conferred and we've agreed that i will commence with twenty two or more well that i will commence the argument and reserve eight minutes of my time for about all the please the court these three appeals raise virtually identical legal questions of statutory construction the principle question is the proper application hundred initiative survived its undisputed portions of the one hundred eighteen initiative did not survive and the question is where on which side of the line does the initiatives disclosure and consent consent provision for in forcing a loan contract requiring compound interest where does that fall within their first question i have and it goes to both main questions of state lies why should we certify these questions to the california supreme court we suggested it in our in our brief did you said yes it is the district court and if that's a procedure i'm not aware of it i was not aware of california law and now we're on the peel and the losing party sometimes said comes up and says oh now i'm for certification certification makes a lot of sense to me but i was interested in why the suggestion was and i thought well i  bill to your honor but i'm going to argue as if you're not going to do it just in case you don't do so your clients are in favor of certifying the question i'll ask the other side well that's correct right yes or on the right to run on the merits of the first issue whether the disclosure requirement applies you do agree that the california legislature can regulate the amount of interest charged by insurance companies on these loans absolutely yes your honor and why isn't compound interest just interest and in other words if they have the ability to regulate interest without requiring any sort of special advantage disclosures and the compound interest doesn't take them over the usury limits that's not an issue in this case why isn't it just a form of interest that's subject to regulation i mean i would say about that your honor that the legislature has general powers to do almost anything unless constrained by some constitutional court if the court's obligation here were only to read the read the in acts months and come to its own conclusion about the best reading that's one possible way to read it we certainly concede that but as we emphasize in our briefing and i want to emphasize heavily here today under california law the court is required to seek out if it can and a reasonable interpretation and construction of the constitutional but you said it was a reason of a reasonable alternative tell me why it's the better the better  better construction well i'm i'm i would like to set back and say that's not my obligation because under california law if there is any reasonable construction which allows both provisions to take effect then that is the construction to be a doctor obviously it does have to be reasoned last to be a reasonable reading of the words used and it has to have a reasonable result so opposing counsel and i was pointing to and your reliance as i read your briefs is more abstract statements and pens in or which was in fact dealing with only nonexempt lenders so what's the best support for your position they had exempt constitutional provisions themselves so that i have been there isn't a case that supports you in my in my view none of the cases provide much guidance to the court on this on this question in either way both sides of picked up stray remarks here are there inferential arguments about things but in our view the plain language of the initiative of the i'm sorry of the constitutional provision favors our position and certainly renders a reasonable interpretation of that provision which allows the disclosure and consent provision to account can i work for your your constitutional reading  so i'm looking at the current amendment and your critical language is the paragraph it says however none of the above restriction shall apply for them and your point is that none of the above restrictions deal with disclosure of compound interest is that correct so that we have a constitutional provision we have a new provision which says well wait a minute we're we're doing or we're doing it we have an issue that would cause you to a vision it says we're doing away with some of the initiative here's all the provisions  wording of the initiative that's what they were directing the constitutional amendment at in one hundred thirty four and it's unchanged currently so why wouldn't they have addressed one of the two substantive topics in the one thousand nine hundred initiative if they if the intent was to do away with that case judge you could his question again maybe in a slightly different way is there any case law department of insurance but no no guidance from that department about whether the no your honor and you know i i'm jumping ahead a little bit to what we view as a minor point but you know i in our view when the when the legislature did exempt insurers in one thousand nine hundred one and then passed some of the statutory regulations they did not mention compound interest at all and i mean my worthy opponents argue that the fact that they were broad provisions suggests that the legislature must have thought that there was somehow some kind of field preemption that kind of  idea and so you know we think what the legislature thought at that point fifty years are forty years after the constitutional amendment was an active of little help to anything but at any rate our point is to the extent they did address topics they didn't address compound interest at most that's neutral and arguably that assists our side and i guess i would say the same thing about the department of insurance regulations they have left it alone it could be inferred that they left it alone because the subject of disclosure and consent to compound interest is covered by the initiative you said it here at the outset the case is present virtually identical legal issue so it may be it's not important but what different legal issue does one of the cases present to the other one stand well two of the key in two of the cases only if we agree with you on this i shall question yes and i and yes you're right or so i want to talk about why it's a reasonable interpretation to continue forward the disclosure and consent requirement because it really seems to me that's nub of the party's disagreement so the way we invision it we see no reason no inconsistency with applying the disclosure and consent requirement before enforcing a compound interest alone for a compound interest against exempt lenders while leaving with the legislature complete power to for example prohibit the collection of compound interest whatsoever that would not be inconsistent with initiative and we don't suggest for a minute that the legislature doesn't have that authority the legislature could limit or control the frequency in which the compound occurs it could add any additional procedural requirements that it wanted to impose before on collecting compound interest by insurers or any other regulations of the loans that it wishes to do we don't see anything on reasonable about having this consumer protection requirement of getting consent clear getting clear consent to be to remain on it and it i thrashed all procedural hurdle and then the legislature is free to do whatever else they want to do including as i say ban the collection of  w the disclosure in the agreement to the compounding and under insurance or under california law the agreement includes the policy and the application so  yes i think your honor has described it accurately i have a couple of comments one is i think that the argument mistakes what agreement has to be signed under the language of the initiative and  're now moving from statutory interpretation of the constitutional amendment to a question of statutory interpretation of the initiative and the relevant language for the initiative says that characteriz agreement in this case is the insurance agreement which is comprised of an application a policy so why is that incorrect well i agree that failing green but in our view what's lacking is when have an insurance policy so that their position is that sufficient why isn't that sufficient so first of all first it's inconsistent with the characterization of the initiatives  acquirements stated by the california supreme court in the mcconnell two case not that everything in that case there was and it was not on all fours because it was some fake as is our custom and then there was a reference to ok well this is our custom and here's some follow up but there's nothing like ben let's get to this case we have a policy and an application which together forms one agreement under california law and and the agreement under california law is clear that to your honor it went well i know the language says the provision for compound ing must be in writing but in that case there was no eyes there was no writing that contains the c but i think we need to convert that to well that's not true there were subsequent writings which critical steps in the reasoning that the california report followed in getting from the facts there which were different to getting to withholding it so to see if the initial application in this case said you know get up you know get an insurance contract in due course and read it carefully because you have thirty days in which to disavow it or back out of it would that be sufficient you know the initiative if it's said they'll be a application it signed i don't know that is certainly a much more difficult case for our side well what we have because we have no mention at all but when they get when you get the don't isn't it true that when you get the insurance contract in this case it says something at the like this is a contract read it carefully it applies to you sure but it's but it's after the signature is our point well let me give a comment when i'm trying to figure out is whether or not in your view this is merely a formalistic requirement or there's some substance to it here well i think the certainly i think there is substance i mean i analogize it to federal truth in lending disclosure law where i mean there's a requirement the purpose of the requirement is to protect borrowers and the seem to be indicating that it's not enough for the letter to be there has to be maybe the spirit is not met no your honor our position is that the last part of the initiatives version and signed have an insurance policy whether as i didn't sign the policy itself i mean i don't understand at all whether under california law an insurance contract can be created by a signature followed by contractual provisions that's a separate question we don't know we don't your argument is essentially this is an advance disclosure requirement what if they would be ok if they signed the insurance or green in your view would know absolutely ok your signature is incorporated into the insurance agreement why under judge you could his line of questioning does not suffice all i can say is if one reads the i don't know but it's on a part of a medical we get we get we get to play with your hypothetical contacted backaches k twenty years later the insurer wants to amend the contract and sends a proposed amendment and the presumably everybody would agree originally there was no compliance with the initiative because there was no signature by the insured at all and in my hypothetical their argument i assume would have to go because it's all one large insurance agreement once the insured signs that your elegant amendment twenty years later now there's a signature on the agreement and so now the initiative is meant and  you know the purpose of that is somewhat of an observer but that out of the whole thing strikes me as a little bit of an exercise in absurdity there's no contention in this case that your clients didn't know of the compound interest requirements correct well a signed agreement in that case here you've got when everybody agrees is an insurance agreement everybody stipulates that you're in to green if the insured know that there's a compound  interest provision in it and know that they have thirty days to walk away from it aren't all the substantive goals of the constitutional amendment served i think this is just one of many consumer disclosure statutory requirements in under under both state and federal law which are strictly construed so the answer is no the purpose of the provision is prophylactic and the court in  obviously my opponents disagree but you say it's not it's not on all force and that yes yes we do agree that if i just sent a minute and my remaining time talking about statutory standing we don't think that this court should reach it even if it reaches the substance of it's going to address any remaining issues that come up and then also is going to take our time about i'm thank you first i thought i'd start with the question of certification that you raise your honor we don't think this is the case the needs to be certified well this is an unsettled question of california law is it not i think we would you have you have you can argue cases and you can put together strands but the california supreme court has never addressed this question correct the california supreme court has not addressed the extent to which the questions presented by this case have not been decided by the california supreme court you have to fight me on that that's easy they have not right not that precise question ok but and if there's a court of appeal and publish decision that plainly of statewide concern we have three high powered lawyers here representing insurance companies why not in the california if what's the what do we lose by certifying this question the california supreme court none of these cases are proceeding  discovery they remain alive if the california supreme court tells us to go away we'll be perfectly prepared to decide them so what and we will be deciding unsettled questions of california law so wholly apart from whether somebody should have asked earlier what's the argument against certification other than that you just don't want it well your honor i would say that even if the california supreme court has not addressed this very specific question whether the disclosure requirements in the compound interest section apply following the adoption of the amendment that the other california supreme court precedent on this issue that's an argument about why you should win tell me why what is a matter of good judges we have is we're sitting here in diversity and we have a an important question a california law you may well be correct that if we put together the other decisions in california you come out ahead but the question is why don't we why shouldn't we give i've been surprised many times  certify questions that's a steak or comes out differently than i would it's why shouldn't we give the california supreme court the first shot at making california law in this case what's the what's the policy argument against that well i would say your honor that the california supreme court cases that addresses i think very clearly say that if you have an exam lender that they are exempt altogether from the use realize your policy argument it would be a waste of the california supreme court's time because they've already case should come out yes i would say first of all they've already made clear how this case should come out if you put all those cases together their uniform all four of those cases say that once you're an exempt lender you are exempt from or if it's so clear why did one district judge end up the other way i think it was a mistaken opinion your honor if you look three out of four were pretty compelled by those prior california supreme court decisions and then you have thomas and which is a california  addressed this precise question when i find it hard questioning judge chen is an outlier at this which is still a decision in your case i am saying it's an outlier decision and it would delay the outcome here and then also we have an alternative ground in which all three judges below as well found that even if you assumed the yusri law applied that it was met here so you have to alternative grounds  to keep removing them until we can find a california insured to bring it will be removed i think that once the ninth circuit rules on this i think it's doubtful that he would continue to bring these cases and i do think also if you look at the california supreme court time i think part of what you have here is that the opponents are essentially taking advantage of the fact that the way an insurance contract works is that you have an application which is signed and you have the policy which is not and so in most cases you're not going to have this very technical argument that he's making about that you didn't actually sign the relevant document because there is an actual question here about whether or not as in the skies will address whether or not there's sufficient clarity in the while there's no presidential thing to the publishing it's sort of the supreme court saying we're not quite ready for that to be the precedential law of the state assuming that to be the case doesn't that suggest that there's that this the supreme court really does publication for such easy settled law why do you publish and i don't know the answer you can answers other than the delay so if if we decide to certify the issue we are talking about a couple of years  and and whatever time it takes when it comes back to us one way or the other but other than the delay is is there a reason why in your sense at the answer is clear is there a reason not to certify that's what i would say your honor is that both the answer is clear there is to alternative grounds here that were the basis for the district court finding that the case should be dismissed not just how does how do you reconcile these three law and the amendment but even if you found it applies all of the insurers with the sec exception of northwestern mutual were found to have actually complied with that provision so i put that but there's at least one that has not that's true but i think that all the other courts found it to be quite clear that if you look at california law that the insurance contract more question about certification before you get to the merits how are your delay i think the uncertainty certainly is a big issue if you think about the insurance contracts that are issued in the state and the policy loans that are made each year i think the democrats briefs that came and said that each year hundreds of millions of dollars and policy haven't changed you changed your practices now to disclose the compound interest in the application well one of the points you made that example enters a class should be exempt because of the nature of their business their policy forms are approved by the end i understand that's not the question i  asked you to do your applications maybe the record doesn't disclose this but surely it's an easy thing to disclose in the application form that signed it there's a compound interest requirement provision in the policy that would only apply to policies that were issued in the future but if you look at the circumstances here the policies were issued and then ten years later twenty years later fifteen years later somebody takes out that policy or you were talking about uncertainty in the operation of your business and that's why i asked whether you'd alter your business practices and exactly that's a concern as if you have millions of outstanding policies in california and that all of these people have a right to take out that policy loan we can't go back and say you no longer have a right to take out the policy lo that is in your policy and change the second here's here's my difficulty with the uncertainty argument it assumes you win would you like certainty and lose that that's the other point yes another words if if if we said let's say yes all violates the law i think absolutely the insurers would want certainty and losing as well because if there was some type of you know global fix they're going to try to make for all policies issued in  california and to undertake the type of whiskey that's and if you get to the merits that's my problem with the argument the global fix is easy and implemented today you just put in your applications if there's a compound interest requirement and somebody signs it that solves the entire problem the uncertainty about what your liability or lack of liability for the past really doesn't depend on a certification you're going to have the same uncertainty until we so we decided to what california supreme court decides i think that actually if there was an adverse decision and it became the law that state that ensured could not charge compound interest on policy loans that were that were entered into starting tomorrow they would have to make from my perspective on certain days remains until the state supreme court either adopts adopts or rejects our interpretation but please go on to yours who says ok all right and so as i said  i it's our view that if you look at the cases in california supreme court cases construing the effect pacifically of the amendment on the u three law that the california supreme court cases are uniform and holding that once the amendment was adopted that the usury law is not effective as to exempt lenders and they derive that opinion all of them from the language in paragraph three that says the legislature may from time to time prescribe the maximum rate per annum of or provide for the supervision of or the filing the schedule of or in any manner fix regulate or limit the fees bonuses commissions discounts or other compensation which all or any of the set exempted classes a two places so you have an imperative to where you have the actual restriction on the maximum rate of interest that the nonexempt lenders can charge and then you have again in paragraph three we have this broad delegation and so in paragraph two you're looking at how do lenders how could they exceed the maximum rate of interest and so the court says you know i've got to be able to restrict any types of fees coming patient whatever you're going to charge all of those things  argument i agree that that clearly gives the legislature the power to restrict whether compound interest is charged the amount of it how it's computed but how does it restrict the legislatures how does it restrict the former requirement laura the requirement law nine hundred fifteen that the existence of compound interest be disclosed it's one thing to say i can restrict its amount or its application but where does that language do away with the earlier requirement that it that its existence be disclosed could you also answer my question about is commissions discounts or other compensation all of those are essentially a form of interest if you look in that paragraph where they delegate to the legislature the ability to fully regulate they don't even use the term interest they just use that phrase fees bonuses commissions discounts or other compensation and that start of that that senses the legislature may from time to time prescribe the maximum rate per annum of so in delegating that they clearly understood the interest and compassed all those things they weren't different than interest they are the same as introduction argument compounding is is not self interest as a method so that the interest is deemed to be i mean looking at it from a different perspective the ent deemed to be unpaid interest is deemed to be low and so it's added to the loan principal and then accrues interest and so if i understood the decision in which said this is this is not the same as fees or bonuses or other charges it's a method of deeming unpaid interest payments to be part of the loan so the the interest can be whatever the rate is that can be regulated it's how that unpaid interest is what's wrong with that analysis well the fact that in that section it says that you can in any manner fix regulate or limit those things means that you couldn't regulate disclosures you've got to register bramsen said that the compound interest disclosure was essentially the same as a truth in lending act requirement so that's a prescription about how you regulate that aspect and i think that can i should like that's why i'm in your response to judge you could as questions helpful i think you could make a good argument that you just to be generous yes gets the gets the ability of the legislature to let the insurer regulate let the legislature regulate compound interest my question is separate where in that list of various things is the word disclosure i think that's what judge chen was i think getting yeah you're saying what this all gives you the ability to regulate compound interest and maybe it's a fee maybe it's a charge maybe it's a method you can regulate that but where is the exemption from disclosure of it's existence if you if you give the legislature the ability to fully fix or regulate that would include the ability to regulate disclosures and if you look at one of the things we pointed out isn't anything on disclosure is as hurwitz points out and certainly you could require disclosure without having a direct conflict with that language i why when we try to preserve that well i think that itself said and what carter said is that by giving the legislature and then the district court decisions as well said once you give the legislature the ability to fully regulate this field and which mr branson conceded in his argument here today then that is inconsistent with continued regulation under the usury a lot self and if you look in carter what happened and so base of the carter said is once you give the legislature the ability to fully regulate those exempt entities are subject to lot or anything else and in carter you had these personal property brokers the facts of that case and the legislature had stepped in and adopted a regulation that applied to personal property loans under three hundred dollars and the entity there and made a loan over three hundred dollars and the court the supreme court said well sadly this person is not subject to any regulation whatsoever now that the now that the and then it was adopted and if the legislature didn't act and then that example and lenders are subject to no limitation at all and so one of the things you see here when you go when the legislature and acts when it designates insurers an exempt entity i immediately thereafter set forth in a comprehensive policy in one section i think we're taking you into your co counsels i thank you it sees the court good morning your honors so this case would require us to read the usury laws so that exam does not mean exempt and in any manner six regulate or limit does not mean in any manner and furthermore it also requires us well in any manner fixed regulate or fixed to regulate what that's the question isn't sure it's the question to regulate loans and interest well  what what's the language of the of the constitution does it say regulate loans or does it say regulate what it says if we're going to just if we're going to bear we're going to bear in the language it's focus on what  don't i'm arguing the contract so i have the language from the exemption for the contract but it says in any manner fix regulate or limit limit what that's my question it follows the fees bonuses commissions discounts or other compensation which they may charge or receive so i have no doubt that that the legislature can a conflict can regulate compound interest the question is whether this language says they can regulated regulate the requirement previously imposed to disclose its existence sure so when you have the opportunity to regulate what is charged or received certainly compounding interest is a charge that is received by the insurer no i have no doubt that compounding interest is something that can be regulated i have a question i'm asking is why should i read this as i'm exempt would have to mean you're not exempt you're not exempt from everything even though you're exempt person you're still required to for not exempted from the whole series of california laws for example they're not exempted from from laws that prohibit murder or extortion now so the only thing they're exempted from are the things that are listed here and so tell me why those things that are listed can do all sorts of things with it the one thing you can do is take away the initiatives requirement that you notify somebody in writing and have that person sign the writing now would get a letter whether such a thing exists but you're arguing that there's no such requirement sure there is in part because the actual language says the computation is a it's a full sentence that we've taken apart of a full sentence out and said that somehow that full sentence still requires example lenders to comply with the statute when the full sentence says and complication of interest upon any bonds snow or other instrument or agreement interest shall not be compounded common nor shall interest their own be construed to bear unless an agreement to that effect is clearly expressed in writing and signed by the party charge to their together that is a single requirement it is one sentence it is a restriction on nonex planned well but how do you get there other than just saying it i mean there's two separate requirements in that sentence if you if you if you don't this if you don't disclose you can't have it right which is fair except for you have to ignore the exemption which says exempt persons of this this statute allows the legislature to exempt persons and persons and corporations are required under this statute to comply with all of these provisions the sections one two and three so that you have to say when the we say exempt we don't really mean exempt we mean something other than exempt and you still have to peaceful parse through each and every one of these sentences to figure out even though we sa legislature allows it but you still have to disclose its existence i actually think the plain unreasonable meaning of exempt is exam and that when the legislature has the right to in any manner fixed regulator limit and exempt lender around its lending habits and how it lends to its customers it really means that the legislature has the full extent of that authority and here took that authority you want to address whether the policy in the application for one agreement or whether it's necessary for the policy itself to be signed so in addition to exempt not being exempt and in all manner not being an all manner we also have to ignore the statutory requirements of insurance co one zero one one three which says specifically that applications which are signed  are made part of a written agreement for insurance judge to never addresses one zero one one three it's a huge hole that leaves that opinion uncertain as to why an insurance contract that is fully integrated and signed is anything other than a fully integrated i think what judge can says to be fair to me doesn't ignore that argument he may ignore the specific provision he says this is a requirement of  like the truth in lending act and we want somebody to know before they enter for they have a binding agreement that there's a compound interest requirement in it and therefore we want a separate writing constitution  a separate writing signed by signed by the person to be bound why isn't that a reasonable reason sure because it's not in the statute the statute doesn't say you have to have a separate contract that would be reading into the statute something that doesn't exist does that mean that it has to be contemporaneous with the loan its first unless an agreement to that effect is clearly expressed in writing and signed by the party to be charged there with the only requirement only compound interest requirement here is in the policy right it is in the public policy is not under california law the application is incorporated into the policy fair enough but is the policy signed by the insured well the statute that the policy if it's not signed by the insured meaning if the application is not incorporated and signed into the policy we don't how apollo no we haven't yet remember so we have california law that says we'll take one signing and in court and incorporate the agreement into the other that's fine that makes perfect sense as a matter of contract law but you do agree that the application is not signed by the party to be bound the application is signed by the party down the statute says they're one contract and the contracts themselves integrate the application into the contract when you are delivered your policy you are delivered with your policy a sign that the cation which isn't or sign it and the terms of the contract themselves provide that this isn't an the case when hundred eighteen was on our show we've been looking at what that that the people who wrote initiative i guess as a public initiative were contemplating a subsequent statute that says the policy  the application i want one agreement you know what the state of the insurance industry was in one thousand eight hundred i'm not sure that i have that rich and knowledge of insurance history well i do have a fairly rich knowledge i know that the statute that does incorporate the application is effective as of one nine hundred thirty six so it's longstanding been the practice of insurers to incorporate the application and we can't just add compound ing signs an application that says i agree to a contract that we subsequently sent to me i applied for a contract will be subsequently said to me and and i also agree that this application will be incorporated into the contract and the so my question first yes it does in that pure put aside the insurance code and everything else we're just dealing with a regular lender who says somebody says i apply for a loan and then they send back the loan with a copy of your application inside of both parties the terms of the contract allow you to integrate all of the provisions and make it one integrated signed agreement and the temporal piece that i think is important and what your question speaks of is did you have in writing a signed agreement that provided you was notice of compounding interest before you took a loan unlikely connel where there may have been things after you took a loan this is before you took a loan and if we look at each of plaintiffs they took their loans twenty four years mr luzhin took his loan twenty four years after receiving a contract which on its own terms and by law now had to have a ten or thirty day disclosure where he could sit with his signed integrated contract read all of it as the contract requires and still and still take it and send it back and say i don't want this contract so he had full and complete notice ten days to turn the give you a couple of that's for repo pray for you like to answer the question regarding the regulation of compound interest and how it's in conflict once we establish that the legislature may in any manner fix regulate or limit compound interest the question becomes does any other provision of law conflict with that and if it does and the provision of the of the of the constitution allowing the legislature the authority to in any manner affects regulate or limit says the disclosure requirement is no longer applicable the question your honor is whether that's a question that's the question i'm asking so it's can you can you answer that question well it's answer that question the policies provide policies that are improved by  insurance department provide for the disclosure of the legislature every enacted a law to do away with the disclosure i think the answer is easy it's no you have arguments about why other laws make it make it an applicable but the legislature never sought to regulate disclosure here hasn't well i'm not sure of the answer that but i think the question for this appeal your honor is not that well but can you answer my question has is there any california law and acted by the legislature that says any of the agencies that have authority over insurance and there is a disclosure is required are there any guidance documents or regulations so that effect regulate this field so my question is has it ever regulated this specific requirement and i think your answer is no but if you're arguing that it doesn't matter once they exempt the insurance agency it's exempt a company insurance is exempt from everything so it doesn't wrap it up because yes i may run a fundamental issue that i don't think has been brought out yet is that section two of the usury law is not simply a disclosure requirement section two of the usury law prohibits the compounding of interest unless there is an agreement in writing signed that would be inconsistent that is inconsistent with the legislature having the sole power to in any manner regulate compound interest one example is this opposing counsel said that section two of the usury law would be consistent with the legislature banning compound interest that's not true section two of the usury law says that lenders may not charge compound interest are prohibited from charging compound interest unless they have an agreement in writing that would be inconsistent with the legislature prohibiting compound interest absolutely it would also be inconsistent with the legislature having the sole power to regulate any matters such as providing other methods of disclosure such as annual notices that don't need to be signed or other methods and i already have your argument thank you i'll give you  regarding incorporation of the application into the insurance contract but importantly what that statute actually says is if the application is attached to the policy when it sent to the insured then the application becomes part of the insurance policy if it's not attached and it does not become part of the contract of insurance and the reason i think that's one three points but in each plaintiff's case the application was attached ok so why does it matter what happens when it's not well for one thing it answers the question raised by a judge a khuda which is is there an insurance contract if there's no sign policy because the legislature says there is an insurance contract which is contained in the paul it's the policy terms but there is no application signed or otherwise do further doubt on the argument that the disclosure and written consent requirement of the initiative can be met by the sort of larger insurance contract argument because it would mean that it depends upon compliance with the initiative depends upon whether the application was attached to the policy or not i'm looking at the statute and they say i guess unless the same are indorsed upon or attached to the policy is that one zero one one three is you what you're referencing just how do we know what our endorsed upon means i believe it means attached but well they say are endorsed upon or attached so i doubt that it means attached it must mean something else i apologize i'll be on the campaign to have a good work backwards we have a nine hundred fifteen initiative which is just read to you which says whenever we're trying to figure out when wet weather contract is signed in lease an insurance field we will incorporate the application into it as long as it's given to so why isn't that wholly apart from what happened in one nine hundred thirty for simply the legislature amending prior law to provide for disclosure because under california law the legislature cannot amend or modify a people's initiative  determined by california law like a contract formation issue under california law so california law will tell us what an agreement is and here it's by combination of a common law and statute so i don't understand how that the tracks from our interpretation of this initiative well i agree that the question of whether there's an agreement as determined under california law i do agree with the court on that but what our point is is agreement for what and well could california could the legislature have said this year we've entered the digital age so an agreement in writing is now pushing the box on your computer that says t i'm sorry planing explain that i don't know if it's more difficult but you know i would just i would go back and say that the language is an agreement to that effect and that is what is supposed to be signed and if that can be met by any subsequent signature so in my in my hypothetical example twenty years later there's a signature on an amendment to the contract that complies that really does not seem to be consistent with the obvious intent of the initiative which was you put a piece of paper in front of the borrower before they enter into the the transaction and say we're was serving the right to charge you so i don't see how your hypothetical help here well i don't have the or if the original application was inside and i would say there was no grima but you could see if they if the two parties acted as if there had been an agreement a court might subsequently say this constitutes an agreement be right back where we are right now the subsequent document wouldn't create the agreement it would be by force of court decision well you're right there might be an agreement another covering all you can have contracts that are signe but there would be an agreement but there would not have been consent in in writing signed a written signature to it which is the requirement of the of the initiative i see forty seconds if there's any other questions i would invite them appreciate your argument thank you very much and  thank your honour's with respect to the signature issue as was pointed out before the application for the policy is the way that policy honor signs the contract that is everything that's all terms that are in the court decision boyer from one nine hundred twenty nine i believe that said the policy and the and the application together constitute the contract the birth case for one thousand and thirty five said the same thing this court so that it will only get to that issue if you're not exist entirely so so again let's address that in the context of of a of a shady payday lender who says i will agree to give you a loan on terms and conditions to be specified later if you agree to that sign here and then you get the loan later and it has compound interest it and they're not exempt your view is that because the application and and the application on it says this will be incorporated into the contract in the contract says it's integrated i asked one of your colleagues question my interest in your answer and then you think that complies with the initiative i would not necessarily say that complies insurance is special that's why it's exempted that's one of the reasons i know that you're feeling elated i missed need to assume you're not exempt for second if you're case law saying that in these types of agreements and these applications together constitute a contract and there was an insurance code or i guess a statute that also said that same thing then i think we have a very similar situation to that we have here with insurers but i do not believe that's the case insurers are special they're comprehensively regulated by the legislature which is one of the reasons they were exempted and again i just want to stress again your honor one more time if i may section two of the usury all is not a mere disclosure requirement i substantive prohibition on compound interest unless the agreement is signed in writing that is in conflict with the one thousand provision of the constitution it says that the legislature may in any manner fix regulate or limit compound interest the legislature could not outright ban compound interest if they were subject if insurers were subject to the section two of the usury law so the legislature cannot have other matters of regulation such as for example disclosures that are not signed which they clearly are permitted to do under and the case is martin's the metropolitan life insurance which have the northwestern it's real life insurance and you vs new york life insurance are submitted thank you we are adjourned for this