SAN FRANCISCO—A federal appeals court on Monday took up the thorny issue of whether California law declaring there was an Armenian genocide in Turkey conflicts with U.S. foreign policy. A full panel of 9th Circuit judges will reconsider a three-judge panel’s reversal late last year of its own 2009 ruling in the case.
That December 2010 decision found no federal policy forbidding California from recognizing the World War I-era killing of more than 1,500,000 Armenians as a genocide.
Vazken Movsesian and other Californians of Armenian descent sought damages for bad faith, breach of contract and constructive trust in 2003 from two German insurers owned by Munich Re AG. The suit claimed that California law gave victims until the end of 2010 to file insurance claims related to the mass extermination of Armenians in the Ottoman Empire between 1915 and 1923.
The District Court found that the foreign affairs doctrine did not pre-empt the state law, but the original appellate panel dismissed the claims as pre-empted by federal foreign policy. On rehearing, however, the panel found “no express federal policy forbidding states to use the term ‘Armenian genocide,’ and reversed.
It’s the third time in two years the 9th U.S. Circuit Court of Appeals has confronted the politically charged question.
On Monday, the court’s chief justice announced in a brief statement that a majority of judges had voted to rehear the case — a move that wipes out the 2010 decision.
The insurers argue California’s law should be struck down because it conflicts with U.S. foreign policy, which they say sides with Turkey in refusing to call the Armenian deaths genocide. Turkey describes the deaths as resulting from civil unrest that accompanied the collapse of the Ottoman Empire.
The insurers point to decisions by former presidents Bill Clinton and George W. Bush to defeat congressional legislation that would have recognized an Armenian genocide.
Lawyers for the heirs argue those presidential views are not official policy. They say the United States lacks a formal position, which means the California law is not in conflict with any national policy.
Lawyers representing the heirs have filed similar lawsuits against New York Life Insurance Co. and French insurer AXA, which were settled in 2005 for a combined $37.5 million.

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