[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
OCTOBER 02, 2001
THOMAS K. KAHN
No. 00-16542 CLERK
________________________
D. C. Docket No. 99-00444-CV-4-RH
GERLING GLOBAL REINSURANCE
CORPORATION OF AMERICA, d.b.a.
GERLING GLOBAL REINSURANCE
CORPORATION-U.S. BRANCH, , GERLING
GLOBAL LIFE REINSURANCE COMPANY, etc., et al.,
Plaintiffs-Appellees,
versus
TOM GALLAGHER,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Northern District of Florida
_________________________
(October 2, 2001)
Before CARNES and MARCUS, Circuit Judges, and PROPST*, District Judge.
*
Honorable Robert B. Propst, U.S. District Judge for the Northern District of Alabama,
sitting by designation.
MARCUS, Circuit Judge:
Defendant Tom Gallagher (the “Commissioner”), in his capacity as the
Insurance Commissioner of the State of Florida, appeals the district court’s entry of
summary judgment against him on the Plaintiffs’ challenge to the constitutionality
of Florida’s Holocaust Victims Insurance Act, Fla. Stat. § 626.9543 (the “Act”).
Plaintiffs -- several insurers operating in Florida with corporate affiliations to
German insurers who may have issued policies to Holocaust victims prior to 1945 -
- brought this suit alleging that the Act violates the Due Process Clause and other
provisions of the U.S. Constitution. The district court agreed that the Act violates
Due Process because it effectively regulates a subject and transactions that have an
insufficient connection with Florida. The court therefore granted summary
judgment in Plaintiffs’ favor, denied the Commissioner’s cross-motion for
summary judgment, and entered a narrow injunction relieving the Plaintiffs of any
consequences stemming from their refusal to comply with certain disclosure
obligations created by the Act and imposed via subpoenas. The Commissioner
now appeals, disputing the district court’s legal analysis. Because we agree that
this Act, as applied to these Plaintiffs on these facts, violates Due Process, we
affirm the district court, and uphold the limited remedy provided by that court. We
do not address the Plaintiffs’ other objections to the Act, and do not decide whether
2
other provisions of the Florida Insurance Code may in some circumstances
authorize this kind of inquiry into the affairs of an insurer’s affiliate.
I.
This action concerns Florida’s Holocaust Victims Insurance Act, which took
effect in 1998. The sole explicit purpose of the Act is to ensure that “potential and
actual insurance claims of Holocaust victims and their heirs and beneficiaries be
expeditiously identified and properly paid and that Holocaust victims and their
families receive appropriate assistance in the filing and payment of their rightful
claims.” Fla. Stat. § 626.9543(2). To that end, the Act includes a number of
provisions affecting the rights of German insurers and their German insureds under
policies issued in Germany between 1920 and 1945.1
The Act contains two key sets of provisions. The first set (the “reporting
provisions”) imposes a reporting requirement upon insurers doing business in
Florida (“Florida insurers”). Specifically,
[a]ny insurer doing business in this state shall have an
affirmative duty to ascertain to the extent possible and report to the
department within 90 days after the effective date of this section and
annually thereafter all efforts made and results of such efforts to
ascertain:
1
The Act does not limit its scope to German insurers or policies. It applies to any
insurers that issued policies to Holocaust victims. For ease of reference, insurance policies
issued between 1920 and 1945 to Holocaust victims shall be identified as “Holocaust-era
policies.”
3
(a) Any legal relationship with an international insurer that
issued an insurance policy to a Holocaust victim between 1920 and
1945, inclusive.
(b) The number and total value of such policies.
(c) Any claim filed by a Holocaust victim, his or her
beneficiary, heir, or descendant that has been paid, denied payment, or
is pending.
(d) Attempts made by the insurer to locate the beneficiaries of
any such policies for which no claim of benefits has been made.
(e) An explanation of any denial or pending payment of a claim
to a Holocaust victim, his or her beneficiary, heir, or descendant.
Id. § 626.9543(7). As the text explains, a Florida insurer has a duty to report not
only regarding its own Holocaust-era policies, but also regarding the policies of
companies with which it has or had any “legal relationship.” The statute defines
“legal relationship” as “any parent, subsidiary, or affiliated company with an
insurer doing business in this state.” Id. § 626.9543(3).2 Violation of the reporting
requirement, or any other requirement imposed by the Act, subjects an insurer to
“an administrative penalty of $1,000 per day for each day such violation
continues.” Id. § 626.9543(9).
2
This definition is concededly not limited to the Florida insurer’s corporate “alter egos.”
Cf. The Moorings at Aberdeen Homeowners Ass’n v. UDC Homes, Inc., 673 So. 2d 981, 982
(Fla. Dist. Ct. App. 1996) (alter ego relationship alleged where one corporation “exerted its
control over” a related “sham” corporation and “caused the separate corporate identity of [the
sham corporation] to be ignored”).
4
The second set of provisions (the “claims recovery provisions”), as
interpreted by the Commissioner in an administrative rule, requires Florida insurers
to pay all valid Holocaust-era policy claims asserted against them as well as all
valid claims asserted against any of their parents, subsidiaries, or corporate
affiliates. Fla. Stat. § 626.9543(5); Fla. Admin. Code 4-137.010(6). The Act
requires payment of all claims established under “a reasonable, not unduly
restrictive, standard of proof.” Fla. Stat. § 626.9543(5)(b). The Act also declares
inapplicable to Holocaust-era policy claims any foreign statute of limitations, and
creates a new ten-year statute of limitations for the presentation of these claims.
Id. § 626.9543(6).
In addition, the Act creates a private cause of action for individuals harmed
by a violation of the Act, and authorizes the recovery of treble damages, costs, and
attorney’s fees. Id. § 626.9543(10). This provision establishes a remedy for any
person alleging non-payment on a Holocaust-era policy by any insurer doing
business in Florida or by any parent, subsidiary, or corporate affiliate of such an
insurer. Accordingly, a Florida insurer could be liable for treble damages,
attorney’s fees, and costs based upon the non-payment of a Holocaust-era policy
by a separate foreign company that it does not control, but with which it happens to
be affiliated.
5
II.
Plaintiffs are six related insurers licensed to do business in Florida: Gerling
Global Reinsurance Corp. of America f/k/a Constitution Reinsurance, a New York
company; Gerling Global Reinsurance -- U.S. Branch, a German company; Gerling
Global Life Reinsurance, a California company; Gerling Global Life Insurance, a
Canadian company; Gerling America Insurance, a New York company; and
Constitution Insurance f/k/a Gerling Global, a New York company. There is no
suggestion that any Plaintiff issued any policies to Holocaust victims prior to 1945;
only one of the Plaintiffs was in existence, and that insurer did not become
affiliated with the Gerling group until much later.
Although not corporate alter egos and apparently not direct parents or
subsidiaries, the six Plaintiffs are affiliates of two German insurers,
Gerling-Konzern Lebensversicherungs-AG (“GKL”) and Gerling-Konzern
Allgemeine Versicherungs-AG (“GKA”), who issued Holocaust-era policies in
Germany. GKL and GKA are German companies based in Cologne; they are not
registered to do business in Florida, they have no offices or employees in the state,
and there is no evidence that these German insurers have any independent contacts
with Florida other than to the extent that some current Holocaust-era policyholders
or their beneficiaries may currently reside in the state. There is no record evidence
6
that the Plaintiffs have possession, custody, or “control” -- in the legal or practical
sense -- over the records or activities of GKL or GKA.
The trigger for this lawsuit was a set of subpoenas sent, under authority of
the Act and the implementing Rule, to five of the Plaintiffs by the Florida
Insurance Commissioner. The subpoenas are expansive, calling upon the Plaintiffs
to produce an array of records regarding any Holocaust-era policies issued not only
by the Plaintiffs themselves, but also by their German affiliates. The Plaintiffs had
previously advised the Florida Department of Insurance that none of them had
issued any policy that was in force in Europe between 1920 and 1945, and that they
could not provide information regarding GKL and GKA because they had no direct
knowledge of the activities of their German affiliates. The Plaintiffs did attach
copies of reports voluntarily supplied by GKL and GKA addressing some of the
matters covered by the Act’s reporting requirement; both GKL and GKA reported
that, to the extent relevant records remain, there is no indication of any unpaid
claims relating to the Holocaust era.
The Commissioner thought those responses inadequate. In the subpoenas,
therefore, he sought a wide range of documents, including copies of policies,
reinsurance contracts, checks, and financial statements, covering essentially all of
the German affiliates’ European transactions during a twenty-five year span early
7
last century. The subpoenas also defined the subpoenaed companies as including
as well “any and all other entities that . . . now have or have in the past had any
organizational, managerial, or operational connection with [them], including but
not limited to as a parent company or as a subsidiary.” The Commissioner then
issued a press release asserting that the subpoenas were issued because the
Plaintiffs had not fully complied with the Act.
Rather than contest the subpoenas, the Plaintiffs filed this lawsuit for
declaratory and injunctive relief. The complaint seeks relief under 42 U.S.C. §
1983 based on the Act’s alleged unconstitutionality. The Plaintiffs eventually
moved for summary judgment in their favor; the Commissioner cross-moved for
summary judgment in his favor.3
3
The parties disagree about whether the Plaintiffs raised an as-applied challenge in their
summary judgment motion. Although there is no question that the Plaintiffs were pursuing an
as-applied challenge in the lawsuit along with a facial challenge, it appears that the Plaintiffs’
summary judgment motion referred only to their facial challenge. Nevertheless, for a variety of
reasons, we will consider the Plaintiffs’ as-applied arguments in resolving this appeal. First, it is
well settled that “[w]hen reviewing a grant of summary judgment, the court of appeals may
affirm if there exists any adequate ground for doing so, regardless of whether it is the one on
which the district court relied.” Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1117 (11th Cir.
1993). Second, the Commissioner himself, by seeking summary judgment in his own right on all
issues raised by the complaint, effectively injected the as-applied issue into the summary
judgment mix. Third, the Plaintiffs’ entitlement to relief on the limited as-applied argument they
have advanced before us is sufficiently clear that no purpose would be served by a remand at this
stage. Finally, the Commissioner cannot persuasively claim any prejudice from considering
Plaintiffs’ as-applied argument now. The Commissioner had every opportunity to request further
discovery before the district court ruled on the summary judgment motions, yet he chose not to
do so. The Commissioner also chose not to contest Plaintiffs’ evidence asserting a lack of
control over the documents sought in the subpoenas. We therefore shall address the Plaintiffs’
as-applied challenge to the Act. Notably, although the district court’s order did not specify
8
In an order dated November 11, 2000, the district court granted the
Plaintiffs’ motion and denied the Commissioner’s cross-motion. 123 F. Supp. 2d
1298 (N.D. Fla. 2000). The court did so on the basis of one of Plaintiffs’ asserted
objections: denial of Due Process. Relying on our opinion in American Charities
for Reasonable Fundraising Regulation, Inc. v. Pinellas County, 221 F.3d 1211
(11th Cir. 2000), the court initially explained that the Act “is subject to review
under the jurisdictional principles of the Due Process Clause and may be enforced
only to the extent consistent with those principles.” 123 F. Supp. 2d at 1302. The
district court then found that the Act reached too far by effectively attempting to
regulate the activities of insurers with no contact with Florida. According to the
court, “[t]he insurance contracts at issue were entered in Germany between German
parties under German law. They addressed German events. Any breach of the
contracts occurred in Germany. The parties to the contracts had no connection
with Florida. The events governed by the contracts had no connection with
Florida. The grounds for exercising jurisdiction over these parties or these events
in Florida are exactly none.” Id.
whether it was considering an as-applied challenge, the limited relief that it fashioned was
consistent with such a challenge.
9
The district court made two other important observations in its opinion.
First, it assumed for purposes of its ruling that the Plaintiffs were subsidiaries of
GKL and GKA; it explained, however, that under well-settled law “the German
parents -- and their German transactions -- are not subject to the jurisdiction of the
State of Florida merely because the subsidiaries do business here.” Id. at 1303
(citing Consolidated Dev. Corp. v. Sherritt, Inc., 216 F.3d 128, 129 (11th Cir.
2000)). The court emphasized that even though the subpoenas were directed
toward the Florida insurers, “it is not plaintiffs’ transactions that the Commissioner
is investigating. The transactions at issue were instead entered solely by German
corporations of which plaintiffs are subsidiaries.” 123 F. Supp. 2d at 1303.
Second, the district court observed that there was no effort by the
Commissioner to justify the Act as necessary to facilitate the Department’s
regulation of the Florida insurers. According to the court:
It is true that in the course of regulating Florida insurers, the
Commissioner can and does properly consider events occurring
elsewhere. Thus, for example, if an insurer that does business in
Florida commits fraud in another state or country, the Commissioner
may properly consider whether that renders the insurer unfit to engage
in the business of insurance in Florida. There has been no assertion,
however, that any plaintiff had anything to do with any Holocaust-era
policies or with any failure to pay claims under any such policies.
Commendably, the Commissioner has made no effort to justify the
Holocaust Victims Insurance Act or his actions thereunder simply as a
means of determining whether plaintiffs themselves or their officers
are fit to engage in the business of insurance in Florida. Rather, the
10
Commissioner has acknowledged, as the Act’s statement of purpose
makes clear, that the ultimate goal is to bring about payment of
amounts due to Holocaust victims and their families. See Transcript
of Summary Judgment Hearing [] (asserting that core of Act is
facilitating access of Florida Holocaust victims to information that
would allow them to perfect claims). And the Commissioner has said
he seeks information regarding amounts due to Florida residents only,
not regarding amounts owed to victims still in Germany or elsewhere,
see id. [], thus making clear that the goal is not simply to address the
current fitness of corporate officers (who presumably would be
equally unfit whether they failed to pay valid claims in Germany,
Florida or elsewhere) but, as the statute expressly states, to facilitate
the payment of claims.
Id. at 1303 n.9.
As relief, the district court directed entry of a judgment in Plaintiffs’ favor
and also issued an injunction. The court’s remedy did not sweep broadly,
providing no express declaratory relief and enjoining the Commissioner only from
taking any action against the Plaintiffs “as a result of their failure to provide
information or evidence to defendant relating to Holocaust-era policies issued by
insurers other than plaintiffs (whether or not such insurers were or are affiliates of
plaintiffs) outside of the State of Florida to insureds who were, at the time of
issuance of the policies, not Florida citizens or residents.” Id. at 1304. In other
words, the district court did not declare the entire Act unconstitutional, and
basically treated Plaintiffs’ argument as simply a narrow as-applied attack on the
reporting provisions to the extent those provisions exceed constitutional limits on
11
Florida’s legislative jurisdiction. The Commissioner has appealed the district
court’s order; the Plaintiffs have not cross-appealed.
III.
There is no dispute about the proper standard of review of the district court’s
order granting Plaintiffs’ motion for summary judgment and denying the
Commissioner’s cross-motion. We review a district court’s grant of summary
judgment de novo, applying the same legal standards used by the district court.
See, e.g., Hilburn v. Murata Elecs. N. Am., Inc., 181 F.3d 1220, 1225 (11th Cir.
1999). Summary judgment is appropriate where “there is no genuine issue as to
any material fact and the moving party is entitled to a judgment as a matter of law.”
Fed. R. Civ. P. 56(c). We “view the evidence and all factual inferences therefrom
in the light most favorable to the party opposing the motion” and “‘all reasonable
doubts about the facts [are] resolved in favor of the non-movant.’” See Burton v.
City of Belle Glade, 178 F.3d 1175, 1187 (11th Cir. 1999) (quoting Clemons v.
Dougherty County, 684 F.2d 1365, 1368-69 (11th Cir. 1982)).
IV.
Plaintiffs contend that the Act is unconstitutional on its face and as applied.
They assert primarily that the Act violates the Due Process Clause of the
Fourteenth Amendment because (1) the Florida Legislature lacked “legislative
12
jurisdiction” to regulate, in effect, the affairs of the Plaintiffs’ German affiliates;
(2) the Act compels the Plaintiffs or their affiliates to violate German law; and (3)
the act is arbitrary and irrational as applied. Plaintiffs also contend that the Act
violates the dormant Commerce Clause by impermissibly regulating out-of-state
commerce; violates Congress’s power to control international commerce and the
national government’s foreign affairs power under Zschernig v. Miller, 389 U.S.
429, 88 S. Ct. 664 (1968); would authorize an unreasonable search and seizure in
violation of the Fourth Amendment; and constitutes a bill of attainder.4 The
Commissioner disputes all of these contentions. In addition, the Commissioner
contends that the validity of the Act’s claims recovery provisions cannot be
addressed in this proceeding because there is no “case or controversy” regarding
the applicability of these provisions to the Plaintiffs and because these provisions
are severable from the Act’s reporting provisions.
The relief ordered by the district court was limited to the Act’s reporting
provisions to the extent they affect these six Plaintiffs. The Plaintiffs have not
4
The United States has intervened on behalf of the Plaintiffs, arguing that the district
court’s ruling should be affirmed because the Act violates the dormant Commerce Clause as well
as the foreign affairs power. The Government particularly emphasizes the disruptive effect that
the Act (in its view) will have on the operation of carefully-crafted international initiatives to
provide insurance benefits to Holocaust victims and their survivors. The Government has not
taken a position on Plaintiffs’ Due Process objections. We do not imply any view on the merits
of the Government’s arguments, because it is unnecessary to consider them.
13
cross-appealed from that limited relief. Accordingly, because the relief ordered by
the district court concerned only the reporting requirements, and in light of our
holding in this opinion, we have no occasion to consider the Act’s claims recovery
provisions, and therefore do not offer any view on the constitutionality of those
provisions, whether there currently exists a case or controversy regarding those
provisions, or whether those provisions are severable from the reporting
provisions. The only issue before us, and the only issue which we resolve today, is
extremely narrow, and concerns solely the validity of the Act’s reporting
provisions in connection with the subpoenas served on these Plaintiffs by the
Commissioner.
Turning to that issue, the district court’s conclusion that the reporting
provisions are unconstitutional was based entirely on the concept of legislative Due
Process. The court found, as Plaintiffs contend, that there is an insufficient
connection between the State of Florida and the subject matter of the Act insofar as
the Act calls upon Florida insurers such as the Plaintiffs to produce and compile
information regarding transactions between non-Florida residents that occurred
entirely outside Florida. Plaintiffs argue that the reporting provisions, to the extent
they concern the Plaintiffs’ German affiliates and European transactions, exceed
the constitutionally permissible regulatory authority of the Florida Legislature.
14
The Plaintiffs also contend that the provisions are invalid as applied because,
regardless of whether the Plaintiffs have a “legal relationship” with their German
affiliates, they do not have possession, custody or control over the sought-after
materials, and where such control is lacking they cannot constitutionally be
compelled to produce the materials.
The concept of substantive Due Process limits on a state legislature’s
jurisdiction was recently considered by this Court in American Charities for
Reasonable Fundraising Regulation, Inc. v. Pinellas County, 221 F.3d 1211 (11th
Cir. 2000). That case involved a county ordinance regulating persons, wherever
located, who solicited or assisted with soliciting charitable contributions within the
county. The plaintiffs -- who assisted charities in sending national mailings
addressed to the general public -- brought suit challenging the ordinance on several
constitutional grounds, including denial of Due Process. Plaintiffs argued that they
could not constitutionally be subject to the ordinance because they had insufficient
contacts with the county and did not purposefully avail themselves of any benefits
in the county. The district court granted summary judgment against the plaintiffs.
On appeal, we affirmed the district court with respect to the plaintiffs’ facial
challenge, but reversed and remanded on plaintiffs’ as-applied Due Process
challenge. We held that the county’s application of the ordinance to the plaintiffs
15
“may violate the Due Process Clause of the Fourteenth Amendment.” Id. at 1214;
see also id. at 1217. In the course of our opinion, we framed the Due Process issue
in these terms:
A state’s legislative jurisdiction is circumscribed by the Due
Process Clause: There must be at least some minimal contact between
a State and the regulated subject before it can, consistently with the
requirements of due process, exercise legislative jurisdiction. The
inquiry into whether sufficient legislative jurisdiction exists is similar
to that explored in determining sufficient minimum contacts for the
purposes of assessing whether a court can exercise personal
jurisdiction consistent with due process, or whether a court can apply
a state’s own law under choice-of-law analysis to a case consistent
with due process.
To determine legislative jurisdiction, that is, to confirm that the
application of the County’s regulations to Plaintiffs does not offend
due process, we look to choice-of-law and personal jurisdiction
analyses. When choice-of-law issues arise in court, to apply a state’s
substantive law in accordance with due process, that State must have a
significant contact or significant aggregation of contacts, creating
state interests, such that choice of its law is neither arbitrary nor
fundamentally unfair. And, when a court is considering its personal
jurisdiction, the exercise of jurisdiction does not offend due process if
the pertinent party has certain minimum contacts with the jurisdiction
such that the maintenance of the action does not offend traditional
notions of fair play and substantial justice. Applying these standards
to the question before us now, we ask whether sufficient contacts exist
between the Plaintiffs and the County, creating state interests such that
it would not be fundamentally unfair to subject the Plaintiffs to the
County’s registration requirements. Therefore, a minimum contacts
inquiry is necessary for determining whether the County’s exercise of
legislative jurisdiction, in this case, offends due process. The
regulated party must have performed some act by which it
purposefully avails itself of the privilege of conducting activities
within the County.
16
Id. at 1216 (citations, internal quotation marks, and brackets omitted).
In Adventure Communications v. Kentucky Registry of Election Finance,
191 F.3d 429 (4th Cir. 1999), a decision cited by American Charities, the Fourth
Circuit elaborated on the limits on legislative jurisdiction:
[T]here is a difference between jurisdiction to adjudicate or judicial
jurisdiction on the one hand, and legislative jurisdiction on the other.
The former concerns the power of a state to resolve a particular
dispute through its court system, while the latter involves “the
authority of a state to make its law applicable to persons or activities.”
Legislative jurisdiction is a core concept “to determining the
extraterritorial reach of a statute.” To put it succinctly: Legislative
jurisdiction refers to both “the lawmaking power of a state” and “the
power of a state to apply its laws to any given set of facts,” whereas
adjudicative jurisdiction “is the power of a state to try a particular
action in its courts.”
Nevertheless, the concepts are closely related [and there] is
substantial overlap in the analysis employed in determining the
presence of each kind of jurisdiction. . . . In exploring the due process
limits on the legislative power of a state, the Supreme Court has
employed language similar to that used in personal jurisdiction
matters, explaining that “[t]here must be at least some minimal contact
between a State and the regulated subject before it can, consistently
with the requirements of due process, exercise legislative
jurisdiction.” . . . In sum, although not identical, judicial and
legislative jurisdiction are determined pursuant to like guidelines.
Id. at 435-36 (citations omitted).
The Plaintiffs argue that Florida’s Holocaust Victim’s Insurance Act violates
legislative Due Process constraints to the extent it calls for information about, and
thereby effectively seeks to regulate, European insurance transactions. Plaintiffs
17
contend that (1) the Holocaust-era policies were issued outside of Florida, (2) to
persons not then residing in Florida, (3) regarding persons or property outside of
Florida, and (4) are governed by German law. The Commissioner responds that
the Act does not apply to every insurer whether or not that insurer has contacts
with Florida; rather, technically speaking, the reporting obligation applies only to
insurers, such as these Plaintiffs, who do business in Florida. The Commissioner
contends that Florida insurers obviously have sufficient contacts with the State of
Florida to permit the Florida Legislature to inquire into their affairs.
On this record, we agree with Plaintiffs’ narrow argument that the statute’s
reporting provisions, as applied, violate legislative Due Process constraints. The
relevant question is whether there exists “some minimal contact between a State
and the regulated subject.” American Charities, 221 F.3d at 1216 (emphasis
added). In other words, we inquire not only into the contacts between the regulated
party and the state, but also into the contacts between the regulated subject matter
and the state. Id.; see also Allstate Ins. Co. v. Hague, 449 U.S. 302, 310-11, 101 S.
Ct. 633, 639 (1981) (addressing whether Due Process limited a state court’s ability
to apply its state law to a disputed insurance transaction and stating “the
proposition that if a State has only an insignificant contact with the parties and the
18
occurrence or transaction, application of its law is unconstitutional”) (emphasis
added).
The concept of Due Process constraints on a state legislature’s ability to
regulate subject matters and transactions beyond the state’s boundaries, while
perhaps infrequently litigated in those terms, is not new. It has been invoked in
controversies regarding a state’s power to tax transactions occurring in whole or
part outside its borders. See Quill Corp. v. North Dakota, 504 U.S. 298, 306, 112
S. Ct. 1904, 1910 (1992) (explaining that “[t]he Due Process Clause ‘requires some
definite link, some minimum connection, between a state and the person, property
or transaction it seeks to tax’”) (citation omitted). It has also been invoked in
choice of law disputes, as it was in Hague, 449 U.S. at 302, 110 S. Ct. at 639, and
earlier decisions.
In Home Insurance Co. v. Dick, 281 U.S. 397, 50 S. Ct. 338 (1930), for
example, the Supreme Court held that a Texas statute could not be applied in
litigation arising out of a subject matter with no connection to Texas. That case
involved a disagreement over the terms of an insurance policy which had been
issued in Mexico, by a Mexican insurer, to a Mexican citizen, covering a Mexican
risk. The policy was subsequently assigned to the plaintiff, who was domiciled in
Mexico. The policy restricted coverage to losses occurring in certain Mexican
19
waters, and the loss triggering the litigation occurred in those waters. The plaintiff
nevertheless brought suit in Texas against a New York reinsurer. Neither the
Mexican insurer nor the New York reinsurer had any connection to Texas.
The Texas courts applied a Texas statute to void the insurance contract’s
limitation clause, but the Supreme Court reversed, holding that the statute as
applied violated Due Process. As the Court explained:
The Texas statute as here construed and applied deprives the
garnishees of property without due process of law. A state may, of
course, prohibit and declare invalid the making of certain contracts
within its borders. Ordinarily, it may prohibit performance within its
borders, even of contracts validly made elsewhere, if they are required
to be performed within the state and their performance would violate
its laws. But, in the case at bar, nothing in any way relating to the
policy sued on, or to the contracts of reinsurance, was ever done or
required to be done in Texas. All acts relating to the making of the
policy were done in Mexico. All in relation to the making of the
contracts of reinsurance were done there or in New York. . . . Texas
was therefore without power to affect the terms of contracts so made.
Its attempt to impose a greater obligation than that agreed upon and to
seize property in payment of the imposed obligation violates the
guaranty against deprivation of property without due process of law.
Id. at 407-08, 50 S. Ct. at 341.
Likewise in Watson v. Employers Liability Assurance Corp., 348 U.S. 66,
75 S. Ct. 166 (1954), the Court invoked legislative Due Process principles to
evaluate a Louisiana insurance statute that purported to invalidate certain
provisions in insurance contracts entered out-of-state. Although the Court
20
eventually concluded that there were sufficient contacts between Louisiana and the
regulated subject matter to justify application of the state law on the facts before it,
the Court emphasized again “the due process principle that a state is without power
to exercise ‘extra territorial jurisdiction,’ that is, to regulate and control activities
wholly beyond its boundaries.” Id. at 70, 75 S. Ct. at 169. Simply put, as these
cases show, there must be at least some minimal contact between a state and the
regulated subject matter or transaction before the state can, consistent with the
requirements of Due Process, exercise legislative jurisdiction.
The subject of the Florida Legislature’s concern in the Holocaust Victims
Insurance Act is Holocaust-era insurance policies and the payment of claims still
due under those policies. While there may be a connection between the State of
Florida and that subject to the extent it relates directly to the activities of Florida
insurers, there is virtually no connection between the State of Florida and that
subject to the extent it concerns insurance transactions involving Plaintiffs’
German affiliates that took place years ago in Germany, among German residents,
under German law, relating to persons, property, and events in Germany.
Significantly, the reporting provisions are not on their face limited to information
regarding policies that allegedly may be payable to current Florida residents.
21
Nor is there any dispute that Plaintiffs’ German affiliates do not conduct
business in Florida and have not otherwise purposefully availed themselves of
benefits provided by Florida. See American Charities, 221 F.3d at 1216 (“The
regulated party must have performed some act by which it ‘purposefully avails
itself of the privilege of conducting activities within the [state.]’”) (citation
omitted). The reporting provisions pertain to, and as a practical matter
unquestionably seek to regulate, a subject matter -- the German affiliates’ payment
or non-payment of Holocaust-era policy claims -- with no jurisdictionally-
significant relationship to Florida. The reporting provisions violate Due Process to
that extent, regardless of whether there are minimum contacts between the State of
Florida and these particular Plaintiffs, the (nominally) regulated parties.5
The purpose of the Act underscores why we must look not only at whether
the parties regulated by the Act have contacts with Florida, but also and more
importantly here at whether the subject about which this Act seeks information has
a sufficient nexus to Florida. In the Act itself the Legislature states its purpose as
ensuring that “potential and actual insurance claims of Holocaust victims and their
5
The Commissioner cites United States v. Morton Salt Co., 338 U.S. 632, 70 S. Ct. 357
(1950) and other cases for the proposition that the jurisdiction of an administrative agency is
greater than that of a court. The cases cited by the Commissioner do not sweep so broadly or
alter the Due Process inquiry we must undertake; at best, they establish that an investigating
agency may in some instances have powers to gather information broader than those available to
courts.
22
heirs and beneficiaries be expeditiously identified and properly paid and that
Holocaust victims and their families receive appropriate assistance in the filing and
payment of their rightful claims.” Fla. Stat. § 626.9543(2). The express purpose
of the Act, while important, clearly goes far beyond regulating the activities of
insurers with contacts to Florida.
The Commissioner attempts to avoid that fact by arguing that the purpose of
the reporting requirement is fundamentally to regulate Florida insurers, as opposed
to their European affiliates. The Commissioner asserts that the Legislature acted
pursuant to its legitimate interest in seeing that insurers doing business in Florida
“pay just claims.” But that rationale plainly does not justify imposing on Florida
insurers intrusive and burdensome demands for information about the payment of
Holocaust-related claims by insurers not doing business in Florida who concededly
lack any independent contacts with Florida.6
6
In a supplemental brief served on the eve of oral argument, the Commissioner argued
that legislative jurisdiction exists, under principles applied in the personal jurisdiction context,
because the unlawful failure of foreign insurers to pay Holocaust-era claims has caused direct
effects in Florida and because denials of benefits or claims information have been made to
current Florida residents. No record evidence supports those contentions with regard to these
Plaintiffs. Moreover, as Plaintiffs point out (in an argument the Commissioner does not
controvert), case law undermines the Commissioner’s implicit assumption that a post-transaction
change of residence by policy claimants or their beneficiaries may create a jurisdictionally-
significant contact. See, e.g., McCluney v. Jos. Schlitz Brewing Co., 649 F.2d 578, 583 (8th Cir.
1981) (citing Hague and John Hancock Mut. Life Ins. Co. v. Yates, 299 U.S. 178, 57 S. Ct. 129
(1936)); cf. Hanson v. Denckla, 357 U.S. 235, 253, 78 S. Ct. 1228, 1239 (1958) (“The unilateral
activity of those who claim some relationship with a nonresident defendant cannot satisfy the
requirement of contact with the forum State.”); Rambo v. American Southern Ins. Co., 839 F.2d
23
The Commissioner also contends that production of information regarding
potential Holocaust-era claims against a Florida insurer’s affiliates is necessary to
confirm the claims payment practices, solvency, and “good character” of the
Florida insurer.7 The Commissioner makes this contention even though the
General Counsel of the Department of Insurance squarely articulated to the district
court at the summary judgment hearing the Commissioner’s view that “[t]he
purpose of the [Act] is to make sure that Florida citizens, who are potential
beneficiaries [under these policies], have the maximum ability to have the
documentation to receive the redress they are entitled to.” Transcript of Hrg., Mar.
3, 2000, at 43.
The Commissioner’s position in this appeal regarding the purpose of the Act
cannot be squared with the Legislature’s own unequivocal statement of its purpose.
1415, 1420 (10th Cir. 1988) (plaintiffs’ change of residence after disputed insurance policy was
issued and the claim arose insufficient to support personal jurisdiction in plaintiffs’ new state).
The Commissioner’s arguments, on this record, are unpersuasive.
7
Plaintiffs maintain that this justification was never offered below. The Commissioner
insists that he argued this justification in his summary judgment papers, but having reviewed the
record it is clear that such a justification was not advanced in a meaningful way. Notably, there
is no evidence in this record that the Plaintiffs would suffer adverse financial consequences
(sufficiently material to affect their ability to pay ordinary Florida claimants) as a result of any
remaining Holocaust-era liabilities on the part of foreign insurers with which they merely have
some indirect “legal relationship.” Nor is there any evidence of a connection between the
current claims-handling practices of these Plaintiffs in Florida and their affiliates’ payment or
non-payment of Holocaust-era claims. All of these considerations weigh against the
Commissioner’s position on appeal.
24
The sole express purpose of the Holocaust Victims Insurance Act does not
demonstrate a concern with the good character, solvency, or present payment
practices of Florida insurers; indeed, the Legislature’s inclusion of the claims
recovery provisions in the same statute itself belies any suggestion that the
reporting provisions are really intended to protect ordinary policyholders by
monitoring the exposure and financial sufficiency of Florida insurers. Rather, as
quoted above, the Legislature described the purpose of the Act as ensuring that
“potential and actual insurance claims of Holocaust victims and their heirs and
beneficiaries be expeditiously identified and properly paid and that Holocaust
victims and their families receive appropriate assistance in the filing and payment
of their rightful claims.” Fla. Stat. § 626.9543(2).
We have often emphasized in other contexts that the focal point for
determining a legislature’s purpose in enacting a particular statute must be the
plain language of the statute itself. See, e.g., Church of Scientology Flag Serv.
Org., Inc. v. City of Clearwater, 2 F.3d 1514, 1527 (11th Cir. 1993) (“Inquiry into
legislative purpose begins with interpreting the law itself.”). The express purpose
of the Act reaches well beyond determining the fitness and potential financial
liabilities of Florida insurers; indeed, it has little or nothing to do with that subject.
We are unwilling to ignore the Florida Legislature’s clear statutory statement of
25
purpose in favor of the Commissioner’s litigating position (which the Legislature
did not endorse in § 626.9543), and the Commissioner offers us no case law or
persuasive authority upon which we might do so.
We do not mean to say that the Commissioner is necessarily without
authority to investigate and obtain records regarding the practices of affiliates of
Florida insurers. On the contrary, separate provisions of the Florida Insurance
Code may well give the Commissioner authority to conduct far-reaching inquiries
into the affairs of a Florida insurer’s affiliates in order to determine whether the
Florida insurer is fit to do business in the state. For example, Fla. Stat. § 624.316
directs the Commissioner to examine “the affairs, transactions, accounts, records,
and assets” of Florida insurers, and advises that as part of this process the
Commissioner may also examine “the affairs . . . and records relating directly or
indirectly to the insurer and of the assets of the insurer’s managing general agents
and controlling or controlled person.” Fla. Stat. § 624.316(1)(a). The statute
further provides that these examinations may be conducted whenever warranted
“for the protection of the policyholders and in the public interest,” and may
encompass past events “that affect[] the present financial condition of the insurer.”
Id.
26
We offer no view as to whether these provisions (which the Commissioner
does not even invoke) might have authorized the subpoenas served by the
Commissioner in this case; nor do we offer any view regarding the constitutionality
of invoking those provisions in this context. Certainly these provisions fit more
closely with the purpose now asserted by the Commissioner, and that fact may well
affect the Due Process analysis. But the critical point is that these subpoenas were
issued in furtherance of an investigation under the Holocaust Victims Insurance
Act, and that Act is not concerned with the financial stability or fitness of insurers
doing business in Florida; it plainly is designed to facilitate the payment of
Holocaust-era policy claims.
In short, the district court correctly reasoned that, to the extent the Act calls
for the production of information by these Plaintiffs regarding Holocaust-era
policies issued outside Florida by German entities having only some corporate
affiliation with them and no other contacts to Florida, it violates Due Process limits
on legislative jurisdiction. The Act’s reporting provisions violate Due Process as
applied to these Plaintiffs on these facts. We therefore uphold the district court’s
entry of summary judgment in Plaintiffs’ favor and leave in place the limited
injunction that it issued against the Commissioner. We do not, and need not,
address the Plaintiffs’ other arguments for declaring the Act unconstitutional, and
27
do not, as explained above, consider the Act’s claims recovery provisions,
Plaintiffs’ entitlement to any relief beyond that ordered by the district court, or the
Commissioner’s ability to obtain this information pursuant to other provisions of
the Florida Insurance Code.
AFFIRMED.
28