good morning your honour's amanda bond with sussman godfrey on behalf of plaintiffs may it please the court it is undisputed that plaintiff's insurance policy covered acts of terrorism and excluded acts of war or warlike action by military force it is undisputed that within the insurance industry there is a custom and usage that these exclusions apply to hostilities between sovereign entities and it is and with regard to the undisputed the because of expert testimony a number of factors your honor yes there is expert testimony below plaintiff's expert mr sag allow which is an rebutted mr sac allows declaration walks through the insurance industry custom and usage distinguishing acts of war from acts of terrorism in particular in the context of post nine eleven insurance policies and defendant had no expert testimony rebutting mr sack allows opinion with the bottom line conclusion that the war  sekulow makes several points number one that with respect to these particular exclusions industry custom and practice attempts to align the interpretation with the position of the u s government sir with respect to his opinion he does not address legal requirements or california law instead he is addressing written large the insurance industry's custom and usage as a matter of fact and so his opinion is fair way of characterizing his opinion is establishing the existence of the customer usage and then we are making the argument that under section six hundred forty four that is the predicate for applying the special meaning as required under california law thank you your honor and in addition to mr sag allows unrebutted opinion there's also additional evidence number one in defendant's own denial of coverage letter they themselves took the position that these war and warlike action custom and usage is undisputed and finally in both the briefing below and the briefing before this court the defendant has made the argument that plain and ordinary meaning should apply because according to defendant there is no specific evidence that the parties intended to use a technical meaning that is a legal argument about which interpretation should apply but there is nowhere in their briefing below or on appeal where they dispute that within the insurance industry there is a custom and usage of applying these exclusions to the actions of sovereign or quasi i sovereign entities if we agree with you that the district court should have considered the industry expert t evidence in the record such that it's really appropriate for the district court to consider them and weigh them in the first instance such as carnivale an expert testimony or decisional arguments because we have the excerpts of record that you've presented for purposes of appeal but sometimes it leads us in different directions depending on whether there's still factual issues to be resolved before that conclusion is reached by the district court absolutely your honor i think in particular with respect to the existence of this special meaning by virtue of custom and usage the facts are undisputed for the reasons that i just mentioned there is no countervailing expert opinion that defendants have offered to rebut the opinion of  both their briefing below and on appeal there is no argument the defendants have raised that as a matter of fact there is no such custom or usage their own denial of coverage letter acknowledged this industry customer usage so in this particular circumstance with respect to the definition of war and war like action by military force i think the record is complete i think the record reveals that there is no dispute of material fact the only question is whether california law under section sixteen forty four mandates applying that special meaning and for that reason we don't think there is a factual issue for the district court to weigh in the first instance when it comes to war and war like action by a military force  i would also add that even if the defendant were correct and plain ordinary meaning should apply we think that the plain an ordinary meaning of those terms would also support plaintiff's position in fact the very dictionaries that the district court cited albeit citing secondary definitions that apply to things like price wars or class wars if you actually look to the primary definitions that apply to wars of violence which are clearly what these particular exclusions were contemplating those definitions also make clear that war is understood to involve sovereign or quasi i sovereign entities and so where that leaves us is defendant's argument one that the district court adopted below that contrary to united states foreign policy as expressed by numerous presidential administrations going back decades that hamas is a foreign terrorist organization that this court should deem hamas to have some sort of in disha of sovereignty and that kind of finding issued by a court of appeal directly contrary to the foreign policy of the executive branch type of finding is one that the law simply recognizes would be inappropriate the law recognizes that deference to the executive branch is a pro or up with the deference the little bit different than you know extent to say what the state department says or what congress says but it's not necessarily error not to follow the executive determination which are made for different purposes  different other than insurance purposes yes your honor and what i would like to suggest is that in addition to deferring to the executive branch not advocating but deferring part of what's at play here is the requirement under california law that the particular point i think there is no support in california case law nor did defendant cite any case nor did the district court cite any case that in circumstances like those presented here where the exclusion formal language in fact form language found in standard i s o forms that have been issued insurance policies for decades that the mere fact that the formal language was initially proposed by the insurance broker would justify departing from the law that exclusions should be read narrowly that they should be clear and conspicuous and that they should be interpreted to respect the reasonable expectations of the insured and in fact the case that the district court relied upon for that proposition is a are you insurance company it's a california supreme court case and interesting lee in that case while the court acknowledged that there might be circumstances where deviation from the rule could be appropriate for example if an insured were not only sophisticated but jointly drafted the language in question in ai you insurance the court declined to deviate from the rule precisely because the formal language at issue was found to come from standard c g l insurance policies that have been drafted and used by the insurance industry for decades so in fact the very case that the district court and defendant rely upon for the proposition that we should abandon contra proffer andon supports precisely the opposite proposition here there's a record reflect that so this forming of mine from submitted by the broker joint negotiation of some sort that would counter your argument i understand the question your honor and i would say in this case no and in fact the drafting history supports precisely the opposite conclusion for a couple of reasons number one it's undisputed that there were no edits that were made to the first three war exclusions war war like action and insurrection made to the fore correct your honor with respect to those three exclusions they are simply identical copy and paste from the i s o form there were edits that defendant made to the fourth exclusion for weapons of war including atomic fission that particular exclusion was not reached by the district court below nor does defendant raise it on appeal so the only edits were to a separate exclusion from the ones presented on this appeal in addition i'd like to add something else from the drafting history  from the record in the drafts that were exchanged back and forth and this can be found as part of the walden declaration this is in volume seven the declaration i believe starts at thirteen forty three and the pertinent part of the draft discussed is thirteen eighty eight at thirteen eighty eight it appears that when the parties were exchanging these drafts there was initially an endorsement form that was titled endorsement number two titled exclusion of war comma military action and terrorism below that there's a roman one that has exclusions for war and military action and the language mirrors exclusions one through three at issue in this case and below that section there's a roman two presumably the terrorism that's referenced in the title of the endorsement that's blank it appears to have been deleted and in a subsequent round of edits that endorsement sheet is removed altogether and the three war exclusions are included elsewhere in the policy and so in fact i think the drafting history of these policies actually reflects th parties knew and exclusion for terrorism would be separate and a possibility it was deleted it was omitted from the policy and that's all the more reason why the rule of contra proffer anthem should not be abandoned here you're down to minute and  involving a political question or a separation of powers issue or any argument about this court interfering in the foreign affairs of the united states the case involves a straightforward application  exclusions an insurance policy war related exclusions that have been in the us policies for decades and have been interpreted by courts regularly in different circumstances let me start with  section sixteen forty four because it is a coverage case and we go right to the statute which says the words have a contract or to be understood in the ordinary in popular sense unless used by the parties on a technical sense or unless a special meaning is given to them by usage so in which case the latter must be followed i read it is that if there is a special meaning that's given by usage then you follow that instead of the ordinary meaning so given that there was evidence presented by way of expert in this case of special meaning given by usage why is it appropriate not to consider that the for several reasons first the courts in california have consistently said that war is to be interpreted according to its plain ordinary ordinary and popular usage that there's not a case in california that says anything the give me a best best california case on that we've seen a countless cases i'm sorry six count second five thirty seven they don't let me ask you go second five one by thirty seven now that case says that  yes it does your honor you for the role of into that kind of case six hundred forty four applies to all contracts in other words it is not insurance specific it applies to all contracts in california just that case talk about sixteen forty four it does not all right well then it seems to me to have no relevance because we're trying to figure out how sixteen forty four supply and why special meaning given by usage is not the key be terminations in determining the meaning of the words in the contract right honor with respect to special meaning by usage i would say another one another point is that the two cases that are cited in the appellant's brief have nothing to do with interpret in insurance language they first of all the first one is a usage that implies a provision that's not in the church the in the insurance policy so the first case they cite is has nothing to do with interpreting insurance language and the second one is we need to resort to case law at all if we've got a statute that both sides agree govern how words in the contract have to be interpreted i think the dispute between the parties is that it's technical or special meanings but the parties have to indicate that our position is the parties have to indicate that they are ascribing a technical or special meaning to it and their position is that they can say later on that there was a special meaning regardless of whether the parties discussed it or had any  apply that the the individual or the entity engaging in the war in the war has to be a quasi sovereign are de facto suffering he does not say that with respect to the war like actions he you know kind of mushes them together he doesn't actually say that that's something for war like actions and that's inconsistent in any event with the language of the war like actions so even if you assume that for purposes of war you need to be  defacto sovereign there there he really did not say that conclusively with respect to the warlike action now let me turn to hamas is the defacto sovereign of gaza and that has been made clear in any number of writings including the congressional research service reports that we've indicated but from a factual basis military force then it became clear to hamas that the united states and israel would not deal with it and so therefore minutes before this war broke out minutes before this war broke out hamas entered into a consensus agreement with fatah where it backed away from formal being in charge of the government nevertheless all of the evidence indicates that from that point forward it continued to be the de facto government a military branch called the kasam brigades which is the military branch that's in fact engaged in this war they had a political branch and a social welfare print branch they ran the schools they ran the hospitals they had a judicial system  those are the military forces that has taught that some use to engage in the gaza war with israel well my question was is there evidence that it was that what you call their military force there for the rockets and  there is evidence of that your honor i can't point you to anything specific in the records but you can point to and i can't john i'm sorry in fact under any any definition it can engage in war with israel and it didn't gauge in war with israel in this particular case hostilities broke out between hamas and israel over the adoptions of  by a military force and so warlike action by military force must mean something other than war by a de facto entity otherwise the two exclusions would be identical in there and  making the took solution identical so what more like action by military force means and if you look at the pan am case they they agree with this it's armed operations of organizations not affiliated with a nation state directed primarily against a nation's armed forces so you have what a nation's against a nation's armed forces so armed operations of organizations not affiliated with a nation state directed primarily against a nation's armed forces and the pan am court the district court made a clear distinction between terrorists and terrorism and terrorists and warlike actions and the pan am court said when this terrorist organization hijacked a plane in london and there were no war war activities going on that was a terrorist act and it wasn't covered by the warlike act exclusions but if those same terrorist organizations had entered into battles with israel bombed israel and taken violent action against israel as hamas did in this case that would be a warlike action believe he explicitly said that and it is against the special usage that they are defining from the pan am case in other words they rely almost exclusively on the  the war like action your honor we believe that this was a war it was a war everyone called it a war it's a war it's everyone understand that there isn't anyone except n b c who thinks that the fifty day war between israel and hamas in twenty fourteen was not a war it was a war if for some technical reason this war things that the war the meaning of war in the policy means something else then add a minimum and must be a war like action because otherwise war like action and war must mean the same thing and then if you look at what went on here this was a war between military forces it wasn't a terrorist act it wasn't a interest military force your honor in this day and age a military force is not necessarily connected to a state and we think because somber gates the military force was definitely connected to  possibility and that would be warlike actions if you go back to the if you're today what is your best example of military force is not sponsored by so over supreme court said that the u s was at war with al qaeda which is on the foreign terrorist organization the mere fact that an entity is on the foreign terrorist organization doesn't mean that it can't engage in  this court in the very engineering or the the dairy case and not remembering the whole name but it had something to do with very engineering held that it also considered to be a con to be engaged in war during the vietnam war even though that wasn't so there there's many examples of civil wars another example where you have military forces that aren't connected with any particular  reviews so you need to look at what's here and make that decision on your own regardless of any errors of analysis that you think the judge may have entered into we've taken you over time thank you very much  you yes thank you briefly addressing warlike action by military force the cases that were cited near the end of the argument in particular this court's i believe international dairy decision actually addressed insurrection when it was addressing the viet cong  and so that case has no support for the proposition that a military force encompasses guerrilla groups or terrorist groups and to the contrary the district court itself acknowledged that dictionary definitions of military actually define a military as the armed services of a nation can you trust councils point with regard to the second exclusion the expert declaration was not explicit like it is for exclusion number one i think for both exclusion one and two may have been correct in saying he addressed both of them and essentially blurred them together he addresses the war exclusions as a whole and what he says is that the war exclusions are treated as applying to  sovereigns and by contrast after nine eleven insurance companies actually draft separate terrorism exclusions when they intend to exclude terrorism by non state and what's the difference between exclusion one and two your honor i think that a war a war like action by a military force could have other differences aside from sovereignty in particular it may reflect the duration or the extent of the warlike actions being taken so for example if the united states military  were to for example proceed in some sort of brief incursion across the border with mexico in reaction to migrants or what have you that might constitute warlike action by a military force but would not rise to the level of a war so the suggestion that sovereignty is somehow the distinction between the two has no evidence in the record and no legal support on top of that within the record and this is volume nineteen at page forty two fifty one there is another insurance policy that was issued by one beacon the parent of atlantic just a year prior to this policy where they actually include a separate terrorism exclusion separate from the war and warlike action exclusion this is at page forty two seventy seven and it defines other acts of terrorism as a violent act or an act that is dangerous to human life property or infrastructure that is committed by an individual or individuals and that appears to be part of an effort to coerce a civilian population or to influence the policy or affect the conduct of any government by coercion or  there were over three thousand americans killed ten billion dollars in property damage due to the war exclusions apply and what he says is that number one the insurance industry as a whole treated nine eleven as an act of terror and subsequent to that a custom and usage arose by which insurance companies when they intend to exclude terrorism will specifically draft an exclusion making it clear and in fact one beacon did just that in this case in volume nineteen of the record at forty court to reach it we think that the record as it stands is clear that it applies to an uprising by civilians for the purpose of overthrowing their own government and that wouldn't apply however we've also indicated to the court that there is additional factual evidence that the district court might be able to consider if it were sent back so we think the record is clear we think because defendants have asked this court to address that exclusion it would be appropriate for this court to do so on the record but obviously that's a decision for this court to reach let me have just one more young question have you ever given thought to sort of find this question to the boys or i've certainly thought about whether this court might be interested in it and we haven't thought of that your honor and in particular i'm not sure whether it's a question that's appropriate for certification for a couple of reasons number one i think that california law under section sixteen forty four is actually very clear and on top of not but we would suggest that because of the undisputed factual record and the absolutely clear law under section six hundred forty four that a special meaning must apply that this court need not certify the question to the california supreme  district court to decide or should you think the record is sufficient for us to decide it without just a court intervention i would say our position is that there are absolutely fact issues when it comes to the bad faith claim it is a claim that we believe a jury must decide in this case and we think that in the first instance it is appropriate for this court to recognize that there are potential factual disputes in particular the district court's decision on the bad faith claim was that because the court own interpretation was reasonable that means there could be no bad faith and what we've seen is that number one that actually is not the appropriate interpretation and number two it's not actually the interpretation that the defendant applied during the course of the