good morning and may please the court washington has decided as have many other states that mandatory arbitration clauses in any insurance contract are void is against public policy essentially a p i c suggests that they want to be that they are allowed to ignore the public policy of washington state and include insurance including their insurance contracts arbitration clauses this disparate treatment has absolutely no reasonable justification under the liability risk retention act in fact under the act is specifically leaves interpretation of contracts to the states well but how is that the same interpretation of contract is one thing but the application of public policy because washington state decides it doesn't like what is generally a federal policy in favor arbitration sounds to me like something else was the question i'm sorry oh you say that the federal statute leaves contract interpretation to state law i'm not sure how that speaks to this this isn't a question of contract interpretation it's a question of whether the general federal policy expressed in the federal arbitration act as applied by the supreme court in more cases than i can count applies here so you  say well the federal statute leaves contract interpretation to state law and my question is so what because this isn't a matter of contract interpretation is it so matter of whether the washington state policy applies it is a matter of contract interpretation as well it is a matter of state's rights and the importance of state laws as soon as you start talking about states rights need foresman to state laws i don't know how that flows from contract interpretation the the l r a specifically states that it is left to the state contract interpretation exactly but i don't understand how the point you're trying to make is a question of contract interpretation it's not a contract interpretation ok how well for instance in this contract a p i c is also attempting to require california law to apply so if the l l or l r a has specifically exempted certain state insurance laws from application then how can we be separate question is is simple when meant to be narrow it's not really a broad attack but you're trying to cite to that provision of the federal statute to support your position on honors now the question in front of this is a question of contract interpretation so i'm just asking you how is this a question of contract interpretation one it's one aspect of it interpretation of contract because this essentially washington has no ability to interpret this provision this contract whatsoever the law the choice of law was taken from washington and washington was being ignored when it says we want to keep policy holders and the insurance companies within our borders and have subject to our jurisdiction and it's all over the limited risk retention my ability act that it has preserved this power to the  states it is also preserved the authority of the states to to to encourage the states to also be able to construe their tort law and how can we do that if we've got a contract that was offered in washington and apparently is subject to california law so all these provisions that were outlined in the limited risk retention act are not are being ignored because a risk retention groups can sow a contract in washington and cause insurance insurance to go down to california subject to california law subject arbitration one that is entirely contrary to washington law the purpose of the limited liability act was not to allow this insurance company to go all over and not have to limit gate in the states that it sells interest insurance contracts in the l r it was designed to increase the supply of insurance for buyers of insurance not to benefit these insurance companies but preemption language is very broad i mean says you know it exempts any state law that would regulate directly or indirectly the operational risk protection group and i understand your point about the purpose of congress but you know frankly who knows what congress intended we have to look at the language that was  very broad preemption language of how to get around that there are there are cases of that suggest that it is very broad that it is sweeping but that doesn't mean that you can ignore the actual provisions within the statute there's other case law that suggests that that we're going to issue it's really goes to the into plot of an industry to a claim is such a favored type of device throughout the country it's not like you deal with fraudulent situations it's things which i can understand you know we should defer to the states this is just simply claims administration claims administration and you think sure it makes it very inexpensive if you supply insurance all across the nation you require everybody to come to california or you know the lot it makes it burdensome for them to come and arbitrate we've declined coverage there's no coverage there and it puts their insured in a complete box so the insert who has no money is being forced into bankruptcy for personal injury claims and then they're supposed to go litigate or arbitrate coverage in california district court and then going to get sent to arbitration where there's a choice of law provision for california law so now our washington has no say whatsoever at all to protect its consumers from the so sure as they read the law that even under the laws of washington has a statute that suggests any insurance policy issued in washington cannot have an arbitration provision taking the insured out of its jurisdiction in order to talks about certain types of fraudulent behavior those types of things right again so this is planned all betray should it's not just plain old arbitration and i urge you to look behind that the washington supreme court has said that their lawmakers washington legislature has intended for the anti arbitration law to protect policy horrible holders right to bring action against the getting to the washington state supreme court the washington consumer protection act creates a statutory cause of action to protect against unfair methods or deceptive acts and practices what we're talking about here is not just statutory and it has been identified what constitutes an unfair claim or deceptive unfair claims statement practices in that with the talking about that are specifically denominated by the washington should it's condition as the insurance condition specifically denominated ration is an unfair practice you know it has identified what constitutes an unfair practice and an unfair denial of claims or coverage without providing a do they have a duty to defend all of this is included within washington law and a p i see gets away from that by forcing keep pointing out what washington provisions are applying to insurance companies but not necessarily to risk retention groups is there something you can point to me in the  the washington statute provides a list of regulations that a foreign risk retention group must comply with under washington law i don't see an anti arbitration statute on that list most let me let me ask this right so if the federal act says that these companies have to comply with the state's unfair claim settlement practice and their state laws regarding their deceptive false practices and acts how what washington does the question raised by judge block is it wasn't clear to him and i confess not clear to me that even if you didn't have that problem that the washington law is so clear with regard to what applies to risk retention groups center group suggest that they have to comply with the state law regarding on for claims and practices we get away from that in washington i suggested there anti arbitration law is designed so that they can ensure that are state unfair claims and practices that laws are being abided by if you subject us to arbitration and a choice of lot all of a sudden washington's law regarding unfair deceptive practices is no arbitrator gets to decide and they'll decide to apply california law so now even though the l r a has specifically delineated and expressly reserve this power to the states to resolve their own unfair claim practices act so we have alleged that they have unfairly denied coverage putting their insured in a box and this is what washington wanted to avoid why it wanted to retain jurisdiction so it could make sure and it would respect its own laws and other cases have other case other states have done the exact same thing when looking at their anti arbitration was that all along as they precedent that's contrary to your position here well no they very they do vary but what you're going to find interesting  is that and like say kentucky or nebraska or missouri they all have insurance who have been burned by their insurance company simply decided they're not going to provide coverage patient support your position seems that all the cases  contrary no they're not all contrary maybe one state that you know supports your position be kentucky national can't national home versus king and that case there was claims made for bad faith deceptive practices removed their ability to be covered under state law yes it does they subject they put in the insurance policies the ability to force our insurance to a foreigner stiction to arbitrate and therefore washington try to ignore two issues that are fundamental and that are threshold issues st allied arbitration provision is in full compliance with washington law we therefore have respect we submit that the trial court should not have submitted this appeal to this panel on the issue of preemption but you only get to preemption as a nd point of analysis washington has a risk retention act as does every state in the union it's based on the liability risk retention act based on the n e a i see model act and it couldn't be more clear it's specifically lists those washington state laws that a foreign risk retention group must comply with and it's very clear it and the appellant's don't didn't even deal with this until reply and then belatedly in reply for the very st time they raise washington's unfair claims practices act now as a couple problems with this st they didn't raise it below and they didn't raise it in their opening brief therefore they waived it nd and more fundamentally there are no such claims in this case there are no cross complaints of any type by  in this case the only thing said in this case and for this court is my client's lawsuit in federal court to enforce an arbitration agreement because it believed there was a dispute about coverage now  that kind of gets us to our nd point which is if they had a go i really don't follow your waiver point that much more my waiver point is really twofold the st is they didn't raise the entered by the district court which you may complain the district court should have gone off in that direction but it didn't so it doesn't surprise me the opening brief focuses on the ground cited by the district court i don't understand how the failure to talk about a separate issue constitutes waiver because it was an issue before the trial court is our point the this record didn't rely upon it conceptually i can sort of see it but we usually see opening braves that focus on the reason they got tossed out below and that's what happened here ok so all right fair enough the nd point though remains which is there are no such claims here there is no claim for bad faith there is no claim here for unfair trade practices there is no claim on a wash and consumer protection act below anyway so there's no ability to rely on it even if it was brought up properly in reply except possibly for the the concept that requiring arbitration in other jurisdictions subject to the laws of another to get to is that such a claim here would be frivolous because washington has very specific requirements for something to be an unfair to claims practice washington specifically says three things have to occur for something to be an unfair denominating arbitration as an unfair claim practice the nd thing is the washington insurance commission would then need to put it in a regulation and then the rd thing is the washington commissioner would have to state his or her reasons for why that determination was made so that there can be a determination by the washington superior court as to whether in fact it really is an unfair claims practice none of that occurred here there is no such regulation there is no specific denomination there is no such statement of reasons in fact what we have is the opposite there is a washington which we've cited in our brief regulation from the washington surance commission that specifically denominated arbitration is ok they give three methods  results of a bit of a claim and it's appraisal civil litigation or arbitration and that means that there is nothing like that now the only thing that the appellant goes to in their reply is pointing out another section that states that a st party claimant may doesn't say must if their claim was denied in bad faith bring an action in civil court now ignoring for a month that one of the appellant is a rd party claimant there's a there's a variety of problems with this contention st it says may it doesn't say must it doesn't say you may not agree to go go to arbitration it just creates one non exclusive mechanism for having a remedy now this case and this issue has come up many many times where statutes have references to a potential remedy that you meant that you may have and the to an arbitrary form unless the statute specifically goes on to say and by the way you can only have it and in a civil court you may not have it anywhere else and that and there's nothing like that here so we respectfully submit that preemption didn't need to be reached and that this panel doesn't need to reach preemption because we believe the arbitration provision on its face fully complies with washington law on the issue of preemption we believe that the decision of the trial court i think if you want  truly an issue of state law are you encouraging this to certify a question to the state court because we have authority certainly on questions of federal law on the preemption issue but if you're saying the basis of our decision ought to be state law then it comes to some question as to whether we're the ones we're the proper judicial body to pass on that there is in every case where this circuit  determines that they don't need to reach preemption they necessarily deciding things under state law unless there's a question of st impression there are some is there reason we should reach the state law question st instead of addressing the federal question for my understanding of statutory interpretation is that that's always the way order in which things are done you st deal with the question of is this is this in fact a violation of state law and then if it is is that state law preempted in my point is it appears on its face that this arbitration provision is fully compliant and there is no serious question about what washington state laws james river specifically held that's the washington supreme court that this is a that this anti arbitration provision regulates insurance they contend that we contend that i don't think that there's a novel question that needs to be to be certified anywhere at this point i think that on its very face it is very clear that washing has a list of nine laws that that need to be complied with by foreign risk retention group it's just not on the list so i don't think there's a novel question that needs to be resolved are there any cases that at least are somewhat analogous that  this act is analyzed there are no cases by the washington supreme court analyzing the washington's risk retention act no but there are many cases analyzing its provisions and it's clear statutory terms invites clear terms it lists the nine things that washington foreign risk retention group is subject to it's just not on the list so there's nothing novel to be looked at and found at this point on the issue of federal preemption the i believe we believe the trial court correctly decided the question of to the extent that you apply washington's an arbitration provision to a foreign risk retention group then would be preempted the mayor karen ferguson act reversed pre amps of federal law quote unless such an act specifically relates to the business of insurance close quote well the liability risk retention act is quintessentially that it is an that specifically rates to the business of insurance and the u s supreme court has made clear what that definition is it's anything that revolves around the question revolves around the relationship between a insurance company and its policy holder including the endorsement of policy terms close quote that is this case this is a dispute about a provision in an insurance policy in this case an arbitration provision and the relationship between the insured in the insurer but congress to leave anything to chance they specifically went on to enact thirty nine o two b three c which states that any state laws apply to a foreign risk retention group is preempted if it relates to lost control and claims administration that's a quote well lost control and claims administration nothing could be more directly that than an arbitration provision to decide claims but congress went on they end up an act the thirty nine thousand and twenty eight which states that foreign risk retention groups quote are exempt from any law close quote and then they list four of them and a one which was mentioned earlier says that they can't regulate directly or indirectly be operation of a risk retention group close quote well james river found that in fact that's the washington supreme court that the ant washington is an arbitration provision does regulate the business of insurance that's why the federal arbitration act was deemed not to apply to it but then we go on to a four and this is the nd thing that they that the is congress's catch all provision that is the provision where they go or otherwise discriminate and that's that stubborn little word or that means that all four of those a one for a four are disjunctive and not state laws are preempted if they do any of the four things the appellant want you to read those to the a one in a forty gather and they want you to rewrite the statute to put the word and in rather than the word or so that if something regulates the operation of an insurance company and discriminates then it's preempted that's just not the the law on this and this nation five circuits have considered this issue including this circuit three times and attorneys liability alliance for non profits in greenfield and in all of those cases has have reaffirmed the broad preemptive effect of the liability risk retention act and the nd circuit has in wadsworth as have the ga and the brass the supreme courts that again leaves them back with the only thing that they can rely on is the unfair claims practices act and washington's consumer protection act and we've already discussed those there are no such claims in this case for them to rely upon and those claims would be substantively frivolous if they did exist because there no mention in either one of the statues of an arbitration there is been some comment in the briefing and some suggestion that this is somehow an unfair or or a travesty and nothing could be further from the truth this is not them can afford so they join together they get better rates and they get coverage more customized to their needs furthermore this is not this arbitration far from being unfair claims practice is about as fair as you can imagine it's completely vanilla nobody waves any rights no there's no special procedural benefits and discovery it is one hundred percent bilateral and fair and finally i would note that were the this panel to accept what the appellants have suggested and rewrite this act as the amis points out it would have not only a significant destructive effect on allied professionals in the alternative health care providers but on all of the small risk retention groups around the country they were covering a myriad of risks because suddenly they would have to comply with all fifty states laws and that's just not what congress intended thank you very much  thank you not all states have entire patrician laws in washington that arbitration loss states that depriving courts of the state of jurisdiction of an action against the insurer is the problem we have no relief because we we are forced to an arbitration subject to a it like the statute repeats that they that risk retention groups for nurse retention groups shall be subject to any and all unfair claims settlement practice statutes and the anti arbitration statute is to allow washington to enforce its unfair claims settlement practices against the insured and you take it away if you were if you don't recognize this entire situation provision we are at the washington regulation that lists the civic unfair claim settlement practices the find where in the list will i find the retraction provision it's not the anti arbitration provision it's once what we won't follow washington law if we have to go to california under insurer did was the unfair act and when we sought relief from washington courts actually what did the insurer do that was being unfairly denied the claim after four days no investigation just said there's no insurance and forced their insured into a box and when he tried to l washington administrative code outlined by the insurance commissioner and i'm looking at that now which one are you pointing to the unfair claim settlement practices act the fine the failure to acknowledge pertinent communications the standard for prompt investigation of claims this claim wasn't you ask me about state cases specifically sturgeon out of missouri recognize the anti arbitration law it did not find the key word was the operations of the risk retention group and having an anti arbitration provision was not going to impact the operation at all itself thank you thank you cases been submitted