Taiheiyo Cement Corp. v. Superior Court

12 Cal. Rptr. 3d 32, 117 Cal. App. 4th 380, 4 Cal. Daily Op. Serv. 2764, 2004 Daily Journal DAR 3990, 2004 Cal. App. LEXIS 426
CourtCalifornia Court of Appeal
DecidedMarch 30, 2004
DocketB155736
StatusPublished
Cited by6 cases

This text of 12 Cal. Rptr. 3d 32 (Taiheiyo Cement Corp. v. Superior Court) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Taiheiyo Cement Corp. v. Superior Court, 12 Cal. Rptr. 3d 32, 117 Cal. App. 4th 380, 4 Cal. Daily Op. Serv. 2764, 2004 Daily Journal DAR 3990, 2004 Cal. App. LEXIS 426 (Cal. Ct. App. 2004).

Opinions

[385]*385Opinion

BOLAND, J.

INTRODUCTION

Code of Civil Procedure section 354.61 allows certain individuals who were “slave labor” or “forced labor” victims during World War II (WWII) to recover compensation for unpaid labor and personal injuries suffered at the hands of “the Nazi regime, its allies and sympathizers, or enterprises transacting business in any of the areas occupied by or under control of the Nazi regime or its allies and sympathizers.” (§ 354.6, subd. (a)(1) & (2).) On January 15, 2003, we decided section 354.6 was constitutional because the lawsuits authorized by the statute did not impermissibly infringe upon the federal government’s exclusive power over foreign affairs, and because the Treaty of Peace with Japan that formally ended WWII between the United States and Japan (1951 Treaty) did not demonstrate a clear intent to bar the wartime claims of Korean nationals.

The California Supreme Court granted review and transferred this case back to us with instructions to vacate our opinion and reconsider it in light of American Ins. Ass’n v. Garamendi (2003) 539 U.S. 396 [156 L.Ed.2d 376, 123 S.Ct. 2374] (Garamendi), decided by the United States Supreme Court on June 23, 2003. Garamendi held California's Holocaust Victim Insurance Relief Act (HVIRA) was unconstitutional because it conflicted with certain executive agreements negotiated by the President with several European leaders. The executive agreements sought, among other things, to encourage European insurers to provide information about unpaid insurance policies issued to Holocaust victims and the settlement of claims brought under them. (Id. at pp. 403-409 [123 S.Ct. at pp. 2381-2383].) The Court held HVIRA’s requirement that insurers publicly disclose information concerning Holocaust-era policies conflicted with, and thus was preempted by, the President’s foreign policy embodied in the agreements that such information and claims be resolved voluntarily rather than through a state system of economic compulsion. (Id. at pp. 422-427 [123 S.Ct. at pp. 2391-2393].)

In light of Garamendi, we vacate our prior opinion and hold section 354.6 is unconstitutional because it conflicts with the federal policy embodied in the 1951 Treaty. While the 1951 Treaty does not expressly preempt Jeong’s claims under section 354.6, it embodies the federal government’s foreign policy that claims against Japan and its nationals are to be resolved diplomatically. By encouraging coercive litigation of claims against Japanese nationals, section 354.6 conflicts with the federal policy of diplomacy embodied in the treaty.

[386]*386FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND

Jae Won Jeong sued to recover compensation for unpaid labor and personal injuries suffered while enslaved in a labor camp during WWII. Jeong, who is now a United States citizen and a California resident, claims he was a Korean national during WWII. Refusing to join the Japanese military, Jeong was taken to a slave labor camp in Korea operated by a Japanese cement company. Along with other Korean nationals, Jeong was subjected to physical and mental torture and forced to perform hard physical labor without compensation, all to benefit the Japanese war effort.2

Onoda Cement Co., Ltd., is the Japanese entity that operated the company where Jeong was forced to work. Jeong sued Onoda, Taiheiyo Cement Corporation (the Japanese entity that succeeded Onoda by merger), and three of Taiheiyo’s subsidiaries, all of which are referred to as Taiheiyo.3 Jeong alleged causes of action for (1) compensation under section 354.6, (2) unjust enrichment, (3) injuries in tort, including battery, intentional infliction of emotional distress, and unlawful imprisonment, and (4) unfair business practices under Business and Professions Code section 17200 et seq.

Taiheiyo moved for judgment on the pleadings contending, among other grounds, the 1951 Treaty preempted Jeong’s claims under section 354.6. In a subsequent motion for judgment on the pleadings, Taiheiyo argued section 354.6 was unconstitutional under Zschenig v. Miller (1968) 389 U.S. 429 [19 L.Ed.2d 683, 88 S.Ct. 664] (Zschenig) because it interfered with the federal government’s exclusive power over foreign affairs, and it violated due process.4 The trial court denied both motions.

Taiheiyo filed a petition for writ of mandate challenging the trial court’s ruling. We denied the petition, deciding the 1951 Treaty did not preempt Jeong’s claims under section 354.6 and the statute was constitutional under Zschemig’s foreign affairs doctrine. As we will discuss, we have reconsidered this case in light of Garamendi, which compels us to conclude section 354.6 is unconstitutional.

[387]*387DISCUSSION

A. Section 354.6 Permits Actions for World War II Claims.

Enacted as an emergency measure in 1999 (Sen. Bill No. 1245 (1999-2000 Reg. Sess.)), section 354.6 allows any WWII “slave labor victim” or “forced labor victim,” or their heirs, to “bring an action to recover compensation for labor performed as a . . . slave labor victim or . . . forced labor victim from any entity or successor in interest thereof, for whom that labor was performed, either directly or through a subsidiary or affiliate.” (§ 354.6, subd. (b).)5 The statute provides that California courts have jurisdiction over such lawsuits and that “[a]ny action brought under this section shall not be dismissed for failure to comply with the applicable statute of limitations, if the action is commenced on or before December 31, 2010.” (§ 354.6, subds. (b) & (c).)

The Legislature clarified that section 354.6 was enacted because “[thousands of victims of Nazi persecution, and the heirs of victims of Nazi persecution, are residents of the State of California, [f] (b) These victims of Nazi persecution have been deprived of their entitlement to compensation for their labor and for injuries sustained while performing that labor as forced or slave laborers prior to and during the Second World War. [f] (c) California has a moral and public policy interest in assuring that its residents and citizens are given a reasonable opportunity to claim their entitlement to compensation for forced or slave labor performed prior to and during the Second World War. fjQ (d) To the extent that the statute of limitations applicable to claims for compensation is extended by this act, that extension of the limitations period is intended to be applied retroactively, irrespective of whether the claims were otherwise barred by any applicable statute of limitations under any other provision of law prior to the enactment of this act.” (Sen. Bill No. 1245 (1999-2000 Reg. Sess.) § 1, subds. (a)-(d).)

[388]*388In short, section 354.6 permits actions for unpaid labor and personal injuries by persons subjected to slave or forced labor during WWII by the Nazis, their allies and sympathizers. It allows victims to sue the entities that enslaved them, or any successor in interest or affiliate of those entities.

B. Garamendi’s “Conflict” Theory of Foreign Affairs Preemption.

Because

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Taiheiyo Cement Corp. v. Superior Court
12 Cal. Rptr. 3d 32 (California Court of Appeal, 2004)

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12 Cal. Rptr. 3d 32, 117 Cal. App. 4th 380, 4 Cal. Daily Op. Serv. 2764, 2004 Daily Journal DAR 3990, 2004 Cal. App. LEXIS 426, Counsel Stack Legal Research, https://law.counselstack.com/opinion/taiheiyo-cement-corp-v-superior-court-calctapp-2004.