Number range CHAPTER Nos. 00-16163, 00-16164, 00-16165, and 00-16182

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IN THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

GERLING GLOBAL REINSURANCE CORP. OF AMERICA, et al.,

Plaintiffs-Appellees,

v\.

CLARK KELSO in his capacity as the COMMISSIONER OF

INSURANCE OF THE STATE OF CALIFORNIA,

Defendant-Appellant.

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BRIEF FOR AMICUS CURIAE THE UNITED STATES OF AMERICA

IN SUPPORT OF AFFIRMANCE

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

ON APPEAL FROM A PRELIMINARY INJUNCTION ENTERED

BY THE UNITED STATES DISTRICT COURT FOR THE EASTERN

DISTRICT OF CALIFORNIA, THE HONORABLE WILLIAM B. SHUBB

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

DAVID W. OGDEN

[Assistant Attorney General]{.underline}

PAUL L. SEAVE

[United States Attorney]{.underline}

DAVID J. ANDERSON

DAVID O. BUCHHOLZ

[Attorneys]{.underline}

[Federal Programs Branch]{.underline}

[Civil Division]{.underline}

MARK B. STERN

\(202\) 514-5089

DOUGLAS HALLWARD-DRIEMEIER

\(202\) 514-5735

[Attorneys, Appellate Staff]{.underline}

[Civil Division, Room 9113]{.underline}

[Department of Justice]{.underline}

[Washington, D.C. 20530-0001]{.underline}

Attorneys for the United States

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**INTRODUCTION**

In a group of closely related statutes, California has addressed a
subject of crucial concern to the United States: the compensation of
Holocaust victims and their survivors. The United States has committed
its efforts to a swift and equitable resolution of private claims
against private corporations arising out of the Nazi era. In conjunction
with the establishment of a German foundation to pay Nazi-era claims,
which will be funded by contributions from the German government and
German companies, the United States has signed an executive agreement
with the Government of the Federal Republic of Germany. When the
agreement enters into force, the United States will undertake to inform
United States courts \"that it would be in the\[\] interests \[of the
United States and the Federal Republic of Germany\] for the Foundation
to be the exclusive remedy and forum for the resolution of, all claims
that have been or may be asserted against German companies arising from
the National Socialist era and World War II.\" Addendum B, Art. 1(1).

We are filing this brief to make clear the purpose of the Agreement and
to address the constitutionality of California\'s own efforts to resolve
claims against insurance companies arising from the National Socialist
era and World War II. As we discuss below, plaintiffs' claims that the
California legislation infringes upon the Federal Government\'s
responsibility for the regulation of foreign commerce and for the
conduct of foreign affairs present substantial legal questions that
support affirmance of the preliminary injunction.

# STATEMENT OF FACTS

**A. [United States Policy Concerning Nazi-Era Claims.]{.underline}**

The policy of the United States Government with regard to claims for
restitution or compensation by Holocaust survivors and other victims of
the Nazi era is motivated by the twin concerns of justice and urgency.
No price can be put on the suffering that the victims of Nazi atrocities
endured. But the moral imperative remains to provide some measure of
justice to the victims of the Holocaust, and to do so in their remaining
lifetimes. The United States believes that concerned parties, foreign
governments, and non-governmental organizations should act to resolve
matters of Nazi-era restitution and compensation through dialogue,
negotiation, and cooperation; victims and their families should not be
subjected to the prolonged uncertainty and delay that accompany
litigation.

Toward these ends, the United States has engaged, and continues to
engage, in discussions with foreign governments, foreign corporations,
international non-governmental organizations and attorneys for certain
victims. Since the end of World War II, the United States has worked in
numerous ways to achieve restitution and compensation for Nazi victims.
These efforts have included the work of the United States military
during the immediate post-war period and the Convention on the
Settlement of Matters Arising out of the War and the Occupation, agreed
to between the Federal Republic of Germany, the United States, the
United Kingdom, and France in 1952 and amended in 1954 (ER 1258-1343).
More recent efforts include the United States\' participation in the
process of discussion and negotiation that culminated with the creation,
by the Federal Republic of Germany and German companies, of the
Foundation \"Remembrance, Responsibility and the Future\"
(\"Foundation\") under German law.

In the Fall of 1998, then-Under Secretary of State Stuart E. Eizenstat
was asked by the German Government to help facilitate a resolution of
class action lawsuits filed in U.S. courts arising from slave and forced
labor and other acts committed during the Nazi era. During the
subsequent year and a half, Eizenstat, who later became Deputy Treasury
Secretary and Special Representative of the President and Secretary of
State for Holocaust Issues, co-chaired, with a representative of the
German Chancellor, a series of formal and informal negotiations on the
German Foundation Initiative to establish a foundation to make payments
to private and public sector forced laborers and all those who suffered
at the hands of German companies during the Nazi era, including
individuals with claims under Holocaust-era insurance policies. These
discussions included lawyers representing certain victims, lawyers for
German companies, and the German Government.[^1]

In December 1999, following the personal involvement of the President of
the United States and the German Chancellor, the negotiations achieved a
breakthrough. The participants in the negotiations agreed on two key
points: the establishment of a foundation by the German Government and
German companies, capitalized by DM 10 billion, to make payments to
private and public sector slave and forced laborers and others who
suffered at the hands of German companies during the Nazi era and World
War II, and, in exchange, the voluntary dismissal by participating
plaintiffs of their lawsuits against German companies asserting claims
arising out of the Nazi era and World War II.

In July 2000, the German Parliament passed a law creating the
Foundation, to be funded with DM 10 billion, contributed in part by the
German government and in part by German corporations. Of this, DM 500
million has been set aside for payments to individuals whose insurance
policies were unpaid or confiscated during the war. Although the
Foundation has been established, it is not yet fully in effect. The
German government and companies have taken the position that the
Foundation will not be funded and, therefore, no claims will be paid by
the Foundation until all claims by victims pending in United States
courts have been finally dismissed. [See]{.underline} Joint Statement on
occasion of the final plenary meeting concluding international talks on
the preparation of the Foundation \"Remembrance, Responsibility and the
Future,\" ¶ 4(d) (Addendum A).

On July 17, 2000, the United States and Germany signed an \"Agreement
between the Government of the United States of America and the
Government of the Federal Republic of Germany concerning the Foundation
\'Remembrance, Responsibility and the Future\'\" (the \"Foundation
Agreement\" or \"Agreement\" Addendum B). In the Foundation Agreement,
the American and German governments recognize the creation of the
Foundation and \"agree that the Foundation \... covers, and that it
would be in their interests for the Foundation to be the exclusive
remedy and forum for the resolution of, all claims that have been or may
be asserted against German companies arising from the National Socialist
era and World War II.\" Foundation Agreement, Art. 1(1). The Agreement
is not yet in force. It will become effective upon the exchange of
diplomatic notes between the United States and German governments.
[See]{.underline} [id.]{.underline}, Art. 5. We expect this exchange to
take place in the near future.

For its part, the United States agrees to file a Statement of Interest
in lawsuits filed in the United States asserting Nazi-era claims against
German companies. The Statement of Interest will inform the court that
\"it would be in the foreign policy interests of the United States for
the Foundation to be the exclusive remedy and forum for resolving such
claims \... and that dismissal of such cases would be in its foreign
policy interest.\" Art. 2(1). In addition, the United States,
\"recognizing the importance of the objectives of this agreement,
including all-embracing and enduring legal peace,\" undertakes to \"use
its best efforts, in a manner it considers appropriate, to achieve these
objectives with state and local governments.\" Art. 2(2).

The Foundation Agreement and the United States\' role in its negotiation
are unique. The Foundation Agreement is not a government-to-government
claims settlement agreement. As the Agreement makes clear, U.S. policy
interests favor \"dismissal on any valid legal ground,\" of all
\"National Socialist and World War II era cases against German
companies.\" Annex B ¶ 3. And the United States undertakes to explain
that interest in court proceedings and to take appropriate steps to
achieve the objectives of the Agreement with state and local
governments. Art. 2(1), (2). At the same time, the Agreement also makes
explicit that \"the United States does not suggest that its policy
interests concerning the Foundation in themselves provide an independent
legal basis for dismissal\" of private claims against German companies.
Annex B, ¶¶ 3, 7. The Foundation Agreement reflects the United States'
policy of fostering voluntary cooperation between the victims'
constituencies on one side and the German government and companies on
the other to bring expeditious justice to the widest possible population
of survivors.

In addition to the Foundation, the United States has also encouraged
participation in the International Commission of Holocaust Era Insurance
Claims (\"ICHEIC\"), a voluntary organization which has established
procedures for the processing and payment of Holocaust-era insurance
claims. As part of the Foundation Agreement, the German government has
agreed that such insurance claims against German insurance companies
will be processed on the basis of claims-handling procedures established
by the ICHEIC. Art. 1(4). ICHEIC is a voluntary organization, chaired by
former United States Secretary of State Lawrence S. Eagleburger, formed
by five European insurance companies (including plaintiffs Generali and
Winterthur), the State of Israel, Jewish organizations, and the National
Association of Insurance Commissioners.[^2] The State Department has
stated that ICHEIC \"should be recognized as the exclusive remedies for
all insurance claims that date to the Nazi era\" and has
\"encourag\[ed\] all insurance companies that wrote policies during the
Nazi era to join the ICHEIC.\" State Department Press Statement, Feb.
15, 2000.[^3] The United States continues to urge all insurance
companies that issued Holocaust-era insurance policies to join ICHEIC.

In view of the importance of the Foundation Agreement, we wish to
correct some misunderstandings reflected in the brief of the American
Insurance Association (\"AIA\") concerning the undertakings of the U.S.
Government and the impact of the procedures established by the Agreement
on existing legal remedies available to American citizens against
private corporations. AIA states that \"\[t\]he federal government \...
has committed to give affected insurers legal peace, including against
state litigation and regulatory action,\" AIA Br. 1, and that the
Foundation Agreement \"imposes a duty on the United States to achieve
\'all-embracing and enduring legal peace\' for German companies.\" AIA
Br. 2. The United States has committed to various unprecedented
undertakings in the Agreement. As discussed, the United States has
committed to file a Statement of Interest in private suits against
German companies explaining that \"it would be in the foreign policy
interests of the United States for the Foundation to be the exclusive
remedy and forum for resolving such claims,\" Foundation Agreement, Art.
2(1), and has committed to \"use its best efforts, in a manner it
considers appropriate, to achieve the objectives\" of the Agreement,
Art. 2(2). It has not, however, undertaken a \"duty \... to achieve\"
legal peace for German companies against state litigation and regulatory
action.

Nor does the Foundation Agreement itself preclude individuals from
filing suit on their insurance policies in court. [Cf.]{.underline},
[e.g.]{.underline}, AIA Br. at 2 (stating that the Agreement \"creates
on exclusive remedy and forum\"); [id.]{.underline} at 12 (stating that
the Agreement "mandates that insurance claims that come within the scope
of \... ICHEIC \'shall be processed \... on the basis of such
procedures\'\"). Although the Agreement obligates the German Foundation
to process insurance claims against German companies according to ICHEIC
procedures, Foundation Agreement, Art. 1(4), it does not mandate that
individual policyholders or beneficiaries bring their claims in that
forum. And while the Agreement states that it is in the national
interest of the United States that the Foundation be the exclusive forum
for such claims, it does not \"create\" an exclusive remedy; rather, it
specifically declares that \"\[t\]he United States does not suggest that
its policy interests concerning the Foundation in themselves provide an
independent basis for dismissal\" of private claims. Foundation
Agreement, Annex B, ¶ 7.[^4] As we discuss below, the premises
underlying the Agreement and the California statutes are plainly
different. But AIA is mistaken in asserting that the Foundation
Agreement in \"direct conflict\" with California law (AIA Br. 4), if, by
this, AIA means to suggest that the Agreement by its terms preempts the
California statute.

For the reasons set out below, we believe that there are substantial
questions that the California statute impairs interests protected by the
Foreign Commerce Clause and other constitutional restraints and that
these questions justify a preliminary injunction. But affirmance of the
district court's order should not rest on any misunderstanding about the
scope of the Foundation Agreement.

**B. California Law Regarding Holocaust-Era Insurance [Policies.
]{.underline}**

California has enacted several closely related statutes pertaining to
insurance policies issued in Europe between 1920 and 1945. The statutory
disclosure requirements are contained in the Holocaust Victim Insurance
Relief Act, Cal. Ins. Code §§ 13800-13807 (\"HVIRA\"), enacted in
October 1999. The statute mandates broad disclosures of information
regarding all policies issued in Europe in that time period, including
the names of policyholders and beneficiaries and a certification as to
whether and how policy proceeds have been paid out. [See]{.underline}
[id.]{.underline} at § 13804.

The disclosure requirement applies not only to policies issued by the
insurer doing business in California, but also to any policy issued by
any company with which the insurer is related or affiliated. The
requirement applies regardless of the affiliate\'s contacts with
California, and applies even to policies that predate the companies\'
relationship. [See]{.underline} [id.]{.underline} at §§ 13802(b),
13804(a). Section 790.15(b)(4) of the California Insurance Code defines
affiliate broadly to include parents, subsidiaries, and subsidiaries of
common parents.

Under the HVIRA, any insurer that fails to provide required information
to the Commissioner of Insurance faces suspension of its license to do
business in California. [See]{.underline} Cal. Inc. Code § 13806.

The disclosure requirements of the HVIRA form part of a statutory
framework establishing causes of action to recover on policies issued in
Europe prior to 1945.[^5] Section 354.5 of California\'s Code of Civil
Procedure, adopted in 1998, grants state courts venue and jurisdiction
over any claim by a California resident based upon a pre-1945 insurance
policy issued in Europe, if jurisdiction comports with constitutional
limitations, Cal. Code Civ. Pro. § 354.5(b), and abolishes any statute
of limitations defense to such claims, whether the plaintiff is a
California resident or not, if the claim is brought by December 31,
2010, [id.]{.underline} at § 354.5(c). That statute further provides
that suits brought on these policies in California courts are \"subject
to California law\" and that forum selection provisions in the policies
are unenforceable. Cal. Stats. 1998, c. 43 (A.B. 1334), § 1(b).

Section 790.15 of the California Insurance Code, also adopted in 1998,
requires the Commissioner of Insurance to suspend the license of any
insurer if it, or one of its affiliates, fails to pay \"any valid
claim\" on a policy issued to a person who was \"a victim of persecution
of Jewish and other peoples preceding and during World War II by
Germany, its allies, or sympathizers.\" Cal Ins. Code. § 790.15(a),
(b)(1). The statute defines \"claims\" to include claims that insurers
refuse to pay because the records were lost or the policies confiscated
by the Nazis or their allies. [Id.]{.underline} at § 790.15(b)(3). The
license suspension provision applies whether the denied claim is brought
by a resident of California or by a non-resident.

Section 790.15 provides for a hearing before an administrative law judge
on any accusation against an insurer, but allows the Commissioner to
suspend an insurer\'s license prior to a hearing if the Commissioner
determines that a suspension is necessary to protect the interests of
Holocaust survivors. [See]{.underline} [id.]{.underline} at § 790.15(c).
In determining whether to suspend an insurer\'s license, the
Commissioner is directed to consider whether the insurer is
participating in an \"international commission\" on Holocaust insurance
claims and \"whether the commission is making meaningful and expeditious
progress toward paying claims to survivors and righting the historic
wrong done to Holocaust victims.\" [Id.]{.underline} at § 790.15(e). The
insurer\'s authorization is to remain suspended until the insurer or its
affiliate pays the claim. [Id.]{.underline} at § 790.15(a).

# SUMMARY OF ARGUMENT

The United States is committed to the goal of securing equitable
compensation for Holocaust victims. In pursuit of that goal, the Federal
Government has undertaken prolonged, intense international negotiations
and has entered into the Foundation Agreement to secure speedy
resolution of claims.

In the HVIRA and closely related statutes, California has also addressed
the issue of compensation for Holocaust victims. Citing substantial
legal concerns that the HVIRA impermissibly intrudes on the Federal
Government's authority to regulate foreign commerce and conduct foreign
policy, the district court preliminary enjoined the enforcement of the
statutory disclosure requirements.

On this appeal, the Court need not finally resolve the merits of
plaintiffs' challenge. The Court may affirm if it finds, as the district
court held, that plaintiffs had demonstrated a likelihood of success on
the merits in their challenge to the HVIRA. Indeed, in light of the
district court's finding that the preliminary injunction is required to
avoid irreparable harm, the injunction may be affirmed as long as
serious legal questions are raised. [United States]{.underline} v.
[Nutri-Cology, Inc.]{.underline}, 982 F.2d 394, 397 (9th Cir. 1992).

As we discuss below, the substantial legal concerns posed by the
California regulatory scheme, balanced with the competing equities and
the public interest in furthering the purpose of the Foundation
Agreement, warrant affirmance of the district court\'s preliminary
injunction at this critical moment in the implementation of the
Agreement.

The statute raises serious legal questions under three prongs of
Commerce Clause analysis. For related reasons, the California scheme
implicates the constitutional bar to extraterritorial state regulation
of foreign commerce; the restriction on discriminatory state regulation
of foreign commerce; and the preclusion of state regulation that impairs
the national government's ability to speak with one voice.

First, although the California statute on its face appears to regulate
disclosures in California, its impact falls chiefly on insurers with
foreign affiliates. The HVIRA requires disclosure of insurance policies
executed in foreign nations between foreign nationals more than half a
century ago. There is no requirement that any of the initial
transactions have any relation whatsoever to California. Nor is the
statute limited to corporations doing business in California at the
present; it extends, instead, to all affiliates of insurance
corporations doing business in California. The statute thus imposes
regulatory requirements on corporations that have never done business in
California with respect to policies issued to foreign nationals who
themselves have no connection to California.

Second, the California statute raises questions of impermissible
discrimination barred by the Commerce Clause by placing a heavy burden
on California insurers with foreign affiliates that is not borne by
insurers doing business domestically only.

Third, by attempting to regulate extraterritorially in an area directly
addressed by federal negotiators, California has raised serious concerns
that its regulations impermissibly impair the Federal Government\'s
ability to speak with one voice in foreign affairs.

Finally, as the district court concluded, for many of the same reasons
underlying its Commerce Clause analysis, there are substantial questions
as to whether California\'s statute has intruded into the Federal
Government\'s exclusive authority to conduct foreign policy. The
Foundation Agreement does not, by its terms, preclude state regulation
that bears on claims from the National Socialist era. At the same time,
the Federal Government\'s efforts to support a preferred mechanism for
the swift and equitable resolution of such claims cannot readily
co-exist with a state scheme of extraterritorial regulation that imposes
extensive requirements on foreign nationals unrelated to their contact
with California.

# ARGUMENT

**I. PLAINTIFFS\' SUIT RAISES SUBSTANTIAL QUESTIONS AS TO WHETHER
CALIFORNIA\'S HOLOCAUST-ERA INSURANCE LAWS INVADE THE COMMERCE CLAUSE\'S
GRANT TO THE FEDERAL GOVERNMENT OF THE POWER TO REGULATE FOREIGN
COMMERCE.**

The Constitution grants to the United States Congress the power \"\[t\]o
regulate Commerce with foreign Nations, and among the several States.\"
U.S. Const., Art. 1, § 8, cl. 3. The Commerce Clause \"has long been
understood\" not only as an affirmative grant of authority to the
Federal Government, but as a constraint upon the power of the States,
which \"\'provide\[s\] protection from state legislation inimical to the
national commerce \[even\] where Congress has not acted.\'\" [Barclays
Bank PLC]{.underline} v. [Franchise Tax Board]{.underline}, 512 U.S.
298, 310 (1994)(quoting [Southern Pacific Co.]{.underline} v.
[Arizona]{.underline}, 325 U.S. 761, 769 (1945)).

Because the exclusive grant of authority to the national government was
intended to preclude a proliferation of trade barriers and diverse,
inconsistent regulatory schemes, the Commerce Clause has always been
understood to restrict a State's authority to regulate with regard to
commerce outside its borders or to establish regulations that place
discriminatory burdens on out-of-state commerce. Because of the special
concerns that obtain in the international arena, the Supreme Court has
also held that state regulation exceeds Commerce Cause limits when it
impedes the ability of the national government to speak with one voice.
For related reasons, the California regulatory regime raises significant
questions with respect to each of these prongs of Commerce Clause
analysis.

**A. [Extraterritorial Regulation.]{.underline}**

1\. The Commerce Clause \"precludes the application of a state statute
to commerce that takes place wholly outside of the State\'s borders.\"
[Edgar]{.underline} v. [MITE Corp.]{.underline}, 457 U.S. 624, 642-43
(1982) (plurality opinion). Neither may a State \"impose economic
sanctions on violators of its laws with the intent of changing the
\[violator\'s\] lawful conduct in other States.\" [BMW of North America,
Inc.]{.underline} v. [Gore]{.underline}, 517 U.S. 559, 572 (1996).

Extraterritorial regulation \"exceeds the inherent limits of the
enacting State\'s authority and is invalid regardless of whether the
statute\'s extraterritorial reach was intended by the legislature.\"
[Healy]{.underline} v. [Beer Institute]{.underline}, 491 U.S. 324, 336
(1989). Thus, \"the critical inquiry is whether the [practical
effect]{.underline} of the regulation is to control conduct beyond the
boundaries of the State.\" [Ibid.]{.underline} (emphasis added).

The prohibition on extraterritorial legislation furthers the crucial
constitutional goal of protecting \"against inconsistent legislation
arising from the projection of one state regulatory regime into the
jurisdiction of another State.\" [Healy]{.underline}, 491 U.S. at
336-37. Accordingly, to evaluate the practical extraterritorial effect
of a statute, the court must \"consider\[\] how the challenged statute
may interact with the legitimate regulatory regimes of other States and
what effect would arise if not one, but many or every, State adopted
similar legislation.\" [Id.]{.underline} at 336.

A state regulation may be impermissibly extraterritorial even though, in
a narrow sense, it relates to conduct within the State. Thus, in
[Healy]{.underline}, the Court struck down a Connecticut statute that
required beer distributors to file, in Connecticut, a statement that
their Connecticut prices did not exceed the price charged by the
distributor in any neighboring State, even though, as a technical
matter, the statute only regulated conduct within Connecticut. 491 U.S.
at 328-29 & n.5. As the Court explained, even though the statute
appeared to be aimed only at in-state conduct, it had the practical
effect of precluding the distributors from reacting to different market
conditions that might exist in neighboring States. [Id.]{.underline} at
338. [See also]{.underline} [Brown-Forman Distillers Corp.]{.underline}
v. [New York State Liquor Auth.]{.underline}, 476 U.S. 573 (1986).

Nor is the bar on extraterritorial regulation avoided merely because the
commerce at issue has effects within the State. [See]{.underline}
[Healy]{.underline}, 491 U.S. at 336 (Commerce Clause precludes
extraterritorial legislation \"whether or not the commerce has effects
within the State\" (quoting [Edgar]{.underline}, 457 U.S. at 642-43
(plurality opinion))). Thus, in [Edgar]{.underline}, a plurality of the
Court held that Illinois could not regulate the takeover of an Illinois
corporation without impermissibly regulating the out-of-state offeror as
well as the shareholders of the target company who were not Illinois
residents. 457 U.S. at 642. [See also]{.underline} [Dean Foods
Co.]{.underline} v. [Brancel]{.underline}, 187 F.3d 609, 619 (7th Cir.
1999) (Wisconsin could not apply its prohibition on volume discounts to
an Illinois milk processor\'s purchase, in Illinois, of Wisconsin milk
even though \"the sales have an effect that is felt, perhaps even
predominantly, in Wisconsin\").

2\. Application of these principles raises serious questions as to the
HVIRA\'s constitutionality. The HVIRA\'s disclosure requirements apply
to potentially millions of insurance policies issued in Europe to
Europeans, generally by European insurers. The only connection with
California is that policyholders and beneficiaries -- persons who were
not directly involved in making the contracts -- of [some]{.underline}
policies may currently live in California. The vast majority of the
covered policies have no nexus with California. California may not rely
upon its limited connection with some policies to regulate other
policies with which its residents have no connection at all.
[See]{.underline} [Edgar]{.underline}, 457 U.S. at 642 (plurality
opinion) (Illinois requirement that offeror make precommencement
disclosure of tender offer for Illinois corporation violated the dormant
Commerce Clause where \"law on its face would apply even if not a single
one of \[the target company\'s\] shareholders were a resident of
Illinois\").

The constitutional infirmities of California\'s regulatory program are
underscored by its application to corporations that have never done
business in California at all. The HVIRA requires not only that insurers
doing business in California disclose their own out-of-state records,
but also requires them to obtain and disclose the out-of-state records
of their affiliates, even if the affiliated company has never done
business in California and even if the insurers\' relationship
post-dates the sale of any Holocaust-era policies.

By regulating extraterritorially, California may subject insurance
corporations to conflicting legal obligations. Insurers doing business
in California must make disclosure of personal information or face
suspension of their license. Plaintiffs urge that such obligations may
conflict directly with the privacy laws of the nation in which the
contract was written and in which the insurer resides.[^6] Whether or
not this is true, such potential conflicts are precisely the type of
problem that the Commerce Clause prevents by granting the Federal
Government the authority to regulate interstate commerce.
[See]{.underline} [Healy]{.underline}, 491 U.S. at 336-37 (prohibition
on extraterritorial regulation \"protects against inconsistent
legislation\").

The sweeping scope of California\'s disclosure requirements is directly
related to the larger regulatory framework of which the HVIRA forms a
part. For example, the HVIRA compels disclosure not only of unpaid
policies issued to Holocaust victims, but to all policies, paid and
unpaid, issued during a 25-year period in Europe. The breadth of that
requirement is best understood in conjunction with the related statutes
that create the State\'s own definition of when a policy has, a matter
of California law, been paid. The State will suspend an insurer\'s
license to do business in California if that insurer \"has failed to pay
any valid claim,\" and provides a broad definition of \"claims\"
cognizable under the statute. [See]{.underline} Cal. Ins. Code §§
790.15, 790.15(b)(3).

These provisions, like the disclosure requirement itself, apply not only
to conduct by an insurer doing business in California, but also when
\"any affiliate\" of the insurer denies \"any valid claim\" by a
Holocaust survivor or beneficiary, whether the claimant is a resident of
California or not. Cal. Ins. Code § 790.15. Thus, the Commissioner of
Insurance is required to suspend a California insurer\'s license if the
insurer\'s European affiliate refuses, under European law, to pay the
claim of a European beneficiary, if California deems the claim to be
\"valid.\" In this way, California would extend its regulations to
persons and transactions with which it has no connection at all, by
threatening the license of one corporation to compel payments by its
affiliates.

The vast extraterritorial reach of these statutes makes plain that the
scope of the HVIRA\'s disclosure requirements is not mere happenstance.
[Cf.]{.underline} Appellant\'s Opening Br., 6 n.3 (urging that the State
was simply unable to draw a more narrowly tailored disclosure
requirement). We do not urge that any and all disclosure requirements
regarding foreign activities that a State might impose would be
impermissibly extraterritorial. As the Supreme Court has made clear,
\"\[t\]he critical inquiry is whether the practical effect of the
regulation is to control conduct beyond the boundaries of the State.\"
[Healy]{.underline}, 491 U.S. at 336. At this juncture, it appears that
extraterritorial regulation is indeed the purpose and effect of the
California statutes.

**B. [Discrimination Against Foreign Commerce.]{.underline}**

A state law that discriminates against interstate or foreign commerce
can be sustained only if it \"advanc\[es\] a legitimate local purpose
that cannot be adequately served by reasonable nondiscriminatory
alternatives,\" [Camps Newfound/Owatonna, Inc.]{.underline} v. [Town of
Harrison]{.underline}, 520 U.S. 564, 581 (1997), or \"with a lesser
impact on interstate activities,\" [Pike]{.underline} v. [Bruce Church,
Inc.]{.underline}, 397 U.S. 137, 142 (1970). Where the statute is
facially discriminatory the State\'s burden to sustain such a statute is
\"an extremely difficult\" one, \"so heavy that facial discrimination by
itself may be a fatal defect.\" [Camps Newfound]{.underline}, 520 U.S.
at 582 (quoting [Oregon Waste Systems, Inc.]{.underline} v. [Department
of Environmental Quality]{.underline}, 511 U.S. 93, 101 (1994)). As the
Supreme Court has held, a statute that imposes burdens exclusively on
companies that do business both in the State and outside it
discriminates against interstate commerce. [See]{.underline}
[Healy]{.underline}, 491 U.S. 341 (holding that Connecticut\'s
price-affirmation law discriminated against interstate commerce because
the burden fell only on companies that sold both in Connecticut and in
neighboring States).

There is at least a serious question whether California\'s disclosure
statute can be sustained under these principles. The HVIRA places a
burden only on those insurance companies that did business in Europe or
European insurance companies that are affiliated with a California
insurer. In contrast, California law generally limits the disclosure of
personal information received in connection with insurance transactions
in that State. [See]{.underline} Cal. Ins. Code § 791.13.

The burden of the California disclosure law is potentially enormous,
requiring detailed information on every policy issued in Europe by a
company or its affiliates over a twenty-five year period. When a State
discriminates against those insurers with foreign affiliates, such
discrimination, like extraterritorial regulation, is highly likely to
raise foreign relations problems.

**C. Interference With The Federal Government\'s Ability To Speak With
One Voice On Matters Of [Foreign Affairs. ]{.underline}**

Independent of its prohibition on extraterritorial and discriminatory
legislation, the dormant Foreign Commerce Clause prevents States from
regulating commerce in a manner that \"prevents the Federal Government
from \'speaking with one voice when regulating commercial relations with
foreign governments.\'\" [Japan Line, Ltd.]{.underline} v. [County of
Los Angeles]{.underline}, 441 U.S. 434, 451 (1979)(quoting [Michelin
Tire Corp.]{.underline} v. [Wages]{.underline}, 423 U.S. 276, 285
(1976)). A state statute \"will violate the \'one voice\' standard if it
[either]{.underline} implicates foreign policy issues which must be left
to the Federal Government [or]{.underline} violates a clear federal
directive.\" [Container Corp.]{.underline} v. [Franchise Tax
Bd.]{.underline}, 463 U.S. 159, 194 (1983).

Because the vast majority of Holocaust-era insurance policies were
issued by European insurance companies that have never done business in
the United States, regulation of these policies, by its nature,
implicates international relations. As the Supreme Court has recognized,
the regulation of foreign companies through extraterritorial legislation
necessarily touches upon the \"delicate field of international
relations.\" [McCulloch]{.underline} v. [Sociedad Nacional de Marineros
de Honduras]{.underline}, 372 U.S. 10, 21-22 (1963). Such foreign policy
decisions must be made by the political branches of the Federal
Government. [See]{.underline} [id.]{.underline} at 22 (\"Congress \...
\'alone has the facilities necessary to make fairly such an important
policy decision\'\" (quoting [Benz]{.underline} v. [Compania Naviera
Hidalgo]{.underline}, 353 U.S. 138, 147 (1957))). Indeed, because of the
potential for conflict inherent in extraterritorial legislation, the
Supreme Court has adopted a rule of construction that even \"legislation
of Congress, unless a contrary intent appears, is meant to apply only
within the territorial jurisdiction of the United States.\"
[EEOC]{.underline} v. [Arabian American Oil Co.]{.underline}, 499 U.S.
244, 248 (1991) (quoting [Foley Bros. Inc.]{.underline} v.
[Filardo]{.underline}, 336 U.S. 281, 285 (1949))). This rule \"serves to
protect against unintended clashes between our laws and those of other
nations which could result in international discord.\" [Arab American
Oil Co.]{.underline}, 499 U.S. at 248.

California\'s approach also risks frustrating the President\'s ability
to speak with one voice as \"the sole organ of the nation in its
external relations, and its sole representative with foreign nations.\"
[United States]{.underline} v. [Curtiss-Wright Export
Corp.]{.underline}, 299 U.S. 304, 319 (1936).[^7] By enacting HVIRA,
California has created its own policy in a particular area of foreign
commerce -- one which judges companies by their participation in
international negotiations and imposes penalties on companies who are
fully complying with foreign law. California has claimed for itself the
power to judge the activities of foreign insurers in connection with
international compensation programs and has threatened to suspend the
license of any insurer if that insurer or one of its affiliates does not
pay what California considers to be a \"valid claim,\" as determined by
an Administrative Law Judge or the Commissioner himself. Cal. Ins. Code
§ 790.15(a). If each State were free to impose burdens that diverge from
the foreign policy interests of the nation as expressed by the President
and to have its own foreign policy, it would, as the Supreme Court has
noted, significantly diminish the President\'s \"economic and diplomatic
leverage\" and, hence, his authority to negotiate agreements with
foreign governments. [See]{.underline} [Crosby]{.underline} v. [National
Foreign Trade Council]{.underline}, 120 S. Ct. 2288, 2296 (2000).

The impact of California\'s laws on foreign relations is not merely
hypothetical. Indeed, at the foundation of a Joint Economic Commission
(\"JEC\") between the United States and Swiss governments, the
governments issued a joint statement which referred to the \"potentially
disruptive and counterproductive effects\" that \"the threat of actual
use of sanctions on a sub-federal level\" would have on efforts to
resolve Holocaust-era claims. [See]{.underline} Joint Statement of the
United States and Swiss Governments on the Occasion of the Inaugural
Meeting Establishing the U.S.-Swiss Joint Economic Commission, January
29, 2000 (Winterthur SER 140). Deputy Secretary Eizenstat wrote the
California Insurance Commissioner and informed him that \"actions by
California, pursuant to \[the HVIRA\], have already threatened to damage
the cooperative spirit which the International Commission requires to
resolve this important issue for Holocaust survivors.\" Letter from
Stuart E. Eizenstat to Charles Quackenbush, dated November 30, 1999 (ER
2300). Indeed, both the German and Swiss governments have, in diplomatic
communications with the State Department, stated that they are very
disturbed by California\'s attempts to dictate the response of German
and Swiss companies to the issue of Holocaust-era claims.

The California statutes\' impact on the Federal Government\'s ability to
speak with one voice is particularly significant at this juncture. The
German government and German companies have taken the position that no
claims will be paid by the Foundation until all pending court suits
against German companies are finally dismissed. The United States has
undertaken to file a Statement of Interest in such private suits
explaining that \"it would be in the foreign policy interests of the
United States for the Foundation to be the exclusive remedy and forum
for resolving such claims \... and that dismissal of such cases would be
in its foreign policy interest.\" [Id.]{.underline} at Art. 2(1). The
success of the Agreement may well be determined in the next several
months as private litigants voluntarily dismiss their claims (as
contemplated by the Foundation Agreement) and as the courts consider
such motions as well as motions addressing the viability of their
claims. Especially at this crucial time, the California scheme to
facilitate and expand private litigation is contrary to the Federal
Government\'s diplomatic efforts abroad and the foreign policy interests
it has identified in the Agreement, including the twin goals of
promoting expeditious and equitable payments to Holocaust victims and
legal closure and peace with respect to existing claims against German
companies. After lengthy and difficult negotiations, the Executive
Branch made the policy determination that it is preferable -- both for
the benefit of Holocaust victims (and their survivors) as a group, and
for the relationship between the United States and Germany -- that a
large number of victims receive some compensation now, rather than that
substantial additional time and money be expended in a (likely futile)
effort to achieve absolute justice for each potential claimant. The
California law proceeds from the opposite premise.

As noted above, we do not suggest that all disclosure requirements would
inevitably violate principles of extraterritoriality. Similarly, not all
disclosure requirements would impair the Federal Government\'s ability
to speak with one voice in the same manner as the HVIRA. For example,
when Congress, in a different context, addressed a possible role for
state insurance regulators in gathering information on Holocaust-era
insurance policies, it provided for a limited role that avoids the most
troublesome features of the California law. In the U.S. Holocaust Assets
Commission Act, Pub. L. 105-186, 112 Stat. 611 (1998), Congress
established a Commission to address the disposition of certain
Holocaust-era assets. The statute 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 U.S. at any time after
January 30, 1933\" that issued an insurance policy to \"any individual
on any list of Holocaust victims.\" [Id.]{.underline} at § 3(a)(4)(A).
The statute provides that the report should include, to the extent
information is available, \"the number of policies issued by each
company\" to Holocaust victims, \"the value of each policy at the time
of issue,\" \"the total number of policies and the dollar amount that
have been paid out,\" and the \"total present day value of assets in the
U.S. of each company.\" [Id.]{.underline} at § 3(a)(4)(B).

Congress only requested that the Commission, through state insurance
commissioners, gather information \"to the degree the information is
available.\" [Ibid.]{.underline} Congress did [not]{.underline} impose
reporting requirements under threat of sanctions and did not authorize
states to impose such sanctions. Moreover, the information specifically
identified by Congress concerned only companies doing business in the
United States subsequent to 1933 and did not include highly personal
information, such as the names and addresses of policy holders or
beneficiaries, that would likely be the subject of privacy laws in the
countries where the policies were written.

**D. [The McCarran-Ferguson Act Does Not Save The HVIRA.]{.underline}**

Contrary to the Commissioner\'s contentions, the McCarran-Ferguson Act,
15 U.S.C. §§ 1011 et seq., does not protect the HVIRA from scrutiny
under the dormant Foreign Commerce Clause. Although the
McCarran-Ferguson Act generally removes the dormant Commerce Clause\'s
restriction on States\' regulation of insurance, [see]{.underline}
[Western and Southern Life Ins. Co.]{.underline} v. [State Bd. of
Equalization]{.underline}, 451 U.S. 648, 655 (1981), that Act does not
shield a State\'s attempt to regulate insurance extraterritorially. Nor
does the Act empower the States to regulate insurance in a manner that
discriminates against foreign insurers or otherwise interferes with the
Federal Government\'s ability to conduct the nation\'s foreign
relations.

In [FTC]{.underline} v. [Travelers Health Ass\'n]{.underline}, 362 U.S.
293 (1960), the Court considered whether the McCarran-Ferguson Act
immunized a Nebraska insurer from application of an FTC cease-and-desist
order that prohibited the insurer from making misleading statements to
prospective out-of-state buyers. [Id.]{.underline} at 296. The Court
addressed the general rule of the McCarran-Ferguson Act, which leaves
the regulation of insurance to the States, and the exception, contained
in section 1012(b), under which the FTC may regulate insurance matters
not already regulated by the States.[^8] The insurer argued that the FTC
lacked authority because the insurer\'s out-of-state mailings were
already subject to regulation by Nebraska. The Supreme Court rejected
the insurer\'s argument and concluded that \"Congress viewed state
regulation of insurance solely in terms of regulation by the law of the
State where occurred the activity sought to be regulated. There was no
indication of any thought that a State could regulate activities carried
on beyond its own borders.\" [Id.]{.underline} at 300. [See
also]{.underline} [id.]{.underline} at 301 (noting that Senate conferees
\"repeatedly emphasized that the provision did not authorize state
regulation of extraterritorial activities\").

The Commissioner argues that [Travelers]{.underline} involved only the
FTC exception to the McCarran-Ferguson Act and that the decision casts
no light on the general rule which leaves regulation of insurance to the
States. [See]{.underline} Appellant\'s Opening Brief, 36-42. But the
Court\'s reasoning and the language of the statute do not support this
distinction. The general rule is that \"\[t\]he business of insurance
\... \[is\] subject to the laws of the \... States which relate to the
regulation \... of such business.\" 15 U.S.C. § 1012(a). The FTC
exception provides that the FTC Act \"shall be applicable to the
business of insurance to the extent that such business is not regulated
by State law.\" 15 U.S.C. § 1012(b). Paragraphs (a) and (b) are thus
mirror images: the FTC Act applies unless the insurance business at
issue is already regulated by the State as contemplated in paragraph
(a). There is no apparent basis for the Commissioner\'s contention that
the language of paragraph (b), \"regulated by State law,\" means
anything other than the \"laws of the \... States which relate to the
regulation \... of \[insurance\],\" described in paragraph (a). The
Court\'s holding in [Travelers]{.underline} that the McCarran-Ferguson
Act applies only to regulation of activity within the State thus applies
to both the scope of the States\' powers under paragraph (a) and to the
scope of the FTC exception under paragraph (b).

The conclusion that the McCarran-Ferguson Act does not shield
extraterritorial regulation applies with particular force here, where
the State law has a discriminatory regulatory effect in foreign
countries. Congress\'s purpose in enacting McCarran-Ferguson was to
restore to the States the authority over insurance that they had been
thought to possess prior to the Supreme Court\'s decision in [United
States]{.underline} v. [South-Eastern Underwriters Assn.]{.underline},
322 U.S. 533 (1944), which held that insurance contracts did constitute
interstate commerce. [See]{.underline} [Travelers]{.underline}, 362 U.S.
at 299-302. It was \"not the intention of Congress \... to clothe the
States with any power to regulate or tax the business of insurance
beyond that which they had been held to possess prior to the decision\"
in [South-Eastern Underwriters]{.underline}. [Travelers]{.underline},
362 U.S. at 300 (quoting H.R. Rep. No. 143, 79th Cong., 1st Sess., 3).
Moreover, the rationale behind McCarran-Ferguson, \"that the States were
in close proximity to the people affected by the insurance business and,
therefore, were in a better position to regulate that business than the
Federal Government,\" [id.]{.underline} at 302, does not apply where a
State\'s actions have regulatory effect in foreign countries or when a
State\'s action interferes with the conduct of foreign affairs.
[See]{.underline} [Stephens]{.underline} v. [National Distillers and
Chemical Corp.]{.underline}, 69 F.3d 1226, 1232-33 (2d Cir. 1996)
(holding that the preemptive scope of the FSIA was not limited by the
McCarran-Ferguson Act because the foreign policy concerns reflected in
the FSIA were necessarily national in scope). [See also]{.underline} [In
re Insurance Antitrust Litigation]{.underline}, 938 F.2d 919, 928 (9th
Cir. 1991) (if extraterritorial regulation of insurance within the
United States is forbidden, then, \"\[a\] fortiori, regulation by the
fifty states of foreign reinsurers is beyond the jurisdiction of the
states\"), [aff\'d in part, rev\'d in part]{.underline}, [Hartford Fire
Ins. Co.]{.underline} v. [California]{.underline}, 509 U.S. 764 (1993).

**II. PLAINTIFFS\' CLAIMS RAISE SUBSTANTIAL QUESTIONS AS TO WHETHER
CALIFORNIA\'S HOLOCAUST-ERA INSURANCE STATUTES INTRUDE UPON THE FEDERAL
GOVERNMENT\'S EXCLUSIVE RESPONSIBILITY AND AUTHORITY TO CONDUCT THE
NATION\'S FOREIGN AFFAIRS.**

The Supreme Court has long recognized that, in addition to

the Constitution\'s specific grant to the Federal Government of the
power to regulate foreign commerce, the Constitution more generally
entrusts the Federal Government \"with full and exclusive responsibility
for the conduct of affairs with foreign sovereignties.\"
[Hines]{.underline} v. [Davidowitz]{.underline}, 312 U.S. 52, 63 (1941).
Contrary to the Commissioner\'s suggestion, the Constitution does not
\"allocate\[\] responsibility for certain aspects of foreign affairs\"
to the States. Appellant\'s Opening Brief at 18. As the Supreme Court
has made clear, \"\[p\]ower over external affairs is not shared by the
States; it is vested in the national government exclusively.\" [United
States]{.underline} v. [Pink]{.underline}, 315 U.S. 203, 233 (1942).

The Framers of the Constitution recognized that the actions of a State
could embroil the entire nation in conflict with another country.
Recognition that \"\[t\]he Union will undoubtedly be answerable to
foreign powers for the conduct of its members,\" caused the Framers to
propose a Constitution that provided for a single national voice over
foreign political and commercial affairs, in order to preserve \"\[t\]he
peace of the whole.\" *The Federalist No. 80*, at 476 (Alexander
Hamilton); [see also]{.underline} *The Federalist No. 42*, at 264 (James
Madison) (\"If we are to be one nation in any respect, it clearly ought
to be in respect to other nations.\").

In light of the \"imperative\[\] \... that federal power in the field
affecting foreign relations be left entirely free from local
interference,\" [Hines]{.underline}, 312 U.S. at 63, the Supreme Court
has held that state \"regulations must give way if they impair the
effective exercise of the Nation\'s foreign policy,\"
[Zschernig]{.underline} v. [Miller]{.underline}, 389 U.S. 429, 440
(1968). The question is [not]{.underline} simply whether federal law has
affirmatively and explicitly preempted a state regulation: a state
policy that disturbs foreign relations must give way \"even in \[the\]
absence of a treaty\" or federal statute. [Id.]{.underline} at 441. Nor
is it a question of \"balanc\[ing\] the nation\'s interest in a uniform
foreign policy against the particular interests of a particular state\";
rather, \"there is a threshold level of involvement in and impact on
foreign affairs which the states may not exceed.\" [National Foreign
Trade Council]{.underline} v. [Natsios]{.underline}, 181 F.3d 38, 52
(1st Cir. 1999), [aff\'d]{.underline}, 120 S. Ct. 2288, 2296 (2000).

[Zschernig]{.underline} is illustrative. In that case, the Court struck
down an Oregon probate law that prevented the distribution of estates to
foreign heirs if, under foreign law, the proceeds of the estate were
subject to confiscation. 389 U.S. at 431. The Court noted that
application of the statute required state courts to engage in \"minute
inquiries concerning the actual administration of foreign law\" and to
judge the credibility and good faith of foreign counsels,
[id.]{.underline} at 435, with outcomes turning upon \"foreign policy
attitudes\" regarding the cold war, [id.]{.underline} at 437.
Accordingly, the Court concluded that the statute had \"a direct impact
upon foreign relations and may well adversely affect the power of the
central government to deal with those problems.\" [Id]{.underline}. at
441. The Court held that this \"kind of state involvement in foreign
affairs and international relations --- matters which the Constitution
entrusts solely to the Federal Government\" --- was \"forbidden state
activity.\" [Id.]{.underline} at 436.

As we have discussed in relation to the \"one voice\" doctrine of the
Commerce Clause, [see]{.underline} Section I.B., [supra]{.underline},
the California statute impairs the ability of the United States to
conduct the nation\'s foreign policy. The HVIRA was designed as an
exercise of foreign policy \"to encourage the development of a
resolution to these issues through the international process or through
direct action by the State of California.\" Cal. Ins. Code § 13801. By
its structure it places pressure on European insurers to report to the
State of California, rather than through internationally agreed
channels. Unsurprisingly, the problems caused by the statute are not
merely theoretical. Indeed, as noted above, the governments of both
Germany and Switzerland have protested to the State Department
California\'s attempt to regulate the conduct of German and Swiss
insurers with respect to insurance policies written in those countries.
[See]{.underline} [Natsios]{.underline}, 181 F.3d at 55 (\"foreign
government views, although not dispositive, are one factor to consider
in determining whether a law impermissibly interferes with the Federal
Government\'s foreign affairs power\").

The purpose and impact of the statute are highlighted when the
California regulatory scheme is viewed as a whole. For example,
California allows the state Insurance Commissioner to waive the
suspension if \"the insurer has participated in good faith in an
international commission on Holocaust survivor insurance claims, and
\... the commission is making meaningful and expeditious progress toward
paying claims to survivors and righting the historic wrong done to
Holocaust victims.\" Cal. Ins. Code § 790.15(e). In other words, the
statute calls upon the Commissioner to make \"minute inquiries\" into
the pace and practices of the international Holocaust commissions that
the Federal Government seeks to foster. [Zschernig]{.underline}, 389
U.S. at 435 The remedy for suspensions thus intrudes into foreign policy
as much as the sanctions regime itself.

**CONCLUSION**

For the foregoing reasons, the Court should affirm the order of the
district court enjoining the Commissioner of Insurance from enforcing
the HVIRA.

Respectfully submitted,

DAVID W. OGDEN

[Assistant Attorney General]{.underline}

PAUL L. SEAVE

[United States Attorney]{.underline}

DAVID J. ANDERSON

DAVID O. BUCHHOLZ

[Attorneys]{.underline}

[Federal Programs Branch]{.underline}

[Civil Division]{.underline}

MARK B. STERN

\(202\) 514-5089

DOUGLAS HALLWARD-DRIEMEIER

\(202\) 514-5735

[Attorneys, Appellate Staff]{.underline}

[Civil Division, Room 9113]{.underline}

[Department of Justice]{.underline}

[Washington, D.C. 20530-0001]{.underline}

Attorneys for the United States

[^1]: ^?^ A number of other participants were also involved in the
    negotiations, including the State of Israel, the governments of five
    Central and East European countries (Belarus, the Czech Republic,
    Poland, Russia, and Ukraine), reconciliation foundations from these
    countries, and the Conference on Jewish Material Claims Against
    Germany, a non-governmental organization created to negotiate for
    and administer compensation for Nazi crimes to Jewish people around
    the world.

[^2]: ^?^ The United States has observer status in ICHEIC, together with
    several European nations, including Germany, France, Italy, Poland,
    and the Czech Republic.

[^3]: ^?^ Deputy Secretary Eizenstat has likewise stated that the \"U.S.
    Government has supported the International Commission \... since it
    began, and we believe it should be considered the exclusive remedy
    for resolving insurance claims from the World War II era.\"
    Statement before the House Banking Committee, Feb. 9, 2000 (ER
    1905).

[^4]: ^?^ The district court, which rendered its decision before the
    Agreement was finalized, also overestimated the Agreement\'s
    ultimate legal effect when it predicted that the Agreement would
    make the Foundation an \"exclusive remedy\" as a matter of U.S. law.
    Memorandum and Order: Preliminary Injunction at 17.

[^5]: ^?^ [See]{.underline} Assembly Bill No. 600 (reproduced in the
    Addendum to Brief of Appellees American Insurance Association and
    American Reinsurance Co. at 33-34) (noting interrelationship of the
    HVIRA and the 1998 license suspension provisions, Cal. Ins. Code §
    790.15, and jurisdiction provisions, Cal. Code Civ. Pro. § 354.5).

[^6]: ^?^ [See]{.underline}, [e.g.]{.underline}, Gerling Br. at 20-22;
    AIA Br. at 49. The United States has not independently verified the
    accuracy of plaintiffs\' representations.

[^7]: ^?^ The Commissioner contends, relying on [Barclays Bank
    PLC]{.underline} v. [Franchise Tax Board]{.underline}, 512 U.S. 298
    (1994), that the Executive Branch\'s voice is irrelevant to the
    \"one voice\" inquiry. [See]{.underline} Appellant\'s Opening Brief
    at 27-28. The Supreme Court rejected just such a misreading of the
    [Barclays]{.underline} opinion in [Crosby]{.underline} v. [National
    Foreign Trade Council]{.underline}, 120 S. Ct. 2288 (2000). The
    [Barclays]{.underline} opinion merely illustrates that a clearly
    expressed congressional intent will prevail over Executive
    statements expressing a contrary opinion, [see]{.underline}
    [Crosby]{.underline}, 120 S. Ct. at 2300-01. In
    [Crosby]{.underline}, the Court reaffirmed the relevance of the
    Executive\'s voice when the President is exercising his
    constitutional responsibility \"to speak for the Nation with one
    voice in dealing with other governments.\" [Id.]{.underline} at
    2298, 2301.

[^8]: ^?^ Under the FTC exception, the FTC can regulate insurers \"to
    the extent that such business is not regulated by State law.\" 15
    U.S.C. § 1012(b).