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In the ongoing legal war over California's 1999 Holocaust Victim Insurance Relief Act, Holocaust survivor advocacy groups and the state Department of Insurance won the latest battle last week.

In a Feb. 7 ruling, the 9th Circuit Court of Appeals in San Francisco found that a U.S. District Court judge erred in his interpretation of the law last June, when he issued a temporary injunction against the HVIRA, which required insurance companies to submit lists of their European policyholders from 1920 to 1945.

U.S. District Judge William Shubb in Sacramento had ruled that the law potentially violated the "commerce clause" of the Constitution and the U.S. government's foreign affairs powers, writing that the Holocaust relief act "is meddling in foreign commerce completely outside its borders."

However, a three-judge panel at the 9th Circuit Court disagreed, ruling that California was not creating its own foreign policy or regulating interstate commerce.

The 13-page decision penned by Judge Susan P. Graber maintains that the relief act does not "regulate" insurance companies, but merely "requires California companies only to provide information about their Holocaust-era insurance policies that they (or any of their affiliates) issued."

Additionally, the 9th Circuit Court's ruling cited the U.S. Holocaust Assets Commission Act of 1998, passed by the U.S. Congress. The act called for a federal commission to "take note of the work" of state insurance commissioners "with regard to Holocaust-era insurance issues."

The 9th Circuit Court found that this statement may be an "encouragement of state statutes like HVIRA." Or, at the very least, it shows "Congress was aware" that state insurance departments were "conducting research into the activities of Holocaust-era insurers."

Yet, in a setback for the state Department of Insurance and Holocaust survivor advocacy groups, the 9th Circuit Court did not lift the temporary injunction.

Shubb's June ruling didn't address insurance companies' claims that the HVIRA violates the due process clause. With this claim still in the air, the 9th Circuit Court remanded the case back to U.S. District Court.

Still, state Department of Insurance lawyers saw the ruling as a big victory.

"It's very good news, it's excellent news," said Frank Kaplan, the department's outside counsel.

"It's important because the two grounds the insurance companies and the district court relied on — and, in our view, what we consider to be their two best arguments — the 9th Circuit Court completely disagreed with," Kaplan said. "That eliminated two of the biggest issues in the case. I think they're left with arguments that are sort of their second-tier arguments."

Insurance company lawyers expressed disappointment with the ruling but were pleased that the injunction was intact.

"The law is still unenforceable," said Linda Dakin-Grimm, one of several lawyers for the consortium of insurance companies. "I'm not trying to be cute or anything and say they lost, but, in a technical manner, the preliminary injunction was affirmed."

Wally Knox, the former Los Angeles Democratic Assemblyman who authored the HVIRA, dismissed Dakin-Grimm's claim with a one-word reply: "Hogwash."

"Any lawyer will tell you that, in this circumstance, where one of the arguments was not ruled upon by a lower court, the 9th had no choice but to remand it to the lower court for further proceedings," Knox said. "For folks wondering what the significance of [this ruling] is, and why the insurance companies are calling it a victory for them, I say, consider the source."

Rather than heading straight to U.S. District Court, the insurance companies may opt to ask the 9th Circuit Court for a re-hearing or an en banc, a review by an 11-judge panel. They could also push the case a rung up the judicial ladder to the U.S. Supreme Court.

Any motion for a re-hearing or an en banc is due by Wednesday. Craig Barrington, the senior vice president and general counsel of the American Insurance Association, one of the plaintiffs in the case, said the insurance companies would "almost certainly" file for an en banc.

State insurance department lawyers and survivor advocates postulated that the insurance companies would probably choose the most time-consuming path.

"I don't think they want to give up this information [policyholder lists], and they're doing everything they can and spending as much money as they need in order to shield themselves from having to provide the information," said Leslie Tick, the Department of Insurance's senior staff counsel.

"Their whole strategy in ICHEIC [the International Commission of Holocaust-Era Insurance Claims] and in litigation has been to delay," Tick added. "That's too bad, because the longer it takes to hear this, the longer it takes to get the lists out and help people get claims."

In the case of Holocaust survivors, time is a luxury they don't have. Approximately 22,000 Holocaust survivors live in California, and 10 percent are dying each year, according to conservative estimates.

"One of [the insurance companies'] continuing strategies is to delay," said Richard Mahan, spokesman for the California Holocaust Insurance Settlement Alliance. "The longer they drag things out, sadly, more Holocaust survivors die and the less chance there is some people will recover policies."