The Supreme Court struck down a state law intended to help Holocaust survivors collect on insurance policies from the Nazi era, ruling yesterday that the law was unconstitutional meddling by states in foreign affairs.
The court decided 5-4 to side with the Bush administration, which had urged the court to strike down the law. The administration said the law hurts the government’s efforts to speak “with one voice” in international affairs.
The case arose because of what California called a deliberate attempt to stonewall elderly Holocaust survivors or heirs who inquired about dormant policies. The state wanted any insurer doing business there to turn over records of Holocaust-era insurance policies or risk losing their license to do business in the state.
Justice David H. Souter wrote for the majority. Chief Justice William H. Rehnquist, and Justices Sandra Day O’Connor, Anthony M. Kennedy and Stephen G. Breyer joined him.
Justice Ruth Bader Ginsburg, who is one of two Jewish justices on the court, read a tart dissent from the bench. Mr. Breyer is also Jewish
“The judiciary has no warrant to serve as an expositor of the nation’s foreign policy” by trumping a state law, Justice Ginsburg said.
Attorneys for California argued that the law does not interfere with foreign policy. Besides helping Holocaust victims, the law gives consumers information they can use to evaluate insurance companies, they said.
The 1999 law required companies that sold insurance policies in Europe from 1920 to 1945, and that are now affiliated with California insurance companies, to search their records for details of the old policies. The information would go into a public registry. Companies that refused to divulge information could lose their state licenses.
An insurance-company trade association and insurers contend that California is unconstitutionally trying to regulate insurance business outside its borders. Insurance companies complained that if the California law stands, 50 states could set 50 different requirements.
Insurers have maintained that some of the required information has been lost and that European laws prohibit client information from being given to a third party without the client’s consent.
The Bush administration said Holocaust-era claims against foreign insurance companies should be processed through an international commission established in 1998 to settle insurance claims. An agreement signed in the fall sets aside $275 million to settle claims and humanitarian programs that benefit Holocaust survivors.
Some heirs have said policies went unpaid after World War II because insurers asked for documentation such as policies or death certificates — something impossible to produce for most survivors or heirs of concentration camps, or others who fled persecution. Only insurance companies would have that information now, the law’s backers said.
State insurance regulators and Jewish groups urged the court to uphold the law.
“Callous insurance companies that profited from the Holocaust need secrecy not only to keep the properties they stole from corpses, but to continue to do business today with Californians who would be rightly concerned, for both economic and moral reasons, if they learned the truth,” Bet Tzedek Legal Services and the Simon Wiesenthal Center argued in a friend-of-the-court brief.