the morning in may it please the court i'm jeffrey erlich for the portent i've requested four minutes for my rebuttal i think this appeal requires the court to make two fundamental determinations the first one is whether exclusion q one in the ace policy has a single clear unmistakable meaning that bars coverage for the ports claim if so then you'll just affirm the judgment and you don't need to get to the second question but if you find that there more than one reasonable way to construe that exclusion you do have to reach the second question and the second question is whether or not the port has advanced an interpretation of the exemption that is both reasonable and that takes the claim outside of the scope of the exclusion so i'll turn to that first issue first i don't think that there's really any dispute on this record that exclusion q one is not subject to a single clear unmistakable meaning given it broad language or to phrase it slightly differently i think the exclusions phrase so broadly that you can't read it literally because if you do any overlapping fact such as just the existence of the port i trigger it and so you have to draw a line somewhere it has to be cap and castle in your statement of the questions would we not also if we answer your first question in your favor don't we then have to ask whether hew to mars coverage q to be integrated into related wrongful acts yes but i don't think i haven't i don't think that it does because it requires that requires more than one wrongful act and i don't think there are is more than one wrongful act allege certainly not with respect to the misrepresentation claim which is based and i'll get t couple concepts of insurance law that i really think are critical that the court has to apply wallace analyzing this case counsel let's go to let's go straight to q one and tell me and tell me why this language stop first of all you've got to read the whole exclusion and so the second clause well all right well let's let's start with that so if i have if you're telling me that i have to read the rest of the whys otherwise it won't be clear is it clear up to that point if i if we stop right there well do you have a case yeah i think we do because you still say it's not clear necessarily what it means about this the string of synonyms alleging based on arising out of her trip direct well i understand that the ports i mean the the insurance claim is that it was very direct but in our view i don't tell me why it was not direct had to be absolutely the direct consequence of the earlier three earlier actions about whether or not this was or was not a public works project right it is clear that the way that the court argued in the earlier proceedings forgive me but just so you have the benefit of what i'm thinking to be able to respond the point was arguing that earlier proceedings you know if that's if that's the ruling there's going to be more litigation and clearly there is a a a logical or a connection but for connection that that the determination of the why isn't a whole lot more than before because the the  issue in the phelps case is whether or not the port made false statements knowing they were false at the time it made them and the the determination in the prior action in the administrative action didn't deal with the statements at all or their tru their falsity it dealt with the financing mechanism and whether when you get right credit it's not that obvious just had to do with whether the port was wrong whether they told whether they told the contractor gave them a bad advice whether it was legal advice or whether they were being deceptive at doesn't really matter i don't think they're being deceptive i wouldn't peut that to your client that they got a legal opinion or something and they misjudged it and went to the court and the court said you're wrong our view is that that one reasonable interpretation and again i don't know if you're drawing lines if the point where you say we can't construe this exclusion according to its plain literal language because to do so is too broad then we have to cabinet in some way means also what you're really arguing is not and it seems to me is not ambiguity of q one but how it's applied to particular facts and those are two different things you might have an exclusion that says you know if it's a defamation claim and there's nothing in vegas about the app that there might be a question as to whether a particular action really is a defamation claim so i'm not sure how your argument really is about ambiguity well i guess the best analogy i have or maybe the there with ration i've got is the california supreme court case in mccann it you've got a very broad pollution exclusion that basically do covers dispersal of irritants or contaminant and in that case a landlord hires a pest control company to spray this apartment building for yellowjackets and as the course of the spraying unfortunately one of the tenants is overcome by the fumes and dies yes council but in that case there was a really really broad exclusion just like we've got a really really broad exclusion there right yet in that case there was a fact pattern where where the edges of that exclusion the grey area were implicated and it seems to me in this case there's a very broad exclusion and the jet just quite recognise that and fought the fact pattern here given what we've just discussed which judge judge by was just discussing that had just landed smack dab in the love it i think the point that i'm trying to to express  and not doing as well as i need to i would concede that there is a way maybe multiple ways to construe the exclusion in a way that bars coverage i get that i'm not saying there's no way to construe it  on these facts the question though is is there a reasonable way some other reasonable construction which doesn't bar cover what would that be the one that we're advancing which would be that you imply a gr amen requirement in this exclusion as a result you look at whether the gravamen of the prior action and the gravamen of the current action sufficiently overlap and you think that's not the declaration  public works project absolutely not the gravamen of the prior action is whether when you fund a project using tax credits does it trigger california's prevailing wage law and the country and the current but the context and that the consequence flowed from that was obvious that that may be your honor but that wasn't what was at issue in the first action in the second action the question is whether the port engaged in conduct that was wrongful with respect to phelps weather is misleading and so you have essentially what we're saying is that the fact that you've got a good argument there's no collateral estoppel but but the but the connection between the two suits i mean the one follows as obviously as you know knight happened and in fact they're there for attributable to at a minimum there argues the fact that the fact that the two proceedings might have had different legal issues doesn't mean that it wasn't the same thing in the course of any litigation there will there may be multiple issues dealing with various statutes or equitable doctrines and so on the resolution of any particular issue then may not have a consequence in subsequent litigation again you don't have a collateral claim here certainly but there is no question what was at the heart of this thing did did sit did the port authority give the contractor better advice because i thought that this was not a public works project i don't know if you were referring to the original the wrongful conduct whether the wrongfulness of the conduct was addressed in the prior proceeding in every other case that we've been able to find the deals with this kind of exclusion it's the same course of wrongful conduct except that's not the  as it says the same or substantially the same wrongful act fact circumstance or situation so it's not limited to the wrongful act you're on i think it's reasonable to construe that allege the same theory because it is trying to say if it's the same situation that's being addressed by that the prior litigation that's why it matters it seems to me well all i can can say is is that in our view the original litigation didn't determine the wrongfulness or even address in any way whether the ports claims to the contractor were wrongful or or misleading at the time that they were made this the first question dealt with the very question municipal law under california law and whether or not this project was a problem so i suggested that the first that wouldn't be collateral estoppel to the second it certainly would have been race judicata but as at least one very critical question it would have been collateral estoppel wouldn't it on the port authority would have been collaterally a stop from denying that this was a public works project and that the contractor was liable to the to its employees for additional wages yes but dumps could have on its own could have looked at the the law and decided you know we think  and the negligent misrepresentation claim to have had this prior proceeding like that that the ace makes it appear as though it was a condition proceed and couldn't have there had to be a prior proceeding in order for this this other claim to go forward and that that is how it worked out but that wasn't the only way it could have worked out and so in our view you shouldn't apply a a prior proceeding exclusion that deals with wrongful conduct if the wasn't addressed in the prior proceeding that's really essence of the case did you want to save some time for i should thank you you thank  police i think the court understands our position it obviously begins when the port purchase the policy it was already in meshed in a lawsuit over whether phelps would prevail in wage wages at the ports point and it's not a novel one when you look at the cases construing different language under problem against exclusions half of them talk about the fact that red overly literally it would encompass too much and so it's a perfectly well acknowledged point in the case law in all the cases none of them say it's therefore not enforceable you know unconscionable or something all of them do exactly what the district court did here is turn to the facts in front of the court and say whatever the outer limits the margins of the broad language edges the boundaries do you have to just line up the cases and figure out which ones fell in and which ones fell without or is there stronger case all that really speaks to that border identifies well i don't know about the border so much what i would say is the case is d consistently described this language the heartland of the language which is what we're concerned what i think we're concerned with here in the heartland of this language is the causal connection and the case is referred to in a sort of court read into a proximate cause of connection which of course makes sense he wouldn't have causation without some sense that lawyers are familiar with the proximate cause so where there's a causal connection between the prior lawsuit and the current lawsuit that satisfies the exclusion you know whether there's another connection another type of situation you know there's there are cases that go the other direction and you would look to those maybe to limb the the edges of the boundaries but we're not talking about edges or boundaries here we're talking about the dead square center of the exclusion which applies by its terms in at least two respects first to it's based on arising from or attributable attributable to the prevailing wage litigation itself in the sense that if else had won that suit and was not liable for prevailing wage misrepresentation there'd be no lawsuit in that respect it's also not just attributable to arising from or based on the prior litigation but it's also attributable to arising from or based on the same facts event circumstances  situations again because it's the establishes the essential fact circumstance or situation which is that the prevailing wage law did apply contrary to the ports understanding the only thing i suppose i would say in addition is in response to the point on the factual overlap and just miss the causation point i don't overstate it and say that you can have causation with no factual overlap but it's not driving that it's not typically about the causal connection it's about how much of the facts were overlapping so you just kind of looking at the wrong thing you're missing what's most fundamental which is the the causal connection and i think for that reason second i would say it's not used in the case law we just haven't seen that in the california case law the answer to case law cases from other jurisdictions that use  understandably if i'm familiar with a slap litigation that uses them the government has don't think it's a particularly satisfying way to think about what was going on in some prior case to grab them and has led courts all over the place in the slap context i wouldn't  places as big as nine hundred thirty nine forty seven forty nine what they're really saying that has to be the same wrongful act that's the focus is that the prior case has to alleged involve the same wrongful act as the current case they say that again and again and we just know that that's incorrect based on the language of the exclusion it says wrongful act or fact circumstance or situation which clearly as judge great reporting now is intended to broaden it beyond wrongful act how far exactly how broad what the exact meaning of fact is what exactly what differs a fact from the situation i think there's some logical intuition there but that's those are questions for today because this clearly involves for the reasons i've said the same fact situation  circumstance i e the application of the prevailing wage law and it goes beyond the same wrongful act which is the heart of the argument they're making on appeal it has to be the same wrongful act that's not with exclusion says the plain language clearly applies here as the district court said and that ruling should be a you with a great deal of grace counsel then the best i can appreciate the point that i think is really i think this is vital and counsels as well assess same wrongful act but then it goes on to say factor circumstances cetera so he's asking you to say so it's all the same thing that's the point that we're trying to say and why my son the boy i wrote it out phonetically but now i don't know looking at it the use of the same what do you mean it's all the same thing when a reasonable insured a lay insured act circumstance or situation it's all the same thing it's different words used to express one idea and the reasonable interpretation for a lane short is wrongful act it all means a wrongful act and so a but since the prior action dealt with a financing mechanism that and the case against me now deals with whether my state might want to slice of the wrongful act deeming this not to be a public project and that would affect both suits that that would be at the heart of bo i answer is in the first one it was simply the only consideration in the first question was not any statements made by the port but simply the way that the financial mechanism operated and whether it was a public work or not and that the answer that the court confirmed it but it was the public works statute that determine whether it was a public worker not not not some anyway i i i think i ventilated the issues as well as i can