Court Opinion

ID: 2645227
Source: CourtListenerOpinion
Date Created: 2013-12-10 01:00:58.835109+00
Date Added: 2024-06-11T09:04:19.095539
License: Public Domain

FILED
                            NOT FOR PUBLICATION                               DEC 09 2013

                                                                          MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

VAROUJAN DEIRMENJIAN; ARIS                       No. 10-56359
AGHVAZARIAN; ROBERT
DABAGHIAN; MARGUERID                             D.C. No. 2:06-cv-00774-MMM-
JEREDJIAN; KATIA KERMOYAN;                       RC
PAYLIG KERMOYAN,

              Plaintiffs,                        MEMORANDUM*

  And

KHACHIK BERIAN, on Behalf of
Himself and all Others Similarly Situated,

              Plaintiff - Appellant,

  v.

DEUTSCHE BANK AG; DRESDNER
BANK AG,

              Defendants - Appellees.

                   Appeal from the United States District Court
                      for the Central District of California
                  Margaret M. Morrow, District Judge, Presiding

                     Argued and Submitted November 5, 2013

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
                                 Pasadena, California

Before: McKEOWN, GOULD, and BYBEE, Circuit Judges.

       Khachik Berian and a putative class of California residents of Armenian

descent (collectively, “Berian”) appeal the district court’s grant of summary

judgment in favor of Deutsche Bank AG and Dresdner Bank AG (collectively, “the

Banks”). Berian alleges that the Banks withheld money from Armenian account-

holders following the early twentieth-century Armenian Genocide. On appeal,

Berian first argues that the district court erred in finding that California choice-of-

law principles required the application of Turkey’s statute of repose, which barred

the suit. Second, he argues that the district court erred in denying class certification

based on its finding that the putative class was not ascertainable. A third ground of

appeal—that the district court erred in holding that California Code of Civil

Procedure § 354.45, which extended the statute of limitations period for Armenian

Genocide claims, was preempted by federal law and the foreign affairs

doctrine—was mooted by our decision in Movsesian v. Victoria Versicherung AG,

670 F.3d 1067 (9th Cir. 2012) (en banc) (striking down § 354.45’s sister statute §

354.4 based on field preemption). For the reasons discussed below, we AFFIRM

the grant of summary judgment. Accordingly, we do not reach the question of class

certification.

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      The evidence presented to the district court describes the essential facts of

the Armenian Genocide. In the early twentieth-century, the government of the

Ottoman Empire, led by a group known as the “Young Turks,” sought to remove

Armenians from the empire. After the start of World War I, the Young Turks

began a systematic campaign of deportation and killing of ethnic Armenians,

resulting in between 1.5 and 2 million deaths, in what is now called the Armenian

Genocide. Berian, the descendent of an Armenian named Hatchik Berian who fled

Turkey for Greece during the Genocide, alleges that the Banks “concealed and

prevented the recovery of assets which were deposited in accounts with [them] by

Armenians prior to World War I and the Armenian Genocide.” Berian brought a

number of state law claims—for breach of fiduciary duty, unjust enrichment, and

negligence, among others—against the Banks in state court. The Banks removed to

federal court under the Class Action Fairness Act.

      Berian’s claims raise intertwined questions regarding the proper statute of

limitations and choice of law. See Huynh v. Chase Manhattan Bank, 465 F.3d 992,

996 (9th Cir. 2006). When determining which country’s statute of limitations

applies, we first “must decide what choice-of-law rule governs the selection of the

statute of limitations. Second, [we] must apply that rule to determine which

jurisdiction’s limitations law applies. Third, and finally, [we must] determine

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whether plaintiffs’ claims fall within the relevant limitations period.” Id. at 997

(quoting Cruz v. United States, 387 F. Supp. 2d 1057, 1070 (N.D. Cal. 2005)).

A.    Choice-of-Law Rule

      Since this action was removed to federal court on the basis of diversity

jurisdiction, California’s choice-of-law rules apply. Sims Snowboards, Inc. v.

Kelly, 863 F.2d 643, 645 (9th Cir. 1988).

B.    Governmental Interest Analysis

      When deciding choice-of-law questions, California applies a three-part

governmental interest test. See McCann v. Foster Wheeler LLC, 225 P.3d 516, 524

(Cal. 2010).

      First, the court determines whether the relevant law of each of the
      potentially affected jurisdictions with regard to the particular issue in
      question is the same or different. Second, if there is a difference, the
      court examines each jurisdiction’s interest in the application of its
      own law under the circumstances of the particular case to determine
      whether a true conflict exists. Third, if the court finds that there is a
      true conflict, it carefully evaluates and compares the nature and
      strength of the interest of each jurisdiction in the application of its
      own law “to determine which state’s interest would be more impaired
      if its policy were subordinated to the policy of the other state” and
      then ultimately applies “the law of the state whose interest would be
      more impaired if its law were not applied.”

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Id. at 527 (quoting Kearney v. Salomon Smith Barney, Inc., 137 P.3d 914, 922

(Cal. 2006)) (internal citations omitted).1

      With regard to the first step, under California Code of Civil Procedure § 348,

which establishes that “there is no limitation” on “actions brought to recover

money or other property deposited with any bank,” Berian’s claims would likely

not be time-barred.2 Under Turkish law, according to undisputed expert testimony

before the district court, claims against a bank are absolutely barred ten years from

the date of the last request, transaction, or written instruction by the owner of the

account, regardless of when the plaintiff discovered the injury or was able to bring

      1
       Although McCann revolved around the choice of law of California and
Oklahoma, the governmental interest analysis is the same when the inquiry
involves a foreign country. See Chang v. Baxter Healthcare Corp., 599 F.3d 728,
734 (7th Cir. 2010) (analyzing governmental interests between California and
Taiwan).
      2
        While California’s borrowing statute, California Code of Civil Procedure §
361, limits § 348 where, as here, the circumstances giving rise to the cause of
action occurred outside of California, § 361 “cannot properly be interpreted to
compel application of the California statute of limitations without consideration of
California’s generally applicable choice-of-law principles.” McCann, 225 P.3d at
526–27 (emphasis in original).

                                              5
suit.3 Accordingly, California law and Turkish law are at odds at step one of the

governmental interest analysis.

      At step two of the governmental interests analysis, the court “examines each

jurisdiction’s interest in the application of its own law under the circumstances of

the particular case to determine whether a true conflict exists.” McCann, 225 P.3d

at 527. The focus of the inquiry is whether tension exists between the two

jurisdictions’ interests: “Only if each of the states involved has a legitimate but

conflicting interest in applying its own law will we be confronted with a true

conflicts case.” Offshore Rental Co. v. Cont’l Oil Co., 583 P.2d 721, 725 (Cal.

1978) (internal quotation marks and citation omitted), holding modified by I. J.

Weinrot & Son, Inc. v. Jackson, 708 P.2d 682 (Cal. 1985).

      “California has a legitimate interest in having a statutory provision that

affords a remedy for or a benefit to an injured person or business applied when . . .

the injured person or business is a California resident or business, even when the

injury-producing conduct occurs outside California.” McCann, 225 P.3d at 532. On

the other hand, Turkey has a legitimate interest in limiting the liability of

      3
         Turkey’s law is most accurately considered a statute of repose and not a
statute of limitations, since the former “cuts off a right of action after a specified
period of time, irrespective of accrual or even notice that a legal right has been
invaded.” McCann, 225 P.3d at 521 n.2 (quoting Giest v. Sequoia Ventures, Inc.,
83 Cal. App. 4th 300, 305 (2000)).

                                           6
corporations that conduct business within its borders. Id. at 530 (recognizing that a

state ordinarily has an interest in applying a law “limiting liability for commercial

activity” as fair treatment to and an appropriate incentive for “out-of-state

companies that conduct business in the state, as well as to businesses incorporated

or headquartered within the state”); see Offshore, 583 P.2d at 725 (finding that

interest of Louisiana in applying law that would bar recovery for Californian

employee injured there served “Louisiana’s policy of avoidance of extended

financial hardship to the negligent defendant”); Bernhard v. Harrah’s Club, 546

P.2d 719, 722 (Cal. 1976) (noting that two states’ differing interests regarding civil

liability of tavern keepers were “legitimate but conflicting”); Cable v. Sahara

Tahoe Corp., 93 Cal. App. 3d 384, 392 (1979) (concluding that a state’s interest in

protecting in-state tavern keepers from “ruinous exposure” to litigation brought by

out-of-state plaintiffs was legitimate).

      Accordingly, California’s and Turkey’s interests are both legitimate and

conflicting at step two of the governmental interest analysis.

      At the third and final step of the governmental interest analysis, the court

“carefully evaluates and compares the nature and strength of the interest of each

jurisdiction . . . to determine which state’s interest would be more impaired if its

policy were subordinated . . . and then ultimately applies the law of the state whose

                                           7
interest would be more impaired if its law were not applied.” McCann, 225 P.3d at

527 (quoting Kearney, 137 P.3d at 914) (internal quotation marks and citations

omitted). Our task at step three “is not to determine whether the [foreign state] rule

or the California rule is the better or worthier rule, but rather to decide—in light of

the legal question at issue and the relevant state interests at stake—which

jurisdiction should be allocated the predominating lawmaking power under the

circumstances of the present case.” Id. at 534. This is “essentially a process of

allocating respective spheres of lawmaking influence.” Offshore, 583 P.2d at 726

(citation omitted).

      We have held that “California does not have a substantial interest” in cases

where California residents seek the return of bank deposits from foreign banks

when those residents made such deposits while living overseas and later moved to

California. Huynh, 465 F.3d at 1002.

      In contrast, California “continue[s] to recognize that a jurisdiction ordinarily

has ‘the predominant interest’ in regulating conduct that occurs within its borders.”

McCann, 225 P.3d at 534 (internal citations omitted); see also Castro v. Budget

Rent-A-Car Sys., Inc., 154 Cal. App. 4th 1162, 1182 (2007) (holding Alabama’s

interests predominant over California’s where auto accident occurred in Alabama,

even though California resident victim could be financial burden on California);

                                           8
Hernandez v. Burger, 102 Cal. App. 3d 795, 802 (1980) (“[W]ith respect to

regulating or affecting conduct within its borders, the place of the wrong has the

predominant interest.”).

      In light of the longstanding deference courts show to foreign states to

regulate activities therein, we agree with the district court that Turkey’s interests in

applying its laws to conduct that occurred within its borders, in dissuading forum

shopping, and in regulating suits against companies doing business there

predominate over California’s interests. See Reich v. Purcell, 432 P.2d 727, 730

(Cal. 1967) (“[The foreign state where the harm occurred] is concerned with

conduct within her borders and as to such conduct she has the predominant interest

of the states involved.”); Cable, 93 Cal. App. 3d at 394 (“The state with the

‘predominant’ interest in controlling conduct normally is the state in which such

conduct occurs and is most likely to cause injury.”). Under this analysis, we make

no judgment as to whether Turkey’s policies are “worthier” or “better” than

California’s, only that Turkey’s interest “would be more impaired if its law were

not applied.” McCann, P.3d at 533, 537. Accordingly, we conclude that Turkey’s

statute of repose governs.

C.    Application

                                           9
      As previously noted, under Turkish law, Berian’s claims had to be brought

within ten years of the date of the last request, transaction, or written instruction by

the owner of the account, regardless of when the plaintiff discovered the injury or

was able to bring suit. According to the evidence before the district court, that date

would have been by November 1926. Having failed to provide evidence that he did

so, Berian’s claims are time-barred.

      It is unnecessary to reach the question of class certification.

      AFFIRMED.

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