U.S. High Court to Review Holocaust Victims' Victory
Case is one of two with Washington backing foreign governments against
those seeking reparations. Painting decision also challenged.

By Henry Weinstein, Times Staff Writer

The U.S. Supreme Court said Friday that it would review a July decision of a
federal appeals court in San Francisco upholding a California law designed
to aid Holocaust victims seeking compensation from insurers.
 

The July ruling, hailed as a major victory for elderly Holocaust survivors,
was opposed by the American Insurance Assn., which asked the Supreme Court
to review the case. The U.S. Justice Department and the German and Swiss
governments filed briefs in support of the insurers' petition.
 

In a related development Friday, the Justice Department said it would file a
brief on Monday supporting the Austrian government's challenge to another
Holocaust reparations decision of the U.S. 9th Circuit Court of Appeals. In
December, the 9th Circuit ruled that an elderly West Los Angeles woman was
entitled to go forward with a lawsuit against Austria in which she seeks to
recover six paintings worth $150 million seized by the Nazis in 1939.
The December decision was the first ruling by a federal appeals court in
Holocaust reparations litigation that a foreign government can be held
accountable in a U.S. court.

Although the cases do not involve identical legal issues, a leading scholar
on Holocaust reparations litigation said it was noteworthy that Justice
Department attorneys have weighed in twice against those seeking
reparations. "The U.S. is going against U.S. citizens in U.S. courts on
behalf of a foreign country or a foreign company," said Michael Bazyler, a
Whittier Law School professor.
 

The case that the Supreme Court agreed to take involves the Holocaust Victim
Insurance Relief Act of 1999. The law requires any insurer doing business in
California to disclose information about any policies sold in Europe from
1920 to 1945. In recent years, numerous European insurers, many with
California affiliates, have been accused of failing to honor valid policies
issued during the Holocaust era.
 

Most plaintiffs lack records to substantiate their claims because the
paperwork was confiscated or lost when the Nazis forced millions of people
into concentration camps.
 

Several major insurers contend that the law interferes with the federal
government's control of foreign affairs and violates the Constitution's due
process and equal protection clauses.
In support, Bush administration lawyers urged the Supreme Court to take the
case and strike down the California law. The state has "injected itself into
matters of foreign relations reserved to the president and Congress" the
government's lawyers said in a court brief. By adopting its own approach to
Holocaust relief, California's law "undermines the United States' effective
conduct of foreign relations, including its continuing efforts to secure
compensation for surviving Holocaust victims within their lifetimes," they
said.
 

Los Angeles attorney Frank Kaplan, who is special counsel to the California
Insurance Commission, said he was disappointed with Friday's development.
But he added that, if the Supreme Court rules in the state's favor,
"survivors will be given the ability to obtain information that has been
denied to them for 55 years."
 

The paintings case involves complicated legal questions raised by Austria's
contention that it was protected by a U.S. law that normally shields foreign
countries from lawsuits in U.S. courts.
 

In the December ruling, 9th Circuit Judge Kim M. Wardlaw said the illegal
seizure of six Gustav Klimt paintings from Maria Altmann's uncle fell within
the "expropriation exception" of the Foreign Sovereign Immunities Act -- the
law under which Austria claims protection from suit.
 

Just a week after the decision was issued, the Justice Department filed a
brief disagreeing with the 9th Circuit ruling in another Holocaust
reparations case pending in a New York federal appeals court. That brief
stated that at the time of the Holocaust, "foreign states were afforded
virtually absolute immunity from suit in American courts," and that
exceptions adopted later do not apply retroactively. Austria's lawyer Scott
Cooper made the same argument in the Altmann case, but it was rejected by
the 9th Circuit. He was not available for comment Friday.
 

Altmann's lawyer E. Randol Schoenberg said he was troubled that the U.S. is
now planning to enter the case against his 86-year-old client. "I can
understand the U.S. not lifting a finger help Mrs. Altmann for the past four
years, but I cannot understand how they could justify opposing her claims
for the return of these stolen paintings."
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Times staff writer David Savage contributed to this report.