),
that "[o]ur system of government is such that the interest of the
cities, counties and states, no less than the interest of the
people of the whole nation, imperatively requires that federal
power in the field affecting foreign relations be left entirely
free from local interference." See 389 U. S., at 432; id., at
442-443 (Stewart, J., concurring) (setting out the foregoing
quotation). Likewise, Justice Stewart's concurring opinion viewed
the Oregon statute as intruding "into a domain of exclusively
federal competence."
Id., at 442; see also
Belmont,
301 U. S., at 331 ("[C]omplete power over international affairs
is in the national government and is not and cannot be subject to
any curtailment or interference on the part of the several states"
(citing
Curtiss-Wright Export Corp., 299 U. S., at
316 et
seq.)).
Justice Harlan, joined substantially by Justice White, disagreed
with the
Zschernig majority on this point, arguing that its
implication of preemption of the entire field of foreign affairs
was at odds with some other cases suggesting that in the absence of
positive federal action "the States may legislate in areas of their
traditional competence even though their statutes may have an
incidental effect on foreign relations." 389 U. S., at 459 (opinion
concurring in result) (citing cases); see id., at 462 (White, J.,
dissenting).l0 Thus, for Justice Harlan it was crucial that the
challenge to the Oregon
10 Justice Harlan concurred in the majority's result because he
would have found the Oregon statute preempted by a 1923 treaty with
Germany. 389 U. S., at 457. This required overruling the Court's
construction of that treaty in
Clark v.
Allen,
331 U. S. 503
(1947), which Justice White, in dissent, declined to do, 389 U. S.,
at 462.
419
statute presented no evidence of a "specific interest of the
Federal Government which might be interfered with" by the law.
Id., at 459 (opinion concurring in result); see
id.,
at 461 (finding "no evidence of adverse effect in the record"). He
would, however, have found preemption in a case of "conflicting
federal policy," see id., at 458-459, and on this point the
majority and Justices Harlan and White basically agreed: state laws
"must give way if they impair the effective exercise of the
Nation's foreign policy," id., at 440 (opinion of the Court). See
also Pink, 315 U. S., at 230-231 ("[S]tate law must yield when it
is inconsistent with, or impairs ... the superior Federal policy
evidenced by a treaty or international compact or agreement"); id.,
at 240 (Frankfurter, J., concurring) (state law may not be allowed
to "interfer[e] with the conduct of our foreign relations by the
Executive").
It is a fair question whether respect for the executive foreign
relations power requires a categorical choice between the
contrasting theories of field and conflict preemption evident in
the
Zschernig opinions,l1 but the question requires
11 The two positions can be seen as complementary. If a State
were simply to take a position on a matter of foreign policy with
no serious claim to be addressing a traditional state
responsibility, field preemption might be the appropriate doctrine,
whether the National Government had acted and, if it had, without
reference to the degree of any conflict, the principle having been
established that the Constitution entrusts foreign policy
exclusively to the National Government. See,
e. g., Hines v.
Davidowitz, 312
U. S. 52, 63 (1941). Where, however, a State has acted within
what Justice Harlan called its "traditional competence," 389 U. S.,
at 459, but in a way that affects foreign relations, it might make
good sense to require a conflict, of a clarity or substantiality
that would vary with the strength or the traditional importance of
the state concern asserted. Whether the strength of the federal
foreign policy interest should itself be weighed is, of course, a
further question. Cf.
Rice v.
Santa Fe Elevator
Corp., 331 U. S.
218, 230 (1947) (congressional occupation of the field is not
to be presumed "in a field which the States have traditionally
occupied");
Boyle v.
United Technologies Corp.,
487 U. S. 500,
507-508 (1988) ("In an area of uniquely federal interest," "[t]he
conflict with federal policy need not be as sharp as that which
must exist for ordinary pre-emption").
420
no answer here. For even on Justice Harlan's view, the
likelihood that state legislation will produce something more than
incidental effect in conflict with express foreign policy of the
National Government would require preemption of the state law. And
since on his view it is legislation within "areas of ...
traditional competence" that gives a State any claim to prevail,
389 U. S., at 459, it would be reasonable to consider the strength
of the state interest, judged by standards of traditional practice,
when deciding how serious a conflict must be shown before declaring
the state law preempted. Cf.
Southern Pacific Co. v.
Arizona ex rel. Sullivan,
325 U. S. 761, 768-769
(1945) (under negative Commerce Clause, "reconciliation of the
conflicting claims of state and national power is to be attained
only by some appraisal and accommodation of the competing demands
of the state and national interests involved"); Henkin, Foreign
Affairs and the United States Constitution, at 164 (suggesting a
test that "balance[s] the state's interest in a regulation against
the impact on U. S. foreign relations"); Maier, Preemption of State
Law: A Recommended Analysis, 83 Am. J. Int'l L. 832, 834 (1989)
(similar). Judged by these standards, we think petitioners and the
Government have demonstrated a sufficiently clear conflict to
require finding preemption here.
IV A
To begin with, resolving Holocaust-era insurance claims that may
be held by residents of this country is a matter well within the
Executive's responsibility for foreign affairs. Since claims
remaining in the aftermath of hostilities may be "sources of
friction" acting as an "impediment to resumption of friendly
relations" between the countries involved,
Pink, supra, at
225, there is a "longstanding practice" of the national Executive
to settle them in discharging its responsibility to maintain the
Nation's relationships with other countries,
Dames &
Moore, 453 U. S., at 679. The issue of
421
restitution for Nazi crimes has in fact been addressed in
Executive Branch diplomacy and formalized in treaties and executive
agreements over the last half century, and although resolution of
private claims was postponed by the Cold War, securing private
interests is an express object of diplomacy today, just as it was
addressed in agreements soon after the Second World War.
Vindicating victims injured by acts and omissions of enemy
corporations in wartime is thus within the traditional subject
matter of foreign policy in which national, not state, interests
are overriding, and which the N ational Government has
addressed.
The exercise of the federal executive authority means that state
law must give way where, as here, there is evidence of clear
conflict between the policies adopted by the two. The foregoing
account of negotiations toward the three settlement agreements is
enough to illustrate that the consistent Presidential foreign
policy has been to encourage European governments and companies to
volunteer settlement funds in preference to litigation or coercive
sanctions. See also,
e. g., Hearings on H. R. 2693 before
the Subcommittee of Government Efficiency, Financial Management and
Intergovernmental Relations of the House Committee on Government
Reform, 107th Cong., 2d Sess., 24 (2002) (statement of Ambassador
Randolph M. Bell that it is the "policy of the U. S. Government"
"to resolve matters of Holocaust-era restitution and compensation
through dialogue, negotiation, and cooperation"); Hearings on the
Status of Insurance Restitution for Holocaust Victims and the Heirs
before the House Committee on Government Reform, 107th Cong., 1st
Sess., 77 (2001) (statement of Ambassador J. D. Bindenagel to the
same effect). As for insurance claims in particular, the national
position, expressed unmistakably in the executive agreements signed
by the President with Germany and Austria, has been to encourage
European insurers to work with the ICHEIC to develop acceptable
claim procedures, including procedures governing disclosure of
policy information.
422
See German Foundation Agreement, 39 Int'l Legal Materials, at
1299, 1303 (declaring the German Foundation to be the "exclusive
forum" for demands against German companies and agreeing to have
insurance claims resolved under procedures developed through
negotiation with the ICHEIC); Agreement Relating to the Agreement
of October 24, 2000, Concerning the Austrian Fund "Reconciliation,
Peace and Cooperation," Jan. 23, 2001, 2001 WL 935261, Annex A, §
2(n) (same for Austria). This position, of which the agreements are
exemplars, has also been consistently supported in the high levels
of the Executive Branch, as mentioned already,
supra, at
411. See also,
e. g., Hearing before the Committee on House
Banking and Financial Services, 106th Cong., 2d Sess., 173 (2000)
(Deputy Secretary Eizenstat statement that "[t]he U. S. Government
has supported [the ICHEIC] since it began, and we believe it should
be considered the exclusive remedy for resolving insurance claims
from the World War II era"); Hearings on H. R. 2693, at 24
(statement by Ambassador Bell to the same effect); Hearing on the
Legacies of the Holocaust before the Senate Committee on Foreign
Relations, 106th Cong., 2d Sess., 23 (2000) (Eizenstat testimony
that a company's participation in the ICHEIC should give it "'safe
haven' from sanctions, subpoenas, and hearings relative to the
Holocaust period").12 The approach taken serves to resolve the
several competing matters of national concern apparent in the
German Foundation Agreement: the national interest in maintaining
amica-
12 In
Barclays Bank PLC v.
Franchise Tax Bd. of
Cal., 512 U. S.
298, 328-330 (1994), we declined to give policy statements by
Executive Branch officials conclusive weight as against an opposing
congressional policy in determining whether California's "worldwide
combined reporting" tax method violated the Foreign Commerce
Clause. The reason, we said, is that "[t]he Constitution expressly
grants Congress, not the President, the power to 'regulate Commerce
with foreign Nations.'"
Id., at 329 (quoting Art. I, § 8,
cl. 3). As we have discussed, however, in the field of foreign
policy the President has the "lead role."
First Nat. City
Bank v.
Banco Nacional de Cuba, 406 U. S. 759, 767
(1972).
423
ble relationships with current European allies; survivors'
interests in a "fair and prompt" but nonadversarial resolution of
their claims so as to "bring some measure of justice ... in their
lifetimes"; and the companies' interest in securing "legal peace"
when they settle claims in this fashion. 39 Int'l Legal Materials,
at 1304. As a way for dealing with insurance claims, moreover, the
voluntary scheme protects the companies' ability to abide by their
own countries' domestic privacy laws limiting disclosure of policy
information. See Brief for Federal Republic of Germany as
Amicus
Curiae 12-13.13
California has taken a different tack of providing regulatory
sanctions to compel disclosure and payment, supplemented by a new
cause of action for Holocaust survivors if the other sanctions
should fail. The situation created by the California legislation
calls to mind the impact of the Massachusetts Burma law on the
effective exercise of the President's power, as recounted in the
statutory preemption case,
Crosby v.
National Foreign
Trade Council, 530 U. S. 363 (2000).
HVIRA's economic compulsion to make public disclosure, of far more
information about far more policies than ICHEIC rules require,
employs "a different, state system of economic pressure," and in
doing so undercuts the Presi-
13 The dissent would discount the executive agreements as
evidence of the Government's foreign policy governing disclosure,
saying they "do not refer to state disclosure laws specifically, or
even to information disclosure generally."
Post, at 441
(opinion of GINSBURG, J.). But this assertion gives short shrift to
the agreements' express endorsement of the ICHEIC's voluntary
mechanism, which encompasses production of policy information, not
just actual payment of unpaid claims. See
supra, at 406407.
The dissent would also dismiss the other Executive Branch
expressions of the Government's policy, see
supra, at 411,
422, insisting on nothing short of a formal statement by the
President himself, see
post, at 441-443. But there is no
suggestion that these high-level executive officials were not
faithfully representing the President's chosen policy, and there is
no apparent reason for adopting the dissent's "nondelegation" rule
to apply within the Executive Branch.
424
dent's diplomatic discretion and the choice he has made
exercising it.
Id., at 376. Whereas the President's
authority to provide for settling claims in winding up
international hostilities requires flexibility in wielding "the
coercive power of the national economy" as a tool of diplomacy,
id., at 377, HVIRA denies this, by making exclusion from a large
sector of the American insurance market the automatic sanction for
noncompliance with the State's own policies on disclosure. "Quite
simply, if the [California] law is enforceable the President has
less to offer and less economic and diplomatic leverage as a
consequence."
Ibid. (citing
Dames &
Moore,
453 U. S., at 673). The law thus "compromise[s] the very
capacity of the President to speak for the Nation with one voice in
dealing with other governments" to resolve claims against European
companies arising out of World War II. 530 U. S., at 381.14
Crosby's facts are replicated again in the way HVIRA
threatens to frustrate the operation of the particular mechanism
the President has chosen. The letters from Deputy Secretary
Eizenstat to California officials show well enough how the portent
of further litigation and sanctions has in fact placed the
Government at a disadvantage in obtaining practical results from
persuading "foreign governments and foreign companies to
participate voluntarily in organizations such as ICHEIC." Brief for
United States as
Amicus Curiae 15; see also SER 1267, 1272
(Joint Statement with Switzerland noting the "potentially
disruptive and counterproductive effects" of laws like HVIRA and
promising effort by
14 It is true that the President in this case is acting without
express congressional authority, and thus does not have the
"plenitude of Executive authority" that "controll[ed] the issue of
preemption" in
Crosby v.
National Foreign Trade
Council, 530 U.
S. 363, 376 (2000). But in
Crosby we were careful to
note that the President possesses considerable independent
constitutional authority to act on behalf of the United States on
international issues, id., at 381, and conflict with the exercise
of that authority is a comparably good reason to find preemption of
state law.
425
the United States to call on state legislatures "to refrain from
taking unwarranted investigative initiatives or from threatening or
actually using sanctions against Swiss insurers"). In addition to
thwarting the Government's policy of repose for companies that pay
through the ICHEIC, California's indiscriminate disclosure
provisions place a handicap on the ICHEIC's effectiveness (and
raise a further irritant to the European allies) by undercutting
European privacy protections. See ER 1182, 3131 (opinions of the
German Government that public disclosure of all European insurance
policies "is not permissible" under German privacy law); Brief for
United States as
Amicus Curiae 18 (noting protests from the
German and Swiss Governments). It is true, of course, as it is
probably true of all elements of HVIRA, that the disclosure
requirement's object of obtaining compensation for Holocaust
victims is a goal espoused by the National Government as well. But
"[t]he fact of a common end hardly neutralizes conflicting means,"
Crosby, supra, at 379, and here HVIRA is an obstacle to the
success of the National Government's chosen "calibration of force"
in dealing with the Europeans using a voluntary approach, 530 U.
S., at 380.
B
The express federal policy and the clear conflict raised by the
state statute are alone enough to require state law to yield. If
any doubt about the clarity of the conflict remained, however, it
would have to be resolved in the National Government's favor, given
the weakness of the State's interest, against the backdrop of
traditional state legislative subject matter, in regulating
disclosure of European Holocaust-era insurance policies in the
manner of HVIRA.
The commissioner would justify HVIRA's ambitious disclosure
requirement as protecting "legitimate consumer protection
interests" in knowing which insurers have failed to pay insurance
claims. Brief for Respondent 1, 42-44. But, quite unlike a
generally applicable "blue sky" law, HVIRA
426
effectively singles out only policies issued by European
companies, in Europe, to European residents, at least 55 years ago.
Cal. Ins. Code Ann. § 13804(a) (West Cum. Supp. 2003); see also §
790.15(a) (mandating license suspension only for "fail[ure] to pay
any valid claim from Holocaust survivors"). Limiting the public
disclosure requirement to these policies raises great doubt that
the purpose of the California law is an evaluation of corporate
reliability in contemporary insuring in the State.
Indeed, there is no serious doubt that the state interest
actually underlying HVIRA is concern for the several thousand
Holocaust survivors said to be living in the State. § 13801(d)
(legislative finding that roughly 5,600 documented Holocaust
survivors reside in California). But this fact does not displace
general standards for evaluating a State's claim to apply its forum
law to a particular controversy or transaction, under which the
State's claim is not a strong one. "Even if a plaintiff evidences
his desire for forum law by moving to the forum, we have generally
accorded such a move little or no significance."
Phillips
Petroleum Co. v.
Shutts, 472 U. S. 797, 820
(1985); see
Allstate Ins. Co. v.
Hague, 449 U. S. 302, 311 (1981)
("[A] postoccurrence change of residence to the forum
State-standing alone-ens insufficient to justify application of
forum law").
But should the general standard not be displaced, and the
State's interest recognized as a powerful one, by virtue of the
fact that California seeks to vindicate the claims of Holocaust
survivors? The answer lies in recalling that the very same
objective dignifies the interest of the National Government in
devising its chosen mechanism for voluntary settlements, there
being about 100,000 survivors in the country, only a small fraction
of them in California. ER 870 (press release of insurance
commissioner of California); Bazyler, 34 Rich. L. Rev., at 8, n.
11. As against the responsibility of the United States of America,
the humanity underlying the
427
state statute could not give the State the benefit of any doubt
in resolving the conflict with national policy.
C
The basic fact is that California seeks to use an iron fist
where the President has consistently chosen kid gloves. We have
heard powerful arguments 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 the European Allies, the
iron fist 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. The question relevant to
preemption in this case is conflict, and the evidence here is "more
than sufficient to demonstrate that the state Act stands in the way
of [the President's] diplomatic objectives."
Crosby, supra,
at 386.
v
The State's remaining submission is that even if HVIRA does
interfere with Executive Branch foreign policy, Congress authorized
state law of this sort in the McCarranFerguson Act, 59 Stat. 33,
ch. 20, 15 U. S. C. §§ 1011-1015, and the more recent U. S.
Holocaust Assets Commission Act of 1998 (Holocaust Commission Act),
112 Stat. 611, note following 22 U. S. C. § 1621. There is,
however, no need to consider the possible significance for
preemption doctrine of tension between an Act of Congress and
Presidential foreign policy, cf. generally
Youngstown Sheet
&
Tube Co. v.
Sawyer, 343 U. S., at 637-638
(Jackson, J., concurring in judgment and opinion of Court), for
neither statute does the job the commissioner ascribes to it.
The provisions of the McCarran-Ferguson Act said to be relevant
here specify that "[t]he business of insurance" shall be recognized
as a subject of state regulation, 15 U. S. C.
428
§ 1012(a), which will be good against preemption by federal
legislation unless that legislation "specifically relates to the
business of insurance," § 1012(b); see also § 1011 (policy behind §
1012 is that "continued regulation and taxation by the several
States of the business of insurance is in the public interest" and
"silence on the part of the Congress shall not be construed to
impose any barrier to the regulation or taxation of such business
by the several States"). As the text itself makes clear, the point
of McCarran- Ferguson's legislative choice of leaving insurance
regulation generally to the States was to limit congressional
preemption under the commerce power, whether dormant or exercised.
Compare
Prudential Ins. Co. v.
Benjamin, 328 U. S. 408, 429-430
(1946), with
United States v.
South-Eastern Underwriters
Assn., 322 U. S.
533 (1944); see
Department of Treasury v.
Fabe,
508 U. S. 491,
499-500 (1993). Quite apart, then, from any doubt whether HVIRA
would qualify as regulating "the business of insurance" given its
tangential relation to present-day insuring in the State, see
FTC v.
Travelers Health Assn., 362 U. S. 293, 300-301
(1960) (McCarranFerguson was not intended to allow a State to
"regulate activities carried on beyond its own borders"), a federal
statute directed to implied preemption by domestic commerce
legislation cannot sensibly be construed to address preemption by
executive conduct in foreign affairs.
Nor does the Holocaust Commission Act authorize HVIRA. That Act
set up a Presidential Commission to "study and develop a historical
record of the collection and disposition" of Holocaust-era assets
that "came into the possession or control of the Federal
Government." Pub. L. 105-186, § 3(a)(1), 112 Stat. 612. For this
purpose, Congress directed the Commission to "encourage the
National Association of Insurance Commissioners to prepare a report
on the Holocaust-related claims practices of all insurance
companies, both domestic and foreign, doing business in the
429
United States at any time after January 30,1933, that issued any
individual life, health, or property-casualty insurance policy to
any individual on any list of Holocaust victims." § 3(a)(4)(A), 112
Stat. 613. These provisions are no help to HVIRA. The Commission's
focus was limited to assets in the possession of the Government,
and if anything, the federal Act assumed it was the National
Government's responsibility to deal with returning those assets.
See § 3(d), 112 Stat. 614 (President to collect recommendations
from the commission and submit a suggested plan for "legislative,
administrative, or other action" to Congress). In any event, the
federal Act's reference to the state insurance commissioners as
compiling information was expressly limited "to the degree the
information is available," § 3(a)(4)(B), 112 Stat. 613, a proviso
that can hardly be read to condone state sanctions interfering with
federal efforts to resolve such claims.
Indeed, it is worth noting that Congress has done nothing to
express disapproval of the President's policy. Legislation along
the lines of HVIRA has been introduced in Congress repeatedly, but
none of the bills has come close to making it into law. See H. R.
1210, 108th Cong., 1st Sess. (2003); S. 972, 108th Cong., 1st Sess.
(2003); H. R. 2693, 107th Cong., 1st Sess. (2001); H. R. 126, 106th
Cong., 1st Sess. (1999).
In sum, Congress has not acted on the matter addressed here.
Given the President's independent authority "in the areas of
foreign policy and national security, ... congressional silence is
not to be equated with congressional disapproval."
Haig v.
Agee, 453 U.
S. 280, 291 (1981).
VI
The judgment of the Court of Appeals for the Ninth Circuit is
reversed.
So ordered.
430
JUSTICE GINSBURG, with whom JUSTICE STEVENS, JusTICE SCALIA, and
JUSTICE THOMAS join, dissenting.
Responding to Holocaust victims' and their descendents'
long-frustrated efforts to collect unpaid insurance proceeds,
California's Holocaust Victim Insurance Relief Act of 1999 (HVIRA),
Cal. Ins. Code Ann. § 13800
et seq. (West Cum. Supp. 2003),
requires insurance companies operating in the State to disclose
certain information about insurance policies they or their
affiliates wrote in Europe between 1920 and 1945. In recent years,
the Executive Branch of the Federal Government has become more
visible in this area, undertaking foreign policy initiatives aimed
at resolving Holocaustera insurance claims. Although the federal
approach differs from California's, no executive agreement or other
formal expression of foreign policy disapproves state disclosure
laws like the HVIRA. Absent a clear statement aimed at disclosure
requirements by the "one voice" to which courts properly defer in
matters of foreign affairs, I would leave intact California's
enactment.
I
As the Court observes,
ante, at 401-402, and n. 1, the
Nazi regimentation of inhumanity we characterize as the Holocaust,
marked most horrifically by genocide and enslavement, also entailed
widespread destruction, confiscation, and theft of property
belonging to Jews. For insurance policies issued in Germany and
other countries under Nazi control, historical evidence bears out,
the combined forces of the German Government and the insurance
industry engaged in larcenous takings of gigantic proportions. For
example, insurance policies covered many of the Jewish homes and
businesses destroyed in the state-sponsored pogrom known as
Kristallnacht. By order of the Nazi regime, claims arising out of
the officially enabled destruction were made payable not to the
insured parties, but to the State. M. Bazyler, Holocaust Justice:
The Battle for Restitution in America's Courts 114 (2003). In what
one historian called a "charade
431
concocted by insurers and ministerial officials," insurers
satisfied property loss claims by paying the State only a fraction
of their full value. G. Feldman, Allianz and the German Insurance
Business, 1933-1945, p. 227 (2001); see Bazyler,
supra, at
114; App. 27-28 (declaration of Rabbi Abraham Cooper, Assoc. Dean,
Simon Wiesenthal Center) ("There is documentary evidence that the
insurance companies paid only one-half of the Jewish insurance
proceeds to the Reich and kept the other half for
themselves.").
The Court depicts Allied diplomacy after World War II as aimed
in part at settling confiscated and unpaid insurance claims.
Ante, at 403. But the multilateral negotiations that
produced the Potsdam, Yalta, and like accords failed to achieve any
global resolution of such claims. European insurers, encountering
no official compulsion, were themselves scarcely inclined to settle
claims; turning claimants away, they relied on the absence of
formal documentation and other technical infirmities that legions
of Holocaust survivors were in no position to remedy. See,
e. g., Hearings on H. R. 2693 before the Subcommittee on
Government Efficiency, Financial Management and Intergovernmental
Relations of the House Committee on Government Reform, 107th Cong.,
2d Sess., 14-15 (2002) (statement of Rep. Waxman) ("Some survivors
were rejected because they could not produce death certificates for
loved ones who perished in Nazi concentration camps. Other
insurance companies took advantage of the fact that claimants had
no policy documents to prove their policy existed."). For over five
decades, untold Holocaust-era insurance claims went unpaid.
Id., at 38 (statement of Leslie Tick, California Dept. of
Insurance).
In the late 1990's, litigation in American courts provided a
spur to action. See Bazyler,
supra, at xi; Feldman,
supra, at vii; Neuborne, Preliminary Reflections on Aspects
of Holocaust- Era Litigation in American Courts, 80 Wash. U. L. Q.
795, 796 (2002). Holocaust survivors and their descendents
initiated class-action suits against German and
432
other European firms seeking compensation for,
inter
alia, the confiscation of Jewish bank assets, the use of Jewish
slave labor, and the failure to pay Jewish insurance claims. See
generally Bazyler,
supra, at 1-171.
In the insurance industry, the litigation propelled a number of
European companies to agree on a framework for resolving unpaid
claims outside the courts. This concord prompted the 1998 creation
of the International Commission on Holocaust Era Insurance Claims
(ICHEIC). A voluntary claims settlement organization, ICHEIC
comprises several European insurers, Jewish and Holocaust survivor
organizations, the State of Israel, and this country's National
Association of Insurance Commissioners. See S. Eizenstat, Imperfect
Justice 266 (2003); Bazyler,
supra, at 132.
As the Court observes,
ante, at 407, ICHEIC has
formulated procedures for the filing, investigation, valuation, and
resolution of Holocaust-era insurance claims. At least until very
recently, however, ICHEIC's progress has been slow and insecure.
See
In re Assicurazioni Generali S.
p. A. Holocaust Ins.
Litig., 228 F. Supp. 2d 348, 358 (SDNY 2002) (quoting a 2001
press account describing ICHEIC as having "repeatedly been at the
point of collapse since its inception in 1998"). Initially,
ICHEIC's insurance company members represented little more than
one-third of the Holocaust-era insurance market. See App. 32
(declaration of Leslie Tick, California Dept. of Insurance) ("The
five insurance company members of the ICHEIC represent
approximately 35.5% of the pre-World War II European insurance
market."); Eizenstat,
supra, at 268 (despite repeated
assurances that
all German insurance companies would join
ICHEIC, "[t]hey never have to this day"). Petitioners note that
participation in ICHEIC has expanded in the past year, see Reply
Brief 8-9, but it remains unclear whether ICHEIC does now or will
ever encompass all relevant insurers.
Moreover, ICHEIC has thus far settled only a tiny proportion of
the claims it has received. See Eizenstat,
supra, at
433
267 ("ICHEIC's administrative failings led to few claims paid
and large costs."). Evidence submitted in a series of class actions
filed against Italian insurer Generali indicated that by November
2001, ICHEIC had resolved only 797 of 77,000 claims. See
In re
Assicurazioni Generali, 228 F. Supp.2d, at 357. The latest
reports show only modest increases. See Treaster, Holocaust List Is
Unsealed by Insurers, N. Y. Times, Apr. 29, 2003, section A, p. 26,
col. 6 ("In more than four years of operation [ICHEIC] has offered
$38.2 millionor just short of the $40 million it had spent on
expenses as of 18 months ago-to 3,006 claimants.").
Finally, although ICHEIC has directed its members to publish
lists of unpaid Holocaust-era policies, that nonbinding directive
had not yielded significant compliance at the time this case
reached the Court. See Brief for Respondent 10; Bazyler, Holocaust
Justice, at 132 ("Using the ICHEIC process, the European insurers
have been able to ... avoid revealing the names of possible claim
holders."). Shortly after oral argument, ICHEIC-participating
German insurers made more substantial disclosures. See N. Y. Times,
supra, at 26 (list of 363,232 names published in April
2003). But other insurers have been less forthcoming. For a prime
example, Generali-which may have sold more life insurance and
annuity policies in Eastern Europe during the Holocaust than any
other company, see Bazyler,
supra, at 113-reportedly
maintains a 340,000-name list of persons to whom it sold insurance
between 1918 and 1945, but has refused to disclose the bulk of the
information on the list. See App. 37-38 (declaration of Leslie
Tick, California Dept. of Insurance); Brief for Respondent 5.
II A
California's disclosure law, the HVIRA, was enacted a year after
ICHEIC's formation. Observing that at least 5,600 documented
Holocaust survivors reside in California,
434
Cal. Ins. Code Ann. § 13801(d) (West Cum. Supp. 2003), the HVIRA
declares that "[i]nsurance companies doing business in the State of
California have a responsibility to ensure that any involvement
they or their related companies may have had with insurance
policies of Holocaust victims [is] disclosed to the state," §
13801(e). The HVIRA accordingly requires insurance companies doing
business in California to disclose information concerning insurance
policies they or their affiliates sold in Europe between 1920 and
1945, § 13804(a), and directs California's Insurance Commissioner
to store the information in a publicly accessible "Holocaust Era
Insurance Registry," § 13803. The Commissioner is further directed
to suspend the license of any insurer that fails to comply with the
HVIRA's reporting requirements. § 13806.
These measures, the HVIRA declares, are "necessary to protect
the claims and interests of California residents, as well as to
encourage the development of a resolution to these issues through
the international process or through direct action by the State of
California, as necessary." § 13801(f). Information published in the
HVIRA's registry could, for example, reveal to a Holocaust survivor
residing in California the existence of a viable claim, which she
could then present to ICHEIC for resolution.1
The Court refers,
ante, at 408-409, 426, to a number of
other California statutory provisions enabling the litigation
1 In addition, California may deem an insurer's or its
affiliate's continuing failure to resolve Holocaust-era claims
relevant marketplace information for California consumers. See
Brief for Respondent 42-44; Brief for National Association of
Insurance Commissioners as
Amicus Curiae 1113. The Court
discounts the HVIRA's pursuit of this objective, stressing that the
HVIRA covers only certain policies issued in Europe more than 50
years ago.
Ante, at 425-426. But States have broad authority
to regulate the insurance industry,
Western &
Southern Life Ins. Co. v.
State Bd. of Equalization
ofCal., 451 U. S.
648,653-655 (1981), and a State does not exceed that authority
by assigning special significance to an insurer's treatment of
claims arising out of an era in which government and industry
collaborated to rob countless Holocaust victims of their
property.
435
of Holocaust-era insurance claims in California courts. Those
provisions, it bears emphasis, are not at issue here. The HVIRA
imposes no duty to pay any claim, nor does it authorize litigation
on any claim. It mandates only information
disclosure, and
our assessment of the HVIRA is properly confined to that
requirement alone.
B
The Federal Government, after prolonged inaction, has responded
to the Holocaust-era insurance issue by diplomatic means. Executive
agreements with Germany, Austria, and France, the Court observes,
are the principal expressions of the federal approach.
Ante,
at 413. Signed in July 2000, the German Foundation Agreement
establishes a voluntary foundation, funded by public and private
sources, to address Holocaust-era claims. Agreement Concerning the
Foundation "Remembrance, Responsibility and the Future," 39 Int'l
Legal Materials 1298 (2000).2 "[I]t would be in the interests of
both parties," the agreement declares, "for the Foundation to be
the exclusive remedy and forum for addressing ... all claims that
have been or may be asserted against German companies arising from
the National Socialist era and World War II."
Id., at 1299.
In the case of insurance, the agreement endorses ICHEIC as the
appropriate forum for claims resolution.
Ibid.
The German Foundation Agreement commits the Federal Government
to certain conduct. It provides, for example, that when a German
company is sued in a United States court on a Holocaust-era claim,
the Federal Government will file with the court a statement that
"the President of the United States has concluded 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
2 The executive agreements with Austria and France are
comparable.
See
ante, at 408, and n. 3.
436
from their involvement in the National Socialist era and World
War II."
Id., at 1303. The agreement also provides that
"[t]he United States will recommend dismissal on any valid legal
ground (which, under the U. S. system of jurisprudence, will be for
the U. S. courts to determine)."
Ibid. The agreement makes
clear, however, that "[t]he United States does not suggest that its
policy interests concerning the Foundation in themselves provide an
independent legal basis for dismissal."
Id., at 1304.
III A
The President's primacy in foreign affairs, I agree with the
Court, empowers him to conclude executive agreements with other
countries.
Ante, at 415. Our cases do not catalog the
subject matter meet for executive agreement,3 but we have
repeatedly acknowledged the President's authority to make such
agreements to settle international claims.
Ante, at 415-416.
And in settling such claims, we have recognized, an executive
agreement may preempt otherwise permissible state laws or
litigation.
Ante, at 416-417. The executive agreements to
which we have accorded preemptive effect, however, warrant closer
inspection than the Court today endeavors.
In
United States v.
Belmont, 301 U. S. 324 (1937), the
Court addressed the Litvinov Assignment, an executive agreement
incidental to the United States' recognition of the Soviet Union.
Under the terms of the agreement, the Soviet Union assigned to the
United States all its claims against American nationals, including
claims against New
3 "One is compelled to conclude that there are agreements which
the President can make on his sole authority and others which he
can make only with the consent of the Senate (or of both houses),
but neither Justice Sutherland [in
United States v.
Belmont, 301
U. S. 324 (1937)] nor anyone else has told us which are which."
L. Henkin, Foreign Mfairs and the United States Constitution 222
(2d ed. 1996).
437
York banks holding accounts of Russian nationals that the Soviet
Government had earlier nationalized. The Federal Government sued to
recover the accounts thus assigned to it. Applying New York law,
the lower courts refused to enforce the assignment; those courts
held that the accountnationalization upon which the assignment
rested contravened public policy.
Id., at 325-327. This
Court reversed, concluding that "no state policy can prevail
against the international compact here involved."
Id., at
327. The Litvinov Assignment clearly assigned to the United States
the claims in issue; the enforceability of that assignment, the
Court stressed, "is not and cannot be subject to any curtailment or
interference on the part of the several states."
Id., at
331.
United States v.
Pink, 315 U. S. 203 (1942),
again addressed state-imposed obstacles to the Litvinov Assignment.
Reiterating its holding in
Belmont, the Court confirmed that
no State may "deny enforcement of a claim under the Litvinov
Assignment because of an overriding policy of the State." 315 U.
S., at 222. Pointing both to the assignment itself and to a later
exchange of diplomatic correspondence clarifying its scope, see
id., at 224-225, and n. 7, the Court saw no "serious doubt that
claims of the kind here in question were included" in the "broad
and inclusive" assignment, id., at 224.
Four decades later, in
Dames &
Moore v.
Regan, 453 U.
S. 654 (1981), the Court gave effect to an executive agreement
arising out of the Iran hostage crisis. One of the agreement's
announced "purpose[s]" was "to terminate all litigation as between
the Government of each party and the nationals of the other, and to
bring about the settlement and termination of all such claims
through binding arbitration."
Id., at 665 (quoting the
agreement). The agreement called for the formation of an
Iran-United States Claims Tribunal to arbitrate claims not settled
within six months.
Ibid. In addition, under the agreement
the United States undertook
438
"to terminate all legal proceedings in United States courts
involving claims of United States persons and institutions against
Iran and its state enterprises, to nullify all attachments and
judgments obtained therein, to prohibit all further litigation
based on such claims, and to bring about the termination of such
claims through binding arbitration." Ibid. (internal
quotation marks omitted).
In line with these firm commitments, the Court held that the
agreement and the executive order implementing it validly
"suspended" litigation in United States courts against Iranian
interests. See id., at 686-688.
Notably, the Court in
Dames &
Moore was
emphatic about the "narrowness" of its decision.
Id., at
688. "We do not decide," the Court cautioned, "that the President
possesses plenary power to settle claims, even as against foreign
governmental entities."
Ibid. Before sustaining the
President's action, the Court determined: (1) Congress "had
implicitly approved" the practice of claim settlement by executive
agreement, id., at 680; (2) the alternative forum created under the
executive agreement was "capable of providing meaningful relief,"
id., at 687; (3) Congress had not in any way disapproved or
resisted the President's action, id., at 687-688; and (4) the
settlement of claims was "a necessary incident to the resolution of
a major foreign policy dispute between our country and another,"
id., at 688.
Together,
Belmont, Pink, and
Dames &
Moore confirm that executive agreements directed at claims
settlement may sometimes preempt state law. The Court states that
if the executive "agreements here had expressly preempted laws like
HVIRA, the issue would be straightforward."
Ante, at
416-417. One can safely demur to that statement, for, as the Court
acknowledges, no executive agreement before us expressly preempts
the HVIRA.
Ante, at 417. Indeed, no agreement so much as
mentions the HVIRA's sole concern: public disclosure.
439
B
Despite the absence of express preemption, the Court holds that
the HVIRA interferes with foreign policy objectives implicit in the
executive agreements. See
ibid. I would not venture down
that path.
The Court's analysis draws substantially on
Zschernig
v.
Miller, 389
U. S. 429 (1968). In that case, the Oregon courts had applied
an Oregon escheat statute to deny an inheritance to a resident of a
Communist bloc country. The Oregon courts so ruled because the
claimant failed to satisfy them that his country's laws would allow
U. S. nationals to inherit estates, nor had the claimant shown he
would actually receive payments from the Oregon estate with no
confiscation by his home government.
Id., at 432. Applying
Oregon's statutory conditions, the Court concluded, required Oregon
courts to "launc[h] inquiries into the type of governments that
obtain in particular foreign nations," id., at 434, rendering
"unavoidable judicial criticism of nations established on a more
authoritarian basis than our own," id., at 440. Such criticism had
a "direct impact upon foreign relations," the Court said, id., at
441, and threatened to "impair the effective exercise of the
Nation's foreign policy," id., at 440. The Court therefore held the
statute unconstitutional as applied in that case.
Id., at
433-434. But see
id., at 432 ("We do not accept the
invitation to re-examine our ruling in
Clark v.
Allen
[
331 U. S. 503
(1947)]," which held a substantively similar California statute
facially constitutional.).
We have not relied on
Zschernig since it was decided, and
I would not resurrect that decision here. The notion of "dormant
foreign affairs preemption" with which
Zschernig is
associated resonates most audibly when a state action "reflect[s] a
state policy critical of foreign governments and involve[s]
'sitting in judgment' on them." L. Henkin, Foreign Affairs and the
United States Constitution 164 (2d ed. 1996); see Constitutionality
of South African Divestment Statutes Enacted by State and Local
Governments, lOOp. Off. Legal
440
Counsel 49, 50 (1986) ("[W]e believe that
[Zschernig]
represents the Court's reaction to a particular regulatory statute,
the operation of which intruded extraordinarily deeply into foreign
affairs."). The HVIRA entails no such state action or policy. It
takes no position on any contemporary foreign government and
requires no assessment of any existing foreign regime. It is
directed solely at private insurers doing business in California,
and it requires them solely to disclose information in their or
their affiliates' possession or control. I would not extend
Zschernig into this dissimilar domain.4
Neither would I stretch
Belmont, Pink, or
Dames
& Moore to support implied preemption by executive agreement.
In each of those cases, the Court gave effect to the express terms
of an executive agreement. In
Dames & Moore, for
example, the Court addressed an agreement explicitly extinguishing
certain suits in domestic courts. 453 U. S., at 665; see
supra, at 437-438. Here, however, none of the executive
agreements extinguish any underlying claim for relief. See
Neuborne, 80 Wash. U. L. Q., at 824, n. 10l. The United States has
agreed to file precatory statements advising courts that dismissing
Holocaust-era claims accords with American foreign policy, but the
German Foundation Agreement confirms that such statements have no
legally binding effect. See 39 Int'l Legal Materials, at 1304;
supra, at 436. It remains uncertain, therefore, whether even
litigation on Holocaust-era insurance claims must be abated
in deference to the German Foundation Agreement or the parallel
agreements with Austria and France. Indeed, ambigu-
4The Court also places considerable weight on
Crosby v.
National Foreign Trade Council, 530 U. S. 363 (2000). As
the Court acknowledges, however,
ante, at 423,
Crosby
was a statutory preemption case. The state law there at issue posed
"an obstacle to the accomplishment of Congress's full objectives
under the [relevant] federal Act." 530 U. S., at 373. That
statutory decision provides little support for preempting a state
law by inferring preclusive foreign policy objectives from
precatory language in executive agreements.
441
ity on this point appears to have been the studied aim of the
American negotiating team. See Eizenstat, Imperfect Justice, at
272-273 (describing the "double negative" that satisfied German
negotiators and preserved the flexibility sought by Justice
Department litigators).
If it is uncertain whether insurance
litigation may
continue given the executive agreements on which the Court relies,
it should be abundantly clear that those agreements leave
disclosure laws like the HVIRA untouched. The contrast with
the Litvinov Assignment at issue in
Belmont and
Pink
is marked. That agreement spoke directly to claim assignment in no
uncertain terms;
Belmont and
Pink confirmed that
state law could not invalidate the very assignments accomplished by
the agreement. See
supra, at 436-437. Here, the Court
invalidates a state disclosure law on grounds of conflict with
foreign policy "embod[iedJ" in certain executive agreements,
ante, at 417, although those agreements do not refer to
state disclosure laws specifically, or even to information
disclosure generally. 5 It therefore is surely an exaggeration to
assert that the "HVIRA threatens to frustrate the operation of the
particular mechanism the President has chosen" to resolve
Holocaust-era claims.
Ante, at 424. If that were so, one
might expect to find some reference to laws like the HVIRA in the
later-in-time executive agreements. There is none.
To fill the agreements' silences, the Court points to statements
by individual members of the Executive Branch. See
ante, at
411 (letters from Deputy Secretary of the Treas-
5 The Court apparently finds in the executive agreements'
"express endorsement of ICHEIC's voluntary mechanism" a federal
purpose to preempt any information disclosure mechanism not
controlled by ICHEIC itself.
Ante, at 423, n. 13. But
nothing in the executive agreements suggests that the Federal
Government supports the resolution of Holocaustera insurance claims
only to the extent they are based upon information disclosed by
ICHEIC. The executive agreements do not, for example, prohibit
recourse to ICHEIC to resolve claims based upon information
disclosed through laws like the HVIRA.
442
ury Stuart Eizenstat to California Governor Gray Davis and the
Insurance Commissioner of California);
ante, at 422
(testimony before Congress by Eizenstat, stating that a company's
participation in ICHEIC should give it "safe haven from sanctions,
subpoenas, and hearings relative to the Holocaust period" (internal
quotation marks omitted)). But we have never premised foreign
affairs preemption on statements of that order. Cf.
Barclays
Bank PLC v.
Franchise Tax Bd. of Cal., 512 U. S. 298, 329-330
(1994) ("Executive Branch actions-press releases, letters, and
amicus briefs"-that "express federal policy but lack the
force of law" cannot render a state law unconstitutional under the
Foreign Commerce Clause.). We should not do so here lest we place
the considerable power of foreign affairs preemption in the hands
of individual sub-Cabinet members of the Executive Branch.
Executive officials of any rank may of course be expected
"faithfully [to] represen[t] the President's chosen policy,"
ante, at 423, n. 13, but no authoritative text accords such
officials the power to invalidate state law simply by conveying the
Executive's views on matters of federal policy. The displacement of
state law by preemption properly requires a considerably more
formal and binding federal instrument.
Sustaining the HVIRA would not compromise the President's
ability to speak with one voice for the Nation. See
ante, at
424. To the contrary, by declining to invalidate the HVIRA in this
case, we would reserve foreign affairs preemption for circumstances
where the President, acting under statutory or constitutional
authority, has spoken clearly to the issue at hand. "[T]he Framers
did not make the judiciary the overseer of our government."
Dames & Moore, 453 U. S., at 660 (quoting
Youngstown
Sheet &
Tube Co. v.
Sawyer, 343 U. S. 579, 594 (1952)
(Frankfurter, J., concurring)). And judges should not be the
expositors of the Nation's foreign policy, which is the role they
play by acting when the President himself has not taken a clear
443
stand. As I see it, courts step out of their proper role when
they rely on no legislative or even executive text, but only on
inference and implication, to preempt state laws on foreign affairs
grounds.
In sum, assuming,
arguendo, that an executive agreement
or similarly formal foreign policy statement targeting disclosure
could override the HVIRA, there is no such declaration here.
Accordingly, I would leave California's enactment in place, and
affirm the judgment of the Court of Appeals.
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