American Insurance Association v Garamendi

SUPREME COURT OF THE UNITED STATES
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 Governent o! Geran" #on!i$#ate% the val&e or 'ro#ee%$
o! an" (e)i$h li!e in$&ran#e 'oli#ie$ i$$&e% *e!ore an% %&rin+ the
Se#on% ,orl% ,ar. A!ter the )ar, even a 'oli#" that ha% e$#a'e%
#on!i$#ation )a$ li-el" to *e %i$honore%, )hether *e#a&$e in$&rer$
%enie% it$ e.i$ten#e or #laie% it ha% la'$e% !ro &n'ai%
'rei&$, or *e#a&$e the Geran Governent )o&l% not 'rovi%e
heir$ )ith %o#&entation o! the 'oli#"hol%er/$ %eath. Re$'on$i*ilit"
a$ *et)een the +overnent an% in$&ran#e #o'anie$ i$ %i$'&te%,
*&t the !a#t i$ that the 'ro#ee%$ o! an" in$&ran#e 'oli#ie$ i$$&e%
to (e)$ *e!ore an% %&rin+ the )ar )ere 'ai% to the Thir% Rei#h or
never 'ai% at all. The$e #on!i$#ation$ an% !r&$tration$ o! #lai$ !ell
)ithin the $&*0e#t o! re'aration$, )hi#h *e#ae a 'rin#i'al o*0e#t
o! Allie% %i'loa#" a!ter the )ar. Ultiatel", the )e$tern allie$
'la#e% the o*li+ation to 'rovi%e re$tit&tion to vi#ti$ o! Nazi
'er$e#&tion on the ne) ,e$t Geran Governent, )hi#h ena#te%
re$tit&tion la)$ an% $i+ne% a+reeent$ )ith other #o&ntrie$ !or the
#o'en$ation o! their national$. De$'ite a 'a"o&t o! ore than 122
*illion %e&t$#h ar-$ a$ o! 3222, ho)ever, the$e ea$&re$ le!t o&t
an" #laiant$ an% #ertain t"'e$ o! #lai$. A!ter Geran
re&ni!i#ation, #la$$ a#tion$ !or re$tit&tion 'o&re% into Unite% State$
#o&rt$ a+ain$t #o'anie$ %oin+ *&$ine$$ in Geran" %&rin+ the Nazi
era. Prote$t$ *" %e!en%ant #o'anie$ an% their +overnent$
'ro'te% the Unite% State$ Governent to ta-e a#tion to tr" to
re$olve the atter. Ne+otiation$ at the national level 'ro%&#e% the
Geran Fo&n%ation A+reeent, in )hi#h Geran" a+ree% to
e$ta*li$h a !o&n%ation !&n%e% )ith 12 *illion %e&t$#h ar-$
#ontri*&te% e4&all" *" the Geran Governent an% Geran
#o'anie$ to #o'en$ate the #o'anie$/ vi#ti$ %&rin+ the Nazi
era. The Pre$i%ent a+ree% that )henever a Geran #o'an" )a$
$&e% on a Holo#a&$t5era #lai in an Aeri#an #o&rt, the
Governent )o&l% 617 $&*it a $tateent that it )o&l% *e in thi$
#o&ntr"/$ !orei+n 'oli#" intere$t$ !or the !o&n%ation to *e the
e.#l&$ive !or& an% ree%" !or $&#h #lai$, an% 637 tr" to +et $tate
an% lo#al +overnent$ to re$'e#t the !o&n%ation a$ the e.#l&$ive
e#hani$. A$ !or in$&ran#e #lai$ in 'arti#&lar, *oth #o&ntrie$
a+ree% that the Geran Fo&n%ation )o&l% )or- )ith the
International Coi$$ion on Holo#a&$t Era In$&ran#e Clai$
6ICHEIC7, a vol&ntar" or+anization )ho$e i$$ion i$ to ne+otiate
)ith E&ro'ean in$&rer$ to 'rovi%e in!oration a*o&t an% $ettleent
o! &n'ai% in$&ran#e 'oli#ie$, an% )hi#h ha$ $et &' 'ro#e%&re$ to
that en%. The Geran a+reeent ha$ $erve% a$ a o%el !or $iilar
a+reeent$ )ith A&$tria an% Fran#e.
Mean)hile, Cali!ornia *e+an it$ o)n en4&ir" into the i$$&e,
'ro'tin+ $tate le+i$lation %e$i+ne% to !or#e 'a"ent *" %e!a&ltin+
in$&rer$. Aon+ other la)$, Cali!ornia/$ Holo#a&$t 8i#ti In$&ran#e
Relie! A#t o! 1999 6H8IRA7 re4&ire$ an" in$&rer %oin+ *&$ine$$ in the
State to %i$#lo$e in!oration a*o&t all 'oli#ie$ $ol% in E&ro'e
*et)een 1932 an% 19:; *" the #o'an" or an" one <relate%= to it
&'on 'enalt" o! lo$$ o! it$ $tate *&$ine$$ li#en$e. A!ter H8IRA )a$
ena#te%, the State i$$&e% a%ini$trative $&*'oena$ a+ain$t $everal
$&*$i%iarie$ o! E&ro'ean in$&ran#e #o'anie$ 'arti#i'atin+ in the
ICHEIC. Ie%iatel", the Fe%eral Governent in!ore% Cali!ornia
o!!i#ial$ that H8IRA )o&l% %aa+e the ICHEIC, the onl" e!!e#tive
ean$ to 'ro#e$$ 4&i#-l" an% #o'letel" &n'ai% Holo#a&$t era
in$&ran#e #lai$, an% that H8IRA )o&l% 'o$$i*l" %erail the Geran
Fo&n%ation A+reeent. Neverthele$$, the $tate in$&ran#e
#oi$$ioner anno&n#e% that he )o&l% en!or#e H8IRA to it$ !&lle$t.
Petitioner in$&ran#e entitie$ then !ile% thi$ $&it #hallen+in+ H8IRA/$
#on$tit&tionalit". The Di$tri#t Co&rt i$$&e% a 'reliinar" in0&n#tion
a+ain$t en!or#in+ H8IRA an% later +rante% 'etitioner$ $&ar"
0&%+ent. The Ninth Cir#&it rever$e%, hol%in+, inter alia, that
H8IRA %i% not violate the !e%eral !orei+n a!!air$ 'o)er.
Held: Cali!ornia/$ H8IRA inter!ere$ )ith the Pre$i%ent/$ #on%&#t o!
the Nation/$ !orei+n 'oli#" an% i$ there!ore 'ree'te%. P'. 1:>?1.
6a7 There i$ no 4&e$tion that at $oe 'oint an e.er#i$e o! $tate
'o)er that to&#he$ on !orei+n relation$ &$t "iel% to the National
Governent/$ 'oli#" or that +enerall" there i$ e.e#&tive a&thorit"
to %e#i%e )hat that 'oli#" $ho&l% *e. In !orei+n 'oli#"a-in+, the
Pre$i%ent, not Con+re$$, ha$ the <lea% role.= First Nat. City Bank v.
Banco Nacional de Cuba, :2@ U.S. A;9, A@A. S'e#i!i#all", the
Pre$i%ent ha$ a&thorit" to a-e <e.e#&tive a+reeent$= )ith other
#o&ntrie$, re4&irin+ no rati!i#ation *" the Senate or a''roval *"
Con+re$$. See, e.g., Dames & Moore v. Regan, :;? U.S. @;:, @A9,
@B3>@B?. Ma-in+ $&#h a+reeent$ to $ettle #lai$ o! Aeri#an
national$ a+ain$t !orei+n +overnent$ i$ a 'arti#&larl" lon+$tan%in+
'ra#ti#e. Altho&+h the e.e#&tive a+reeent$ )ith Geran", A&$tria,
an% Fran#e at i$$&e %i!!er !ro 'a$t a+reeent$ in that the" a%%re$$
#lai$ a$$o#iate% )ith !orerl" *elli+erent $tate$, *&t a+ain$t
#or'oration$, not the !orei+n +overnent$, the %i$tin#tion %oe$ not
atter. In$i$tin+ on a $har' line *et)een '&*li# an% 'rivate a#t$ in
%e!inin+ the le+itiate $#o'e o! the E.e#&tive/$ international
ne+otiation$ )o&l% ha$trin+ the Pre$i%ent in $ettlin+ international
#ontrover$ie$. Generall", then, vali% e.e#&tive a+reeent$ are !it to
'ree't $tate la), an% i! the a+reeent$ here ha% e.'re$$l"
'ree'te% la)$ li-e H8IRA, the i$$&e )o&l% *e $trai+ht!or)ar%. C&t
$in#e the$e a+reeent$ in#l&%e no 'ree'tion #la&$e, 'etitioner$/
'ree'tion #lai re$t$ on the a$$erte% inter!eren#e )ith
Pre$i%ential !orei+n 'oli#" that the a+reeent$ e*o%". The
'rin#i'al $&''ort !or thi$ #lai o! 'ree'tion i$ sc!ernig v. Miller,
?B9 U.S. :39. In invali%atin+ an Ore+on $tat&te, the sc!ernig
a0orit" relie% on $tateent$ in 'revio&$ #a$e$ that are o'en to the
rea%in+ that $tate a#tion )ith ore than in#i%ental e!!e#t on
!orei+n a!!air$ i$ 'ree'te%, even a*$ent an" a!!irative !e%eral
a#tivit" in the $&*0e#t area o! the $tate la), an% hen#e )itho&t an"
$ho)in+ o! #on!li#t. See, e.g., id., at :?3. (&$ti#e Harlan,
#on#&rrin+ in the re$&lt, %i$a+ree% on thi$ 'oint, ar+&in+ that it$
i'li#ation o! 'ree'tion o! the entire !orei+n a!!air$ !iel% )a$ at
o%%$ )ith other #a$e$ $&++e$tin+ that, a*$ent 'o$itive !e%eral
a#tion, State$ a" le+i$late in area$ o! their tra%itional #o'eten#e
even tho&+h their $tat&te$ a" have an in#i%ental e!!e#t on !orei+n
relation$. "d., at :;9. ,hether re$'e#t !or the e.e#&tive !orei+n
relation$ 'o)er re4&ire$ a #ate+ori#al #hoi#e *et)een the
#ontra$tin+ theorie$ o! !iel% an% #on!li#t 'ree'tion evi%ent in
sc!ernig re4&ire$ no an$)er here, !or even on (&$ti#e Harlan/$
vie), $hare% *" the a0orit", the li-elihoo% that $tate le+i$lation
)ill 'ro%&#e $oethin+ ore than in#i%ental e!!e#t in #on!li#t )ith
the National Governent/$ e.'re$$ !orei+n 'oli#" )o&l% re4&ire
'ree'tion o! the $tate la). See al$o #nited $tates v. %ink, ?1; U.S.
32?, 3?2>3?1. An% $in#e on hi$ vie) it i$ le+i$lation )ithin <area$ o!
D tra%itional #o'eten#e= that +ive$ a State an" #lai to 'revail,
?B9 U.S., at :;9, it i$ rea$ona*le to #on$i%er the $tren+th o! the
$tate intere$t, 0&%+e% *" $tan%ar%$ o! tra%itional 'ra#ti#e, )hen
%e#i%in+ ho) $erio&$ a #on!li#t &$t *e $ho)n *e!ore %e#larin+ the
$tate la) 'ree'te%. P'. 1:>31.
6*7 There i$ a $&!!i#ientl" #lear #on!li#t *et)een H8IRA an% the
Pre$i%ent/$ !orei+n 'oli#", a$ e.'re$$e% *oth in the e.e#&tive
a+reeent$ )ith Geran", A&$tria, an% Fran#e, an% in $tateent$
*" hi+h5level E.e#&tive Cran#h o!!i#ial$, to re4&ire 'ree'tion here
even )itho&t an" #on$i%eration o! the State/$ intere$t. The a##o&nt
o! ne+otiation$ to)ar% tho$e a+reeent$ $ho)$ that the #on$i$tent
Pre$i%ential !orei+n 'oli#" ha$ *een to en#o&ra+e E&ro'ean
+overnent$ an% #o'anie$ to vol&nteer $ettleent !&n%$ an%
%i$#lo$&re o! 'oli#" in!oration, in 're!eren#e to liti+ation or
#oer#ive $an#tion$. Cali!ornia ha$ ta-en a %i!!erent ta#-E H8IRA/$
e#onoi# #o'&l$ion to a-e '&*li# %i$#lo$&re, o! !ar ore
in!oration a*o&t !ar ore 'oli#ie$ than ICHEIC r&le$ re4&ire,
e'lo"$ <a %i!!erent, $tate $"$te o! e#onoi# 're$$&re,= an% in
%oin+ $o &n%er#&t$ the Pre$i%ent/$ %i'loati# %i$#retion an% the
#hoi#e he ha$ a%e e.er#i$in+ it. Crosby v. National Foreign &rade
Council, ;?2 U.S. ?@?, ?A@. ,herea$ the Pre$i%ent/$ a&thorit" to
'rovi%e !or $ettlin+ #lai$ in )in%in+ &' international ho$tilitie$
re4&ire$ !le.i*ilit" in )iel%in+ <the #oer#ive 'o)er o! the national
e#ono"= a$ a tool o! %i'loa#", id., at ?AA, H8IRA %enie$ thi$, *"
a-in+ e.#l&$ion !ro a lar+e $e#tor o! the Aeri#an in$&ran#e
ar-et the a&toati# $an#tion !or non#o'lian#e )ith the State/$
o)n %i$#lo$&re 'oli#ie$. H8IRA th&$ #o'roi$e$ the Pre$i%ent/$
ver" #a'a#it" to $'ea- !or the Nation )ith one voi#e in %ealin+ )ith
other +overnent$ to re$olve #lai$ ari$in+ o&t o! ,orl% ,ar II.
Altho&+h the H8IRA %i$#lo$&re re4&ireent/$ +oal o! o*tainin+
#o'en$ation !or Holo#a&$t vi#ti$ i$ al$o e$'o&$e% *" the National
Governent, the !a#t o! a #oon en% har%l" ne&tralize$
#on!li#tin+ ean$. The e.'re$$ !e%eral 'oli#" an% the #lear #on!li#t
rai$e% *" the $tate $tat&te are alone eno&+h to re4&ire $tate la) to
"iel%. P'. 31>3@.
6#7 I! an" %o&*t a*o&t the #larit" o! the #on!li#t reaine%, it
)o&l% have to *e re$olve% in the National Governent/$ !avor, +iven
the )ea-ne$$ o! the State/$ intere$t, )hen eval&ate% in ter$ o!
tra%itional $tate le+i$lative $&*0e#t atter, in re+&latin+ %i$#lo$&re
o! E&ro'ean Holo#a&$t5era in$&ran#e 'oli#ie$ in the anner o!
H8IRA. Even i! Cali!ornia/$ &n%erl"in+ #on#ern !or it$ $everal
tho&$an% Holo#a&$t $&rvivor$ i$ re#o+nize% a$ a 'o)er!&l one, the
$ae o*0e#tive %i+ni!ie$ the National Governent/$ intere$t in
%evi$in+ it$ #ho$en e#hani$ !or vol&ntar" $ettleent$, there
*ein+ a''ro.iatel" 122,222 $&rvivor$ in the #o&ntr", onl" a $all
!ra#tion o! the in Cali!ornia. A$ a+ain$t the !e%eral re$'on$i*ilit",
the h&anit" &n%erl"in+ the $tate $tat&te #o&l% not +ive the State
the *ene!it o! an" %o&*t in re$olvin+ the #on!li#t )ith national
'oli#". P'. 3A>3B.
6%7 Cali!ornia $ee-$ to &$e an iron !i$t )here the Pre$i%ent ha$
#on$i$tentl" #ho$en -i% +love$. The e!!i#a#" o! the one a''roa#h
ver$&$ the other i$ *e$i%e the 'oint, $in#e 'ree'tion t&rn$ not on
the )i$%o o! the National Governent/$ 'oli#" *&t on the
evi%en#e o! #on!li#t. Here, the evi%en#e i$ ore than $&!!i#ient to
%eon$trate that H8IRA $tan%$ in the )a" o! the Pre$i%ent/$
%i'loati# o*0e#tive$. P. 3B.
6e7 The Co&rt re0e#t$ the State/$ $&*i$$ion that even i! H8IRA
%oe$ inter!ere )ith E.e#&tive Cran#h !orei+n 'oli#", Con+re$$
a&thorize% $tate la) o! thi$ $ort in the M#Carran5Fer+&$on A#t an%
the U.S. Holo#a&$t A$$et$ Coi$$ion A#t o! 199B. To *e+in )ith,
the e!!e#t o! an" #on+re$$ional a&thorization on the 'ree'tion
en4&ir" i$ !ar !ro #lear, *&t in an" event neither $tat&te %oe$ the
0o* the State a$#ri*e$ to it. M#Carran5Fer+&$on/$ '&r'o$e )a$ to
liit #on+re$$ional 'ree'tion o! $tate in$&ran#e la)$ &n%er the
#oer#e 'o)er, )hether %orant or e.er#i$e%, $ee, e.g.,
De'artment o( &reasury v. Fabe, ;2B U.S. :91, :99>;22, an% it
#annot 'la&$i*l" *e rea% to a%%re$$ 'ree'tion *" e.e#&tive
#on%&#t in !orei+n a!!air$. Nor i$ H8IRA a&thorize% *" the Holo#a&$t
Coi$$ion A#t, )hi#h $et &' a Pre$i%ential Coi$$ion to $t&%"
Holo#a&$t5era a$$et$ that #ae into the Governent/$ #ontrol, F?6a7
617, an% %ire#te% the Coi$$ion to en#o&ra+e $tate in$&ran#e
#oi$$ioner$ to 're'are a re'ort on the Holo#a&$t5relate% #lai$
'ra#ti#e$ o! all in$&ran#e #o'anie$ %oin+ *&$ine$$ in thi$ #o&ntr"
a!ter (an&ar" ?2, 19??, F?6a76:76A7. The Coi$$ion/$ !o#&$ )a$
liite% to a$$et$ hel% *" the Governent, an% the A#t/$ re!eren#e
to the $tate in$&ran#e #oi$$ioner$/ re'ort )a$ e.'re$$l" liite%
<to the %e+ree the in!oration i$ availa*le,= F?6a76:76C7, )hi#h #an
har%l" *e rea% to #on%one $tate $an#tion$ inter!erin+ )ith !e%eral
e!!ort$ to re$olve #lai$. Finall", Con+re$$ ha$ %one nothin+ to
e.'re$$ %i$a''roval o! the Pre$i%ent/$ 'oli#". Given the Pre$i%ent/$
#on$i%era*le in%e'en%ent a&thorit" in thi$ area, Con+re$$/$ $ilen#e
#annot *e e4&ate% )ith %i$a''roval. P'. 39>?1.
296 F.3d 832, reversed.
$outer, )., delivered t!e o'inion o( t!e Court, in *!ic! Re!n+uist, C. ).,
and ,-Connor, .ennedy, and Breyer, ))., /oined. 0insburg, )., (iled a
dissenting o'inion, in *!ic! $tevens, $calia, and &!omas, ))., /oined.