TOP U.S. COURT VOIDS STATE HOLOCAUST LAW.

Byline: Lisa Friedman Washington Bureau

WASHINGTON - Nearly 6,000 Californians who hoped a state law would help them collect Holocaust-era insurance policies lost their battle Monday at the nation's highest court.

In a 5-4 decision, the Supreme Court struck down California's Holocaust Victim Insurance Relief Act of 1999. The law required companies that sold pre-World War II insurance policies to reveal their records or be barred from doing business in the state.

The court, siding with the Bush administration, ruled that the law ``compromises the president's very capacity to speak for the nation with one voice'' in international affairs, as Justice David Souter wrote for the majority.

``The issues remaining from the Holocaust are matters for the United States government, not individual states,'' said Craig Berrington, senior vice president for the American Insurance Association, which brought the lawsuit against California.

U.S. Justice Department officials declined to comment on the ruling.

Holocaust survivors and activists assailed the decision, saying it snatched away an important tool for righting wrongs and gave insurance companies the green light to stonewall aging and dying Holocaust survivors.

``This is a devastating day, emotionally, for the victims of the Holocaust,'' said Rabbi Abraham Cooper, associate dean of the Simon Wiesenthal Center in Los Angeles.

Despite the loss, advocates said they plan to lobby Congress to pass a federal version of the California law sponsored by Rep. Henry Waxman, D-Los Angeles. Some said they are exploring boycott possibilities against American insurance firms affiliated with European companies that refuse to reveal the names of Holocaust-era policyholders.

``We have a free market, and we can do business with anyone we want,'' said Dr. Morry Waksberg of Van Nuys, who helped pass the California law as leader of Second Generation, a group of children of Holocaust survivors. ``What makes sense is simply to do business with the righteous.''

California's law grew out of a frustration among Holocaust survivors, the youngest of whom are in their late 60s, with what many saw as deliberate foot-dragging by European insurance companies in acknowledging and fulfilling the long-dormant policies.

An estimated 5,600 survivors live in California, more than in any other U.S. state except New York, according to the California Department of Insurance.

In many cases, survivors knew there were family policies but - being children before the outbreak of World War II - were unaware which company held the policies or how much they were worth. Often, survivors have no knowledge of policies and are dependent on insurers to disclose them.

``As one survivor told me, 'Hitler didn't let us keep our books and records,''' said David A. Lash, immediate past president of Bet Tzedek Legal Services in Los Angeles, which handles Holocaust compensation.

The California law required insurers to retrieve, compile and disclose extensive information about every insurance policy sold in Europe from 1920 to 1945 as a way to help provide for recovery of lost insurance claims.

Of the ruling's impact, Lash said, ``It's a tragic, sad deprivation of family information, and it's going to be that much harder to assert claims.''

Roman Rakover, 82, of Calabasas said he knows very well that his father held a life insurance policy with Assicurazioni Generali because he was the one who took the premium payment to the broker in Krakow, Poland, every three months.

Rakover was serving in the Polish army in 1939 when he was captured and spent the next several years in a German labor camp making ammunition. His father fled east, was taken prisoner by the Soviets and died in Siberia.

Rakover, now a retired mechanical engineer, said he has been battling with Italy's largest insurance firm since 1995. The justices' decision Monday sharply disappointed Rakover.

``I'm surprised that they don't see the situation - how the companies are treating survivors. What can be done for me now? We have to go to court, even though they will never pay. Unfortunately, God will not give us the years to live. We will never win. This is my opinion, and I am not a pessimist.''

But Dale Franklin, spokesman for the International Commission on Holocaust-Era Insurance Claims, which encourages insurance firms to acknowledge and pay long-dormant policies voluntarily, said the court's ruling was a good one.

Had the California law held, he said, countries might have been less amenable to working with the international process, thereby slowing claim payments.

``We're glad it went this way,'' he said. ``We feel this is a better way to address Holocaust-era insurance claims.''

In the majority ruling, Souter said there was enough conflict between the state law and the president's foreign policy to allow the federal government's position to take precedence over California law.

``The basic fact is that California seeks to use an iron fist where the president has consistently chosen kid gloves,'' Souter wrote in the 31-page opinion.

He was joined by Chief Justice William H. Rhenquist and Justices Sandra Day O'Connor, Anthony M. Kennedy and Stephen Breyer. Justices Ruth Bader Ginsburg, John Paul Stevens, Antonin Scalia and Clarence Thomas dissented.

Michael Bazyler, author of ``Holocaust Justice: The Battle for Restitution in America's Courts,'' said he thinks the court sent a ``sad message.''

``The American legal system let survivors down today. And it's unfortunate because the American legal system has been an important factor in bringing a measure of justice to Holocaust survivors,'' said Bazyler, a professor at Whittier Law School in Costa Mesa.

Waksberg said he does not hold out much hope that survivors will ever collect on insurance policies that are rightfully theirs.

``They will go to their deaths with the sense that this injustice wasn't remedied. That's a much more powerful loss than any amount of money.''

Lisa Friedman, [phone]

lisa.friedman(at)langnews.com