## Facts

- California enacted the Holocaust Victim Insurance Relief Act (HVIRA), requiring insurers doing business in California that had sold insurance in Europe (1920–1945) to disclose information about those policies, including policyholder names and policy status.
- HVIRA authorized significant enforcement pressure, including the possibility of suspending an insurer’s ability to operate in California for noncompliance.
- Holocaust-era restitution efforts led the United States to pursue diplomatic resolutions, including the German Foundation Agreement, to channel claims into an international compensation mechanism.
- Under the German Foundation Agreement, Germany and German companies funded a foundation intended to serve as the exclusive forum and remedy for covered Nazi-era claims, and the President committed to support that approach in U.S. courts and to seek cooperation from state and local governments.
- For Holocaust-era insurance claims, the federal approach contemplated coordination with the International Commission on Holocaust Era Insurance Claims (ICHEIC), a voluntary process for obtaining information and resolving claims.
- Insurers and trade associations sued California’s Insurance Commissioner, seeking to enjoin HVIRA as an unconstitutional intrusion into the national government’s foreign-affairs authority.
- The federal district court enjoined enforcement; the Ninth Circuit reversed; the Supreme Court granted review.

## Issues

1. Whether HVIRA is preempted under the Supremacy Clause because it conflicts with the federal government’s foreign policy regarding Holocaust-era insurance claims.
2. Whether executive agreements and presidential foreign-policy commitments may preempt state law absent a specific conflicting federal statute or treaty.
3. Whether a state disclosure regime regulating insurers can stand when the national government has adopted a different, internationally negotiated method for addressing the same subject.

## Decision

- The Supreme Court reversed the Ninth Circuit in a 5–4 decision (Justice Souter for the Court).
- The Court held HVIRA preempted because it interfered with the President’s conduct of foreign policy and conflicted with the federal government’s chosen approach for resolving Holocaust-era insurance claims.
- The Court concluded that the relevant executive agreements and articulated federal policy favoring the Foundation/ICHEIC mechanisms were sufficient to displace inconsistent state law.
- The dissent would have upheld HVIRA, reasoning that federal agreements did not directly address disclosure and that insurance regulation is traditionally a state function.

## Legal Principles

- State law is preempted when it conflicts with the national government’s foreign policy, even without an express preemptive federal statute.
- The Constitution assigns primary responsibility for foreign relations to the national government; state measures with more than incidental foreign-affairs effects are subject to limitation when they intrude on that domain.
- Executive agreements and clear presidential foreign-policy commitments can have preemptive force where they reflect a deliberate national policy and a state law creates a direct conflict with that policy.
- A state may not use regulatory sanctions to pressure foreign actors in a way that frustrates a federally negotiated, internationally coordinated claims-resolution mechanism.

## Conclusion

The Court invalidated California’s HVIRA because its mandatory disclosure scheme, backed by severe sanctions, conflicted with the federal government’s diplomatically negotiated strategy for Holocaust-era claims and therefore was preempted by the national foreign-affairs power as exercised through executive agreements and presidential policy.


Am. Ins. Ass’n v. Garamendi, 539 U.S. 396 (2003)