please the court joseph flatfish for a poem sincere international and mr as are many this appeal raises both constitutional in statutory construction issues let me start with the constitutional issue insurance code section rattlesnake coalition case file nine f rd page one thousand one hundred that means that it's been waived for purposes of appellate review the issue was squarely raised in the briefs down below and i would refer the court to the opening motion which is docket i'm sorry the opposition which is docket number thirty one at page twenty eight the issue is raised and then in the motion the cross there across the motions for summary judgment at docket number twenty four  twenty seven and docket forty four which is the reply pages twenty one and twenty three the issue is squarely raised it was addressed by the court but it was raised by the parties and we have brought it up on appeal and it's further of your argument is the facial challenge correct i think it is both it's a facial challenge and it's an as applied challenge all right i have trouble with where you got your eyes as civil to the right of counsel in both the civil and criminal context so it's been recognized by the u s supreme court as well and our position is that there are three aspects of this statute that render it unconstitutional the st is the statutes gone the nd problem is the statutes target the statute invalidates valuable contractual rights there until good bye and completely unrelated to the alleged wrongdoing and that are specifically earmarked for the defense of lawsuits and the  rd problem in the statutes go because california's unfair competition law applies broadly to any violation of any law this statute amounts to an on off switch for the government and the government can it has the power under the statute depending on how it leaves the case to decide whether anyone it sues can have an insurance defense and i think this case provides a perfect illustration of this problem the government alleges that in deer in this resort been violated nine different statutes and regulations are set forth in their complaint had the government filed a nine count complaint against my clients there would be no issue we wouldn't be here today there would clearly be indemnity there and there it clearly be a duty to abandon their insurance defense now for us explain the difference between the facial challenge and as a challenge the face of challenge says the government doesn't have the power to to pass this kind of statute giving it an unfair advantage in litigation as applied challenge says now let's turn to what happened in the specific facts of the case and what happened in the specific facts of this case is after my client received my clients because this statute applies both to businesses and their employees and so one of my clients is mr zork mean individual employee of the company actually tendered that this to the their star for defense star look at it said we find that there is coverage and paid for a year and a half of the insurance defense costs and over two million dollars and would have continued to pay those funds had it not been for the government interfering with the specific provision of the death of the defense in this case by writing a letter and saying you've got to stop that you can't pay this money right so the government in this specific case took action that him due process considerations have only been held to prohibit government interference with respect to a civil litigation in the following situation ability to effectively consult with counsel the amount of time retained counsel the ability to communicate with counsel to build the victim soul of counsel regarding settlement thats it now none of those rendered by an attorney even if those funds are the only way that the defendant will be able to retain the attorney of his choice if i close them and therefore i'm still finding does events and that could very color we distinguish between what's yours and what's mine in this case we're not talking about other people's money we're talking about a valuable contractual right for a defense of which two million dollars was already here and secondly the stine case also involves a similar factual situation to this i am right now i understand that your argument you want to talk about the merits you only have five minutes left and i don't know if i don't go with you on  you from making false or misleading statements in violation of the f a l in looks for an order in joining you from engaging in not fair competition so what it does says you're supposed to do the would you guess there are many situations in which courts order as part of injunctive relief you know that that a party has to take certain actions those actions create costs when i often definitely don't argue that because i know what you're to have to do i read what the order they want it just says do what the law failure to do i don't know what you're getting but we don't know either because the case hasn't been tried right we haven't gone to trial we don't know what the injunction is going to look like at the end of the day they also ask for all other appropriate relief so we don't know what the judge is going to do for and for injunctive relief but our argument now is that the coverage matter is clearly covered by subdivision ebay right and so then we have to turn and look for what happens with subdivision be bright and unlike subdivision a our position subdivision let doesn't mean a flame in which compensatory damages is sought because those are two different remedies when a statute sorts a breakdown on a remedy by remedy basis you have to go along with that same break a remedy by remedy basis so argument is that indemnify and we think it's compelled by the doctrine of constitutional avoidance and then finally we noted that in the broughton case the supreme court concluded that subdivision b was not susceptible to this proposed interpretation that it that i'm sorry that it the trial court correctly concluded and interpretive all see at issue a policy has a conformance with statute provision in it so the question is what does the statute provide insurance co section five hundred and thirty three point five is a statute you have to follow the canons of interpretation for statute the trial court correctly identified those canon and followed each and receive the same conclusion with respect to each of those separate ways of looking at the issue on plain meaning to legislative history and three what is the reasonable practical  common sense way of looking at this problem with respect to the plain language of the statute the issue argued in pre political was a question of defense subsection duty to defend any claim in any action in which a fine restitution or penalty is sought when a governmental entity brings the if there could be any question any potential ambiguity subsection c answers that what is a duty to the fact is the insurers obligation to defend or settle clearly precludes a duty to defend here well if you look at b and you look at the plain language you you laid it out for me but that does save the same in a have to devon a buy or need not indemnified that is or find penalty and restitution and now we've got an injunction it's not in their and that is correct history it's clear that they're worried about having fishable remedies and the right to be able to seek some to me let me ask you a question grounds a law under california law who i knew even need to go to the legislative history if the injunction they could have put it in there they knew how to do it if they want to talk about any claim as they did in b could have done if they knew how to do it so therefore they didn't intend doing them t trying to if i'm to say that he is clear not ambiguous the question we're going to go and it talks about any claim as you say it does then i read a it doesn't put any claim it just talks about any coverage or indemnity and it says the only time you get don't indemnify or you don't cover when it's a bind penalty arrest it doesn't say anything about you don't pay if it's an injunction and it's look at the entirety of the statute and read the words together to ascertain a common understanding so we do i really need to get to that question here because of me that i could look at the insurance do i need to reach the question you want me to read i don't believe you need to reach the question for a different reason right in the underlying at the trial court level dear did not move on dates and then t fight then moved on duty to defend right so the trial court determined that there was no duty to defend as a result starr was entitled to enter reimbursement under a false c s provision so no you do not need to address that question but i that is the term covered broader than term and i don't know off the top of my head if there's any case law specifically on that and i don't want to represent to the court one way or the other what i would say is if you use the context only applies to what you have an obligation to indemnify bracy you can't have an obligation to settle unless there's an obligation under the policy to defy in the st place so if you want if you were to say that  to settle in the absence of statute want to hold a legit wrongdoers person accountable and desire to litigate with those actually responsible as opposed to insurance companies and it's the last part of the puzzle that i think is important and the fans there oh right so are the rational basis standard the question is is there a legitimate basis not whether or not the statute actually is there a legitimate basis there are three i did legitimate based is identif insured says i'm not going to sell the carrier that holds true whether you're talking about indemnity or defense because the insurance going to say look i haven't care you're paying for this i don't where you have the government taking action for violations of business practices been by law it's not a core want just money anything that they possibly could ever want to do is very limited to because if you look at biker contacts there was specific statutes in the medical malpractise contacts that put caps on contingency fees so it's not an hourly rate but is a cap on contingenc you have statutes that cab attorneys you have statutes that have economic damages in the argument advanced there was the same argument of the answer here i didn't get the lawyer that i want to handle the case in the courts look at that rejected be practical inability to settle cases because of a carrier's obligation when it defends when it has to defend it has obligations it hasn't given independent counsel sometimes it has to effect to wait settlements sometimes you have obligations on the insurance company in your sec what a government would like to do government would like to either get the judgment against the wrong or settle on rational basis standard and i think if this court looks at the facts of louise it really highlights this point right in louise the government had a reasonable rational basis for why it wanted to freeze the untainted assets the defendant in that case was accused defrauding the government of forty five million dollars and the government said we need to three years the remaining two million dollars in untainted assets so they're going to be available as a substitute assets in post trial restitution right so the fact that there was a very strong interest by the government to freeze these assets the bring forth said look that's not a not right because this right to use all your available funds to fund your defense is such a poor constitutional counsel overpowered that and so we're not talking about rational basis review here we're talking about is this a sufficiently compelling interest to overweigh that this fundamental right right to be free from the government i've this is this interest in holding wrongdoers accountable is fully protected by the duty to indemnify and it's the same thing with this practical inability to settle it is well established that i've already can find it a defense even if there is no underlying coverage for ind leveling the playing field well that's just ridiculous that the government doesn't have any interest in leveling the playing field against private business is an individual that sues the purpose of the due process rights to protect the people from the government who brings formidable resources and its all of its power when you're a small business and you get served with a complaint like this you you're in panic because when the government comes against you it's a big deal these are bet the company cases and for many people late se bank right in their insurance policy will shoot at least i have my insurance company to protect me right i have this duty to defend and this statute allows the federal government to just flip a switch no more insurance policy and the purpose of th