American Insurance Association v. Garamendi

539 U.S. 396

Case Year: 2003

Case Ruling: 5-4, Reversed

Opinion Justice: Souter

FACTS

In this case the Court considered a California law--the Holocaust Victim Insurance Relief Act of 1999 (HVIRA)--that required any insurer doing business in the state to disclose information about all policies sold in Europe between 1920 and 1945 by the company itself or anyone “related” to it. The aim of the law was to ensure that Holocaust victims or their heirs could take direct action on their own behalf to receive payment on their insurance policies. The American Insurance Association, joined by the United States as an amicus curiae, challenged the law on the ground that it interferes with the federal government’s conduct of foreign relations and thus should be preempted.

 

JUSTICE SOUTER DELIVERED THE OPINION OF THE COURT.

California’s Holocaust Victim Insurance Relief Act of 1999 (HVIRA or Act), requires any insurer doing business in that State to disclose information about all policies sold in Europe between 1920 and 1945 by the company itself or any one “related” to it. The issue here is whether HVIRA interferes with the National Government’s conduct of foreign relations. We hold that it does, with the consequence that the state statute is preempted.

The Nazi Government of Germany engaged not only in genocide and enslavement but theft of Jewish assets, including the value of insurance policies, and in particular policies of life insurance, a form of savings held by many Jews in Europe before the Second World War. Early on in the Nazi era, loss of livelihood forced Jews to cash in life insurance policies prematurely, only to have the government seize the proceeds of the repurchase, and many who tried to emigrate from Germany were forced to liquidate insurance policies to pay the steep “flight taxes” and other levies imposed by the Third Reich to keep Jewish assets from leaving the country. Before long, the Reich began simply seizing the remaining policies outright. In 1941, the 11th Decree of the Reich Citizenship Law declared the confiscation of assets (including insurance policies) of Jews deported to the concentration camps, and two years later the 13th Decree did the same with respect to property of the dead, each decree requiring banks and insurance companies to identify Jewish accounts and transmit the funds to the Reich treasury. After the war, even a policy that had escaped confiscation was likely to be dishonored, whether because insurers denied its existence or claimed it had lapsed from unpaid premiums during the persecution, or because the government would not provide heirs with documentation of the policyholder’s death. Responsibility as between the government and insurance companies is disputed, but at the end of the day, the fact is that the value or proceeds of many insurance policies issued to Jews before and during the war were paid to the Reich or never paid at all.

These confiscations and frustrations of claims fell within the subject of reparations, which became a principal object of Allied diplomacy soon after the war. At the Potsdam Conference, the United States, Britain, and the Soviet Union took reparations for wartime losses by seizing industrial assets from their respective occupation zones, putting into effect the plan originally envisioned at the Yalta Conference months before. A year later, the United States was among the parties to an agreement to share seized assets with other western allies as settlement, as to each signatory nation, of “all its claims and those of its nationals against the former German Government and its Agencies, of a governmental or private nature, arising out of the war.”

The effect of the Paris Agreement was curtailed, however, and attention to reparations intentionally deferred, when the western allies moved to end their occupation and reestablish a sovereign Germany as a buffer against Soviet expansion. They worried that continued reparations would cripple the new Federal Republic of Germany economically, and so decided in the London Debt Agreement to put off “[c]onsideration of claims arising out of the second World War by countries which were at war with or were occupied by Germany during that war, and by nationals of such countries, against the Reich and agencies of the Reich ... until the final settlement of the problem of reparation.”...

In the meantime, the western allies placed the obligation to provide restitution to victims of Nazi persecution on the new West German Government. This had previously been a responsibility of the western military governments, which had issued several decrees for the return of property confiscated by the Nazis. West Germany enacted its own restitution laws in 1953 and 1956. Despite a payout of more than 100 billion deutsch marks as of 2000, these measures left out many claimants and certain types of claims, and when the agreement reunifying East and West Germany was read by the German courts as lifting the London Debt Agreement’s moratorium on Holocaust claims by foreign nationals, class-action lawsuits for restitution poured into United States courts against companies doing business in Germany during the Nazi era.

These suits generated much protest by the defendant companies and their governments, to the point that the Government of the United States took action to try to resolve “the last great compensation related negotiation arising out of World War II.” Ensuing negotiations at the national level produced the German Foundation Agreement, signed by President Clinton and German Chancellor Schröeder in July 2000, in which Germany agreed to enact legislation establishing a foundation funded with 10 billion deutsch marks contributed equally by the German Government and German companies, to be used to compensate all those “who suffered at the hands of German companies during the National Socialist era.”

The willingness of the Germans to create a voluntary compensation fund was conditioned on some expectation of security from lawsuits in United States courts, and after extended dickering President Clinton put his weight behind two specific measures toward that end. First, the Government agreed that whenever a German company was sued on a Holocaust-era claim in an American court, the Government of the United States would submit a statement 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 German companies arising from their involvement in the National Socialist era and World War II.” Though unwilling to guarantee that its foreign policy interests would “in themselves provide an independent legal basis for dismissal,” that being an issue for the courts, the Government agreed to tell courts “that U.S. policy interests favor dismissal on any valid legal ground.” On top of that undertaking, the Government promised to use its “best efforts, in a manner it considers appropriate,” to get state and local governments to respect the foundation as the exclusive mechanism.

As for insurance claims specifically, both countries agreed that the German Foundation would work with the International Commission on Holocaust Era Insurance Claims (ICHEIC), a voluntary organization formed in 1998 by several European insurance companies, the State of Israel, Jewish and Holocaust survivor associations, and the National Association of Insurance Commissioners, the organization of American state insurance commissioners. The job of the ICHEIC, chaired by former Secretary of State Eagleburger, includes negotiation with European insurers to provide information about unpaid insurance policies issued to Holocaust victims and settlement of claims brought under them. It has thus set up procedures for handling demands against participating insurers, including “a reasonable review ... of the participating companies’ files” for production of unpaid policies, “an investigatory process to determine the current status” of insurance policies for which claims are filed, and a “claims and valuation process to settle and pay individual claims,” employing “relaxed standards of proof.”

In the pact with the United States, Germany stipulated that “insurance claims that come within the scope of the current claims handling procedures adopted by the ICHEIC and are made against German insurance companies shall be processed by the companies and the German Insurance Association on the basis of such procedures and on the basis of additional claims handling procedures that may be agreed among the Foundation, ICHEIC, and the German Insurance Association.” And in a supplemental agreement formalized in October 2002, the German Foundation agreed to set aside 200 million deutsch marks, to be used for insurance claims approved by the ICHEIC and a portion of the ICHEIC’s operating expenses, with another 100 million in reserve if the initial fund should run out. The foundation also bound itself to contribute 350 million deutsch marks to a “humanitarian fund” administered by the ICHEIC, and it agreed to work with the German Insurance Association and the German insurers who had joined the ICHEIC, “with a view to publishing as comprehensive a list as possible of holders of insurance policies issued by German companies who may have been Holocaust victims.” Those efforts, which control release of information in ways that respect German privacy laws limiting publication of business records, have resulted in the recent release of the names of over 360,000 Holocaust victims owning life insurance policies issued by German insurers.

The German Foundation pact has served as a model for similar agreements with Austria and France, and the United States Government continues to pursue comparable agreements with other countries.

While these international efforts were underway, California’s Department of Insurance began its own enquiry into the issue of unpaid claims under Nazi-era insurance policies, prompting state legislation designed to force payment by defaulting insurers. In 1998, the state legislature made it an unfair business practice for any insurer operating in the State to “fai[l] to pay any valid claim from Holocaust survivors.”...

State legislative efforts culminated the next year with passage of Assembly Bill No. 600, 1999 Cal. Stats. ch. 827, the first section of which [the HVIRA], at issue here, requires “[a]ny insurer currently doing business in the state” to disclose the details of “life, property, liability, health, annuities, dowry, educational, or casualty insurance policies” issued “to persons in Europe, which were in effect between 1920 and 1945.”...

... While the legislature acknowledged that “[t]he international Jewish community is in active negotiations with responsible insurance companies through the [ICHEIC] to resolve all outstanding insurance claims issues,” it still thought the Act “necessary to protect the claims and interests of California residents, as well as to encourage the development of a resolution to these issues through the international process or through direct action by the State of California, as necessary.”

After HVIRA was enacted, administrative subpoenas were issued against several subsidiaries of European insurance companies participating in the ICHEIC. Immediately, in November 1999, Deputy Secretary Eizenstat wrote to the insurance commissioner of California that although HVIRA “reflects a genuine commitment to justice for Holocaust victims and their families, it has the unfortunate effect of damaging the one effective means now at hand to process quickly and completely unpaid insurance claims from the Holocaust period, the [ICHEIC].” The Deputy Secretary said that “actions by California, pursuant to this law, have already threatened to damage the cooperative spirit which the [ICHEIC] requires to resolve the important issue for Holocaust survivors,” and he also noted that ICHEIC Chairman Eagleburger had expressed his opposition to “sanctions and other pressures brought by California on companies with whom he is obtaining real cooperation.”... These expressions of the National Government’s concern proved to be of no consequence, for the state commissioner announced at an investigatory hearing in December 1999 that he would enforce HVIRA to its fullest, requiring the affected insurers to make the disclosures, leave the State voluntarily, or lose their licenses.

After this ultimatum, the petitioners here, several American and European insurance companies and the American Insurance Association (a national trade association), filed suit for injunctive relief against respondent insurance commissioner of California, challenging the constitutionality of HVIRA....

The principal argument for preemption made by petitioners and the United States as amicus curiae is that HVIRA interferes with foreign policy of the Executive Branch, as expressed principally in the executive agreements with Germany, Austria, and France. The major premises of the argument, at least, are beyond dispute. There is, of course, no question that at some point an exercise of state power that touches on foreign relations must yield to the National Government’s policy, given the “concern for uniformity in this country’s dealings with foreign nations” that animated the Constitution’s allocation of the foreign relations power to the National Government in the first place.... See Crosby v. National Foreign Trade Council (2000) (“‘[T]he peace of the whole ought not to be left at the disposal of a part’” (quoting The Federalist No. 80 (A. Hamilton); The Federalist No. 44, p. 299 (J. Madison) (emphasizing “the advantage of uniformity in all points which relate to foreign powers”); The Federalist No. 42 (J. Madison) (“If we are to be one nation in any respect, it clearly ought to be in respect to other nations”)....

Nor is there any question generally that there is executive authority to decide what that policy should be. Although the source of the President’s power to act in foreign affairs does not enjoy any textual detail, the historical gloss on the “executive Power” vested in Article II of the Constitution has recognized the President’s “vast share of responsibility for the conduct of our foreign relations.” Youngstown Sheet & Tube Co. v. Sawyer (1952) (Frankfurter, J., concurring). While Congress holds express authority to regulate public and private dealings with other nations in its war and foreign commerce powers, in foreign affairs the President has a degree of independent authority to act.

At a more specific level, our cases have recognized that the President has authority to make “executive agreements” with other countries, requiring no ratification by the Senate or approval by Congress, this power having been exercised since the early years of the Republic. Given the fact that the practice goes back over 200 years to the first Presidential administration, and has received congressional acquiescence throughout its history, the conclusion “[t]hat the President’s control of foreign relations includes the settlement of claims is indisputable.”

The executive agreements at issue here do differ in one respect from those just mentioned insofar as they address claims associated with formerly belligerent states, but against corporations, not the foreign governments. But the distinction does not matter. Historically, wartime claims against even nominally private entities have become issues in international diplomacy, and three of the postwar settlements dealing with reparations implicating private parties were made by the Executive alone. Acceptance of this historical practice is supported by a good pragmatic reason for depending on executive agreements to settle claims against foreign corporations associated with wartime experience.... [U]ntangling government policy from private initiative during war time is often so hard that diplomatic action settling claims against private parties may well be just as essential in the aftermath of hostilities as diplomacy to settle claims against foreign governments. While a sharp line between public and private acts works for many purposes in the domestic law, insisting on the same line in defining the legitimate scope of the Executive’s international negotiations would hamstring the President in settling international controversies.

Generally, then, valid executive agreements are fit to preempt state law, just as treaties are, and if the agreements here had expressly preempted laws like HVIRA, the issue would be straightforward. But petitioners and the United States as amicus curiae both have to acknowledge that the agreements include no preemption clause, and so leave their claim of preemption to rest on asserted interference with the foreign policy those agreements embody. Reliance is placed on our decision inZschernig v. Miller (1968).

Zschernig dealt with an Oregon probate statute prohibiting inheritance by a nonresident alien, absent showings that the foreign heir would take the property “without confiscation” by his home country and that American citizens would enjoy reciprocal rights of inheritance there. Two decades earlier, Clark v. Allen (1947), had held that a similar California reciprocity law “did not on its face intrude on the federal domain,” but by the time Zschernig (an East German resident) brought his challenge, it was clear that the Oregon law in practice had invited “minute inquiries concerning the actual administration of foreign law,” and so was providing occasions for state judges to disparage certain foreign regimes, employing the language of the anti-Communism prevalent here at the height of the Cold War. Although the Solicitor General, speaking for the State Department, denied that the state statute “unduly interfere[d] with the United States’ conduct of foreign relations,” the Court was not deterred from exercising its own judgment to invalidate the law as an “intrusion by the State into the field of foreign affairs which the Constitution entrusts to the President and the Congress.”

The Zschernig majority relied on statements in a number of previous cases open to the reading that state action with more than incidental effect on foreign affairs is preempted, even absent any affirmative federal activity in the subject area of the state law, and hence without any showing of conflict. The Court cited the pronouncement in Hines v. Davidowitz (1941), that “[o]ur system of government is such that the interest of the cities, counties and states, no less than the interest of the people of the whole nation, imperatively requires that federal power in the field affecting foreign relations be left entirely free from local interference.” Likewise, Justice Stewart’s concurring opinion viewed the Oregon statute as intruding “into a domain of exclusively federal competence.”

Justice Harlan, joined substantially by Justice White, disagreed with the Zschernig majority on this point, arguing that its implication of preemption of the entire field of foreign affairs was at odds with some other cases suggesting that in the absence of positive federal action “the States may legislate in areas of their traditional competence even though their statutes may have an incidental effect on foreign relations.” Thus, for Justice Harlan it was crucial that the challenge to the Oregon statute presented no evidence of a “specific interest of the Federal Government which might be interfered with” by the law. He would, however, have found preemption in a case of “conflicting federal policy,” and on this point the majority and Justices Harlan and White basically agreed: state laws “must give way if they impair the effective exercise of the Nation’s foreign policy.” It is a fair question whether respect for the executive foreign relations power requires a categorical choice between the contrasting theories of field and conflict preemption evident in the Zschernig opinions, but the question requires no answer here. For even on Justice Harlan’s view, the likelihood that state legislation will produce something more than incidental effect in conflict with express foreign policy of the National Government would require preemption of the state law. And since on his view it is legislation within “areas of ... traditional competence” that gives a State any claim to prevail, it would be reasonable to consider the strength of the state interest, judged by standards of traditional practice, when deciding how serious a conflict must be shown before declaring the state law preempted. Judged by these standards, we think petitioners and the Government have demonstrated a sufficiently clear conflict to require finding preemption here.

To begin with, resolving Holocaust-era insurance claims that may be held by residents of this country is a matter well within the Executive’s responsibility for foreign affairs. Since claims remaining in the aftermath of hostilities may be “sources of friction” acting as an “impediment to resumption of friendly relations” between the countries involved, there is a “longstanding practice” of the national Executive to settle them in discharging its responsibility to maintain the Nation’s relationships with other countries, Dames & Moore. The issue of restitution for Nazi crimes has in fact been addressed in Executive Branch diplomacy and formalized in treaties and executive agreements over the last half century, and although resolution of private claims was postponed by the Cold War, securing private interests is an express object of diplomacy today, just as it was addressed in agreements soon after the Second World War. Vindicating victims injured by acts and omissions of enemy corporations in wartime is thus within the traditional subject matter of foreign policy in which national, not state, interests are overriding, and which the National Government has addressed.

The exercise of the federal executive authority means that state law must give way where, as here, there is evidence of clear conflict between the policies adopted by the two. The foregoing account of negotiations toward the three settlement agreements is enough to illustrate that the consistent Presidential foreign policy has been to encourage European governments and companies to volunteer settlement funds in preference to litigation or coercive sanctions. As for insurance claims in particular, the national position, expressed unmistakably in the executive agreements signed by the President with Germany and Austria, has been to encourage European insurers to work with the ICHEIC to develop acceptable claim procedures, including procedures governing disclosure of policy information. The approach taken serves to resolve the several competing matters of national concern apparent in the German Foundation Agreement: the national interest in maintaining amicable relationships with current European allies; survivors’ interests in a “fair and prompt” but nonadversarial resolution of their claims so as to “bring some measure of justice ... in their lifetimes”; and the companies’ interest in securing “legal peace” when they settle claims in this fashion. As a way for dealing with insurance claims, moreover, the voluntary scheme protects the companies’ ability to abide by their own countries’ domestic privacy laws limiting disclosure of policy information.

California has taken a different tack of providing regulatory sanctions to compel disclosure and payment, supplemented by a new cause of action for Holocaust survivors if the other sanctions should fail. The situation created by the California legislation calls to mind the impact of the Massachusetts Burma law on the effective exercise of the President’s power, as recounted in the statutory preemption case, Crosby v. National Foreign Trade Council (2000). HVIRA’s economic compulsion to make public disclosure, of far more information about far more policies than ICHEIC rules require, employs “a different, state system of economic pressure,” and in doing so undercuts the President’s diplomatic discretion and the choice he has made exercising it....

The express federal policy and the clear conflict raised by the state statute are alone enough to require state law to yield. If any doubt about the clarity of the conflict remained, however, it would have to be resolved in the National Government’s favor, given the weakness of the State’s interest, against the backdrop of traditional state legislative subject matter, in regulating disclosure of European Holocaust-era insurance policies in the manner of HVIRA.

The commissioner would justify HVIRA’s ambitious disclosure requirement as protecting “legitimate consumer protection interests” in knowing which insurers have failed to pay insurance claims. But, quite unlike a generally applicable “blue sky” law, HVIRA effectively singles out only policies issued by European companies, in Europe, to European residents, at least 55 years ago. Limiting the public disclosure requirement to these policies raises great doubt that the purpose of the California law is an evaluation of corporate reliability in contemporary insuring in the State....

The basic fact is that California seeks to use an iron fist where the President has consistently chosen kid gloves. We have heard powerful arguments that the iron fist would work better, and it may be that if the matter of compensation were considered in isolation from all other issues involving the European allies, the iron fist would be the preferable policy. But our thoughts on the efficacy of the one approach versus the other are beside the point, since our business is not to judge the wisdom of the National Government’s policy; dissatisfaction should be addressed to the President or, perhaps, Congress. The question relevant to preemption in this case is conflict, and the evidence here is “more than sufficient to demonstrate that the state Act stands in the way of [the President’s] diplomatic objectives.”

The State’s remaining submission is that even if HVIRA does interfere with Executive Branch foreign policy, Congress authorized state law of this sort in the McCarran-Ferguson Act and the more recent U.S. Holocaust Assets Commission Act of 1998. There is, however, no need to consider the possible significance for preemption doctrine of tension between an Act of Congress and Presidential foreign policy, cf. generally Youngstown Sheet & Tube Co. v. Sawyer, for neither statute does the job the commissioner ascribes to it.

The provisions of the McCarran-Ferguson Act said to be relevant here specify that “[t]he business of insurance” shall be recognized as a subject of state regulation, which will be good against preemption by federal legislation unless that legislation “specifically relates to the business of insurance.” As the text itself makes clear, the point of McCarran-Ferguson’s legislative choice of leaving insurance regulation generally to the States was to limit congressional preemption under the commerce power, whether dormant or exercised. Quite apart, then, from any doubt whether HVIRA would qualify as regulating “the business of insurance” given its tangential relation to present-day insuring in the State, a federal statute directed to implied preemption by domestic commerce legislation cannot sensibly be construed to address preemption by executive conduct in foreign affairs.

Nor does the Holocaust Commission Act authorize HVIRA. That Act set up a Presidential Commission to “study and develop a historical record of the collection and disposition” of Holocaust era assets that “came into the possession or control of the Federal Government.” For this purpose, Congress directed the Commission to “encourage the National Association of Insurance Commissioners to prepare a report on the Holocaust-related claims practices of all insurance companies, both domestic and foreign, doing business in the United States at any time after January 30, 1933, that issued any individual life, health, or property-casualty insurance policy to any individual on any list of Holocaust victims.” These provisions are no help to HVIRA. The Commission’s focus was limited to assets in the possession of the Government, and if anything, the federal Act assumed it was the National Government’s responsibility to deal with returning those assets. In any event, the federal Act’s reference to the state insurance commissioners as compiling information was expressly limited “to the degree the information is available,” a proviso that can hardly be read to condone state sanctions interfering with federal efforts to resolve such claims.

Indeed, it is worth noting that Congress has done nothing to express disapproval of the President’s policy. Legislation along the lines of HVIRA has been introduced in Congress repeatedly, but none of the bills has come close to making it into law.

In sum, Congress has not acted on the matter addressed here. Given the President’s independent authority “in the areas of foreign policy and national security, ... congressional silence is not to be equated with congressional disapproval.”

The judgment of the Court of Appeals for the Ninth Circuit is reversed. So ordered.

JUSTICE GINSBURG, WITH WHOM JUSTICE STEVENS, JUSTICE SCALIA, AND JUSTICE THOMAS JOIN, DISSENTING.

Responding to Holocaust victims’ and their descendents’ long-frustrated efforts to collect unpaid insurance proceeds, California’s Holocaust Victim Insurance Relief Act of 1999 (HVIRA), requires insurance companies operating in the State to disclose certain information about insurance policies they or their affiliates wrote in Europe between 1920 and 1945. In recent years, the Executive Branch of the Federal Government has become more visible in this area, undertaking foreign policy initiatives aimed at resolving Holocaust-era insurance claims. Although the federal approach differs from California’s, no executive agreement or other formal expression of foreign policy disapproves state disclosure laws like the HVIRA. Absent a clear statement aimed at disclosure requirements by the “one voice” to which courts properly defer in matters of foreign affairs, I would leave intact California’s enactment....

The Court depicts Allied diplomacy after World War II as aimed in part at settling confiscated and unpaid insurance claims. But the multilateral negotiations that produced the Potsdam, Yalta, and like accords failed to achieve any global resolution of such claims. European insurers, encountering no official compulsion, were themselves scarcely inclined to settle claims; turning claimants away, they relied on the absence of formal documentation and other technical infirmities that legions of Holocaust survivors were in no position to remedy.... For over five decades, untold Holocaust-era insurance claims went unpaid.

In the late 1990s, litigation in American courts provided a spur to action. Holocaust survivors and their descendents initiated class-action suits against German and other European firms seeking compensation for the confiscation of Jewish bank assets, the use of Jewish slave labor, and the failure to pay Jewish insurance claims.

In the insurance industry, the litigation propelled a number of European companies to agree on a framework for resolving unpaid claims outside the courts. This concord prompted the 1998 creation of the International Commission on Holocaust Era Insurance Claims (ICHEIC). A voluntary claims settlement organization, ICHEIC comprises several European insurers, Jewish and Holocaust survivor organizations, the State of Israel, and this country’s National Association of Insurance Commissioners.

As the Court observes, ICHEIC has formulated procedures for the filing, investigation, valuation, and resolution of Holocaust-era insurance claims. At least until very recently, however, ICHEIC’s progress has been slow and insecure....

Moreover, ICHEIC has thus far settled only a tiny proportion of the claims it has received. Evidence submitted in a series of class actions filed against Italian insurer Generali indicated that by November 2001, ICHEIC had resolved only 797 of 77,000 claims. The latest reports show only modest increases.

Finally, although ICHEIC has directed its members to publish lists of unpaid Holocaust-era policies, that non-binding directive had not yielded significant compliance at the time this case reached the Court. Shortly after oral argument, ICHEIC-participating German insurers made more substantial disclosures. But other insurers have been less forthcoming. For a prime example, Generali--which may have sold more life insurance and annuity policies in Eastern Europe during the Holocaust than any other company, see Bazyler, supra, at 113--reportedly maintains a 340,000-name list of persons to whom it sold insurance between 1918 and 1945, but has refused to disclose the bulk of the information on the list.

California’s disclosure law, the HVIRA, was enacted a year after ICHEIC’s formation. Observing that at least 5,600 documented Holocaust survivors reside in California ... [t]he Act accordingly requires insurance companies doing business in California to disclose information concerning insurance policies they or their affiliates sold in Europe between 1920 and 1945, §13804(a), and directs California’s Insurance Commissioner to store the information in a publicly accessible “Holocaust Era Insurance Registry,” §13803. The Commissioner is further directed to suspend the license of any insurer that fails to comply with the HVIRA’s reporting requirements....

Despite the absence of express preemption, the Court holds that the HVIRA interferes with foreign policy objectives implicit in the executive agreements. I would not venture down that path.

The Court’s analysis draws substantially on Zschernig v. Miller (1968)....

We have not relied on Zschernig since it was decided, and I would not resurrect that decision here. The notion of “dormant foreign affairs preemption” with which Zschernig is associated resonates most audibly when a state action “reflect[s] a state policy critical of foreign governments and involve[s] ‘sitting in judgment’ on them.”...The HVIRA entails no such state action or policy. It takes no position on any contemporary foreign government and requires no assessment of any existing foreign regime. It is directed solely at private insurers doing business in California, and it requires them solely to disclose information in their or their affiliates’ possession or control. I would not extend Zschernig into this dissimilar domain.

Neither would I stretch Belmont, Pink, or Dames & Moore to support implied preemption by executive agreement. In each of those cases, the Court gave effect to the express terms of an executive agreement. In Dames & Moore, for example, the Court addressed an agreement explicitly extinguishing certain suits in domestic courts. Here, however, none of the executive agreements extinguish any underlying claim for relief. The United States has agreed to file precatory statements advising courts that dismissing Holocaust-era claims accords with American foreign policy, but the German Foundation Agreement confirms that such statements have no legally binding effect. It remains uncertain, therefore, whether even litigation on Holocaust-era insurance claims must be abated in deference to the German Foundation Agreement or the parallel agreements with Austria and France. Indeed, ambiguity on this point appears to have been the studied aim of the American negotiating team.

If it is uncertain whether insurance litigation may continue given the executive agreements on which the Court relies, it should be abundantly clear that those agreements leave disclosure laws like the HVIRA untouched. The contrast with the Litvinov Assignment at issue in Belmont and Pink is marked. That agreement spoke directly to claim assignment in no uncertain terms; Belmont and Pink confirmed that state law could not invalidate the very assignments accomplished by the agreement. Here, the Court invalidates a state disclosure law on grounds of conflict with foreign policy “embod[ied]” in certain executive agreements, although those agreements do not refer to state disclosure laws specifically, or even to information disclosure generally. It therefore is surely an exaggeration to assert that the “HVIRA threatens to frustrate the operation of the particular mechanism the President has chosen” to resolve Holocaust-era claims. If that were so, one might expect to find some reference to laws like the HVIRA in the later-in-time executive agreements. There is none.

To fill the agreements’ silences, the Court points to statements by individual members of the Executive Branch.... But we have never premised foreign affairs preemption on statements of that order. We should not do so here lest we place the considerable power of foreign affairs preemption in the hands of individual sub-Cabinet members of the Executive Branch. Executive officials of any rank may of course be expected “faithfully [to] represen[t] the President’s policy,” but no authoritative text accords such officials the power to invalidate state law simply by conveying the Executive’s views on matters of federal policy. The displacement of state law by preemption properly requires a considerably more formal and binding federal instrument.

Sustaining the HVIRA would not compromise the President’s ability to speak with one voice for the Nation. To the contrary, by declining to invalidate the HVIRA in this case, we would reserve foreign affairs preemption for circumstances where the President, acting under statutory or constitutional authority, has spoken clearly to the issue at hand. And judges should not be the expositors of the Nation’s foreign policy, which is the role they play by acting when the President himself has not taken a clear stand. As I see it, courts step out of their proper role when they rely on no legislative or even executive text, but only on inference and implication, to preempt state laws on foreign affairs grounds.

In sum, assuming, arguendo, that an executive agreement or similarly formal foreign policy statement targeting disclosure could override the HVIRA, there is no such declaration here. Accordingly, I would leave California’s enactment in place, and affirm the judgment of the Court of Appeals.