U.S. High Court to Review Holocaust Victims’ Victory

The U.S. Supreme Court said Friday that it would review a July decision of a federal appeals court in San Francisco upholding a California law designed to aid Holocaust victims seeking compensation from insurers.

The July ruling, hailed as a major victory for elderly Holocaust survivors, was opposed by the American Insurance Assn., which asked the Supreme Court to review the case. The U.S. Justice Department and the German and Swiss governments filed briefs in support of the insurers’ petition.

In a related development Friday, the Justice Department said it would file a brief on Monday supporting the Austrian government’s challenge to another Holocaust reparations decision of the U.S. 9th Circuit Court of Appeals. In December, the 9th Circuit ruled that an elderly West Los Angeles woman was entitled to go forward with a lawsuit against Austria in which she seeks to recover six paintings worth $150 million seized by the Nazis in 1939.

The December decision was the first ruling by a federal appeals court in Holocaust reparations litigation that a foreign government can be held accountable in a U.S. court.

Although the cases do not involve identical legal issues, a leading scholar on Holocaust reparations litigation said it was noteworthy that Justice Department attorneys have weighed in twice against those seeking reparations. “The U.S. is going against U.S. citizens in U.S. courts on behalf of a foreign country or a foreign company,” said Michael Bazyler, a Whittier Law School professor.

The case that the Supreme Court agreed to take involves the Holocaust Victim Insurance Relief Act of 1999. The law requires any insurer doing business in California to disclose information about any policies sold in Europe from 1920 to 1945. In recent years, numerous European insurers, many with California affiliates, have been accused of failing to honor valid policies issued during the Holocaust era.

Most plaintiffs lack records to substantiate their claims because the paperwork was confiscated or lost when the Nazis forced millions of people into concentration camps.

Several major insurers contend that the law interferes with the federal government’s control of foreign affairs and violates the Constitution’s due process and equal protection clauses.

In support, Bush administration lawyers urged the Supreme Court to take the case and strike down the California law. The state has “injected itself into matters of foreign relations reserved to the president and Congress” the government’s lawyers said in a court brief. By adopting its own approach to Holocaust relief, California’s law “undermines the United States’ effective conduct of foreign relations, including its continuing efforts to secure compensation for surviving Holocaust victims within their lifetimes,” they said.

Los Angeles attorney Frank Kaplan, who is special counsel to the California Insurance Commission, said he was disappointed with Friday’s development. But he added that, if the Supreme Court rules in the state’s favor, “survivors will be given the ability to obtain information that has been denied to them for 55 years.”

The paintings case involves complicated legal questions raised by Austria’s contention that it was protected by a U.S. law that normally shields foreign countries from lawsuits in U.S. courts.

In the December ruling, 9th Circuit Judge Kim M. Wardlaw said the illegal seizure of six Gustav Klimt paintings from Maria Altmann’s uncle fell within the “expropriation exception” of the Foreign Sovereign Immunities Act -- the law under which Austria claims protection from suit.

Just a week after the decision was issued, the Justice Department filed a brief disagreeing with the 9th Circuit ruling in another Holocaust reparations case pending in a New York federal appeals court. That brief stated that at the time of the Holocaust, “foreign states were afforded virtually absolute immunity from suit in American courts,” and that exceptions adopted later do not apply retroactively. Austria’s lawyer Scott Cooper made the same argument in the Altmann case, but it was rejected by the 9th Circuit. He was not available for comment Friday.

Altmann’s lawyer E. Randol Schoenberg said he was troubled that the U.S. is now planning to enter the case against his 86-year-old client. “I can understand the U.S. not lifting a finger help Mrs. Altmann for the past four years, but I cannot understand how they could justify opposing her claims for the return of these stolen paintings.”

*

Times staff writer David Savage contributed to this report.