Movesesian v. Victoria Versicherung AG

Section 354.4 of the California Code of Civil Procedure, which grants state courts jurisdiction over insurance claims by Armenian Genocide Victims, is preempted under the foreign affairs doctrine.

In 2000 the California Legislature enacted section 354.4 allowing it's state courts to have jurisdiction to hear insurance claims brought by Armenian Genocide Victims. This class is defined as those who lived under the Ottoman Empire during 1915 to 1923 but were affected by life insurance polices in place from as early as 1875. In 2003, Movsesian lead a class action against Victoria Versicherung AG, Ergo Versicherungsgruppe AG, and their parent company Munich Re in the Central District of California for breach of contract, covenant of good faith, and fair dealing arising from occurrences that took place in the late Ottoman Empire. Defendants sought a motion to dismiss asserting that the issues were preempted by federal law. The district court found that it was not preempted and that there was a breach of the covenant of good faith and fair dealing. The Ninth Circuit noted that section 354.4 goes to a distinct foreign matter and it that may be field preempted by federal law because it does not serve any traditional state purpose. The Court also noted that the statute also intrudes too closely upon federal foreign policy making. The Ninth Circuit held that federal preemption does apply. REVERSED and REMANDED.