[Congressional Record Volume 156, Number 166 (Wednesday, December 15, 2010)]
[Senate]
[Pages S10306-S10307]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SPECTER:
  S. 4033. A bill to provide for the restoration of legal rights for 
claimants under holocaust-era insurance policies; to the Committee on 
the Judiciary.
  Mr. SPECTER. Mr. President, I have sought recognition to urge my 
colleagues to support and take up next Congress the bill I just 
introduced, the Restoration of Legal Rights for Claimants Under 
Holocaust-Era Insurance Policies. The bill would restore the right of 
Holocaust survivors and their descendants--many of them United States 
citizens--to maintain lawsuits in our courts to recover unpaid proceeds 
under Holocaust-era life insurance policies. Recent decisions of the 
federal courts about which I have spoken at length in prior floor 
statements and confirmation hearings have denied survivors and their 
descendants that right.
  The insurance policies at issue were issued to millions of European 
Jews before World War II. During the Nazi era, European insurers 
largely escaped their obligations under the policies--sometimes by 
participating with the Nazis in what one Supreme Court Justice has 
characterized as ``larcenous takings of gigantic proportions.'' [Am. 
Ins. Ass'n v. Garamendi, 539 U.S. 396, 430 (2003) (Ginsburg, J., joined 
by Stevens, Scalia, and Thomas, JJ., dissenting).] In the aftermath of 
World War II, insurers dishonored the policies for one shameful reason 
or another. The most shameful of them was that a claimant could not 
produce a death certificate of a deceased insured who had been murdered 
in a Nazi death camp.
  In the 1990s survivors turned, as a last resort, to the courts of the 
United States. Numerous suits were filed seeking compensation from 
European insurers for dishonoring Holocaust-era insurance policies 
during and especially after the War. Several States, for their part, 
attempted to facilitate recovery under unpaid policies by requiring 
insurers doing business in their States, as most did, to disclose 
information about those policies.
  European insures responded to these developments by agreeing to 
establish a private claims resolution process. Their agreement resulted 
in the establishment of a voluntary organization in 1998--formed by, 
among others, the insurers, the State of Israel, and State insurance 
commissioners in the United States known as the International 
Commission on Holocaust Era Insurance Claims, ICHEIC. ``The job of 
ICHEIC,'' according to the Supreme Court, ``include[d] negotiation with 
European insurers to provide information about unpaid insurance 
policies and the settlement of claims under them.'' [Garamendi, 539 
U.S. at 407.]
  Many survivors and their descendants filed claims through ICHEIC. How 
fairly ICHEIC decided their claims remains a debated question. 
Testimony before Congress at least raises serious questions as to 
whether meritorious

[[Page S10307]]

claims were denied. I do not wish to enter that debate today except to 
emphasize that ICHEIC was not a neutral, governmental adjudicatory 
body. It was, as then-Judge Michael Mukasey said, a ``an ad-hoc non-
judicial, private international claims tribunal'' created, funded, and 
to a large extent controlled by the insurance companies--in short, 
again in Judge Mukasey's words, ``a company store.'' [In re 
Assicurazioni Generali, S.p.A Holocaust Ins. Litig., 228 F. Supp. 2d 
348, 356-57 (S.D.N.Y. 2002).] I also wish to emphasize that by filing a 
claim through ICHEIC, a claimant did not waive his right to file suit. 
Only claimants who received payments under insurance policies did so.
  Despite the creation of ICHEIC, litigation continued in American 
courts. Foreign protests over the litigation led the United States to 
negotiate several executive agreements with foreign governments. Of 
these, the most important was the 2000 German Foundation Agreement. It 
obligated Germany to establish the German Foundation, which was funded 
by Germany and German companies, to compensate Jews ``who suffered'' 
various economic harms ``at the hands of the German companies during 
the National Socialist era.'' As for insurance claims in particular, 
the agreement obligated German insurers to address them through ICHEIC. 
Similar agreements between the United States and Austria and France 
followed. No agreement was reached, though, with Nazi German's 
principal ally, Italy.
  In negotiating the 2000 agreement, Germany sought immunity from 
suit--``legal peace'' as Germany calls it--in American courts for 
German companies. The United States refused to provide it, and could 
not have provided it, in my view, in the absence of a Senate-ratified 
treaty or some other such authoritative Congressional action. Instead 
the United States agreed only to the inclusion of a provision 
obligating the United States to file in any suit against a German 
company over a Holocaust-era claim a precatory statement informing the 
court that ``it would be in the foreign policy interests of the United 
States for the Foundation to be the exclusive forum and remedy for the 
resolution of all asserted claims against Germany companies arising 
from their involvement in the National Socialist era and World War 
II.'' The United States also agreed in any such filing to ``recommend 
dismissal on any valid legal ground (which, under the U.S. system of 
jurisprudence, will be for the U.S. courts to determine).'' The 2000 
agreement makes explicit, however, that ``the United States does not 
suggest that its policy interests concerning the Foundation in 
themselves provide an independent legal basis for dismissal.''
  But what the 2000 executive agreement expressly denied Germany 
companies--that is, immunity from suit--our federal courts have now 
given them at the urging of the executive branch. I refer first and 
foremost to the Supreme Court's much-criticized, five-to-four decision 
in American Insurance Co. v. Garamendi, 2003. The Court held there that 
the executive branch's foreign policy favoring the resolution of 
Holocaust-era insurance claims through ICHEIC preempted a California 
law requiring the disclosure of information about Holocaust-era 
insurance policies to potential claimants. It did not matter, the Court 
said, that the executive agreement said nothing whatsoever about 
preemption, let alone that no federal statute or treaty actually 
preempted disclosure statute's like California's. It was enough that 
the agreement embodied a general policy--reaffirmed over the years by 
statements by sub-cabinet officials--with which California's disclosure 
state could be said to conflict. Four Justices with very different 
views on executive power--Ginsburg, Scalia, Stevens, and Thomas--
dissented. While conceding the, questionable, argument that the 
President can under some circumstances preempt state law by executive 
agreement, they emphasized the obvious flaw in the Court's position on 
the facts at hand: The 2000 agreement says nothing about preemption. 
Insofar as it says anything on the subject, it actually disclaims any 
preemptive effect.

  On the authority of Garamendi, the Federal district court before 
which lawsuits to recover on policies issued by the Italian insurer 
Generali had been consolidated dismissed those suits as preempted. The 
court rejected the plaintiffs' argument that the suits could not be 
preempted because Italy and the United States had never entered into an 
executive agreement addressing claims against Italian insurers. Appeals 
to the Court of Appeals for the Second Circuit followed. While the 
appeals were pending, a class action settlement was reached and 
approved by the court under which most of the class members received 
nothing. The plaintiffs' lead counsel has said that Garamendi left them 
no choice but to settle. Several plaintiffs who opted out of the 
settlement nonetheless pressed on with the appeals. Early this year the 
Second Circuit affirmed the dismissal of their cases. [In re 
Assicurazioni Generali, S.P.A., 529 F.3d 113 (2d Cir. 2010).]
  The plaintiffs then asked the Supreme Court to hear their case by 
filing a petition for certiorari. They raised two main questions. 
Whether Garamendi preempts the generally applicable state common law 
under which the plaintiffs sought recovery, as opposed to the 
disclosure-specific law California enacted. Whether Garamendi should be 
read to preempt state-law claims in the absence of any executive 
agreement addressing those claims. Recall that Italy and the United 
States never entered into an executive agreement with which claims 
against Generali, an Italian insurer, could be said to conflict. A 
post-Garamendi decision of the Court, Medellin v. Texas, 2008, suggests 
that Garamendi cannot be so broadly read--that an executive-branch 
foreign policy can preempt state law only if it becomes law through the 
means prescribed by the Constitution or, in some limited class of cases 
at least, find expression in an executive agreement entered with 
Congress's acquiescence. Despite the importance of these questions and 
an apparent split among the lower courts in answering them, the Supreme 
Court denied certiorari.
  My legislation would achieve two narrow, but important, objectives: 
First, it would restore Holocaust survivors and their descendants to 
the legal position they occupied before Garamendi and Generali. Second, 
it would allow states to enforce the sort of disclosure laws at issue 
in Garamendi. With limited exceptions tailored to achieve these 
objectives, the legislation would otherwise leave undisturbed any 
defenses that insurers may have to Holocaust-era insurance claims, 
including the defense that they were settled and released through 
ICHEIC.
  Of equal significance, my legislation would vindicate two important 
Constitutional principles--one involving separation of powers, the 
other federalism. The principle of separation of powers is that the 
Constitution vests all lawmaking authority in Congress and none in the 
executive branch. The principle of federalism is that, under the 
Constitution's supremacy clause, Article VI, only the Constitution, 
Congressionally enacted law, and Senate-ratified treaties can preempt 
state law. Some executive agreements, if entered at least with 
Congress's acquiescence, arguably may also do so. But executive-branch 
policies plainly do not.
  One final point: A similar House bill, H.R. 4596, has been objected 
to on the ground that it will disserve aging Holocaust survivors 
because it will create unrealistic expectations of recovery. Claims 
that were not successful before ICHEIC, the House bill's critics claim, 
are almost certain to fail in court. That is a debatable objection. It 
is, in any event, beside the point. Holocaust survivors and their 
descendants should be allowed to decide for themselves whether to file 
suit. Neither the executive branch nor the federal courts should make 
that decision for them.

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