Will the Supreme Court Revisit Dormant Foreign Affairs Preemption in California’s Armenian Genocide Law?

Armenian-American groups are up in arms over the U.S. government’s decision to file an amicus brief against a California law allowing claims against insurance companies by “Armenian genocide victims.”  But they shouldn’t be. The law really involves an ongoing constitutional powers debate between the states and the federal government over foreign affairs, and the U.S. government is siding (not surprisingly) with its own powers.  What is more interesting about this case, in the wake of Kiobel, is how human rights groups will increasingly support state autonomy in foreign affairs (to allow human rights lawsuits) and how business and conservative groups will likely oppose it.

The California law had been struck down by a unanimous Ninth Circuit en banc panel on the grounds that it was preempted by federal government policies and constitutional powers over foreign affairs. The law extended a statute of limitations on insurance claims against insurance companies that do business in California for residents or non-residents who are found to be “Armenian genocide victims.”  Both the district court and the initial appellate court panel had found at least some parts of the law could survive a federal preemption challenge (as Roger described here), so the unanimous en banc panel decision was quite surprising.

The Solicitor General’s brief focuses mostly on the “field preemption” theory developed most recently in the U.S. Supreme Court’s decision in American Ins Association v. Garamendi. Field preemption describes a conflict between a state’s actions and the federal government’s “field”, such as foreign affairs.  Conflict preemption focuses on the idea that the federal government has made an express legal determination with which the state law conflicts (e.g. through a statute or treaty, or maybe an “executive foreign policy”). Where the federal government’s policy on the Armenian genocide is a fairly complex muddle, I don’t think there is much of a case for conflict preemption.

Field preemption analysis begins with whether the state law is regulating a traditional state interest or area.  Here, California claimed to be doing so because it was only regulating insurance, unquestionably a traditional state area.  But the Ninth Circuit rejected this claim noting that the law plainly is aimed at allowing Armenians from a particular foreign event (the Armenian genocide) to sue.

I am very skeptical of field preemption in this way, and I am not a fan of the way the Ninth Circuit questioned the motives of the California legislature. It is not their motives that matter, but whether it is a traditional state power.  And since this would give a cause of action in California courts against insurance companies already subject to California jurisdiction, I don’t think this is a very clear case of field preemption.  Nor should the fact that there is a foreign relations impact, by itself, turn this into a field preemption case.

If the Court denies certiorari, this will call into question other kinds of post-Kiobel lawsuits that might be brought under state law.  So I somehow think this issue is going to come back to the Court soon anyway.