various claims under the unfair competition law we read that in our papers and i understand that his wife will address that in her argument so i would like to proceed directly to the bait and switch plates i will first explain how the court erred and i will explain why it is so important now ls w used an illustration here that was misleading as the both the guaranteed interest that would be paid and or max charge but in reality the policy as delivered has several other substantial fees the statement that there is only one policy fee is simply a lie there's no getting around it and in fact the district court's decision does not even mention it even though it was one of the plaintiffs central claims as for the guaranteed interest the illustration plainly suggests that the policy credits guarantee the interest of either two or two and a half percent but that is also not true in response l l stub argues the proposition sixty four's reliance requirement eliminates liability for a bait and switch if the plaintiff is told the truth before committing to the purchase that very argument was expressly rejected by the california court of appeal in veera the banana republic decided last december and discussed in our rule twenty eight j letter the era follows the california supreme court's decision in tobacco two which held that the reliance requirement of the u c i is satisfied if the misleading the tiriel was a substantial factor in causing the plaintiffs decision to buy the record then hel that the substantial factor test can be satisfied if the consumer sees the bait and then pursues the transaction even if the consumer is told the truth before he got the  this is in this case is a little confusing because it's procedurally is a long procedural history but the bait in that you're talking about is what exactly the policy oestrogen illustration what unit in the concentration is is it in it has a listing of how much that that how much you'll pay over time but that fear that is disclosed is only one of several things there are other fees that are not disclosed and they are disclosed in the actual policy i actual policy as are you arguing that reliance is necessary well it is necessary that for the named plaintiffs that the misleading material has to have been a substantial factor are so would you disagree that the district court's finding that the name clamps worked closely with independent financial hires or centrally educated themselves on the policies features that tends to negate the assumption that any misleading element in the illustrations was a substantial factor here that compelled them the players to purchase these policies no you try to tell me that there was no testimony that  the plaintiffs were given the amounts of the fees there was testimony from other writers a lot of testimony though that they were they work closely with independent financial advisors yes but that doesn't mean they were given the information about what the fees were and the plaintiffs testified that they thought that all of the fees were rolled up into the the numbers that were shown in the illustration and there was no testimony that's contrary to that and i would point out also that the district court did not rely on any such disclosure the district court relied solely on the fact that the information was found in the policy it a similar question but with respect to the monthly administrative charge action if we conclude that the district court clearly erred in finding that the illustrations that we would have to remand this claim to the district court to determine whether this member representation was a substantial factor be if if your honor is asking whether with respect to the reduced or if i can ask you about that expert because i think your primary challenge to the district court's judgment with respect to the class claims is that you are setting  be let me just ask and you can tell me if i need it with respect to the class cames appears to be that the discourse should have given more weight to the expert your experts the statistical analysis and just trying to figure out how we're in a position to really question it seems like are we compelled to give the district court substantial deference with respect to its address and yes this court does a difference i know but i think several things should be kept in mind first the district court either misheard or misremembered testimony the district court found that  had testified that he did not look at labs rates after year four that is in fact not the case he was only asked about the first four years second the finding with respect to on that credibility issue concerned a background issue it did not relate to his analysis of the monte carlo simulations so did not affect the core of his analysis third the district courts it's not clear to court thought that the credibility issue was fatal to all of the testimony and in fact the only issue that the district court specifically relied on the credibility finding for was that there was no statistical evidence that the policies were lapse prone but as we've pointed out the just the courts definition of what was a lapse probably this was flawed because the court said you needed to compare the lapse rate or the propensity to la of these policies against other policies sold by other companies and that is just simply not relevant to the claim your honor if i may though i would like to go back to the bait and switch clean  identifying class members will not defeat classes of patients or simply no requirement that there be a feasible way to identify class members now ls w claims no is irrelevant because this is the district court rule i don't a predominance analysis instead of an ascertain ability analysis but there are three reasons why that is incorrect first if reframing the ascertain ability issue as a predominant issue could defeat the same you analysis then it would have no meaning at all because you can always reframe yes attainability issue as a predomina views argument was expressly rejected in sandusky v wellness centers l l c and and a circuit case cited by relied on viber saying you know which rejected exactly studies argument that because rule twenty three b three asks whether quote the questions of law and fact common to class members predominate over any questions affecting only individual members close but so it takes class membership as given and then asks whether the issues are common or whether they're individual you're at three minutes and fifty two seconds i don't know are you into his partner's time or is that just it please the court vivian watching on behalf of the california attorney general and the california surance commissioner as a maccie curia i the attorney general and the commissioner are here commissioner are here today because private consumer actions are critical supplement to their consumer protection efforts private plaintiffs may bring an unfair competition law claim based on the violation of almost any statute and the illustration statutes do not fit within the narrow exception to this rule that is because private actions based on violations of the illustration statutes do not raise any of the practical problems that were discussed extensively and led to the decision today i'd like to do two things first i'd like to just emphasize that this court's decision in chad nurses united of omaha life insurance company is exactly on point and its approach should be followed in this case second and i'd like to address the arguments that alice w has made about the do have an idea how many states have it so the model act i believe was finalized around one thousand nine hundred six or shortly before that and california actually adopted its own version and base pretty much on the model  have unfair competition laws that are similar to so most states do have some unfair competition law california is fairly unique in having an unlawful prong of it's unfair competition law that  in terms of illustration statutes being you see all predicates probably not a lot because most states don't have this this unlawful problem so you take issue with the district court's decision here on the illustration sta write and tell us why i mean the simple straightforward way to guess the primary reason is because the california supreme court has been clear in many cases that you can bring a u c l action based on  violation of any statute unless there is an affirmative prohibition something on the face of the statute or in a court decision by something express that says a plaintiff cannot bring an action based on violations  statutes or if there is a safe harbor which isn't relevant here do you understand that that is that you or your understanding that the district court held that you could not bring a u c l action if there was no private cause of action under the illustrations she is correct that is what the district court said and it just gets the standards wrong you don't look to see whether the statute authorizes expressly a private cause of action instead you look for whether there's is a bomb express bar exactly and you know this is the case in some other cases in california correct so rose versus bank of america versus superior court the two most recent cases but if you go back it's also from all of these cases say that you can bring a u c l action based on the violation of any statute unless that statute has something affirmatively prohibiting private action in the relief that you can get under the u that they could get the restitution that most plaintiffs i would think would seek for violations of the illustration statutes is to have their their premiums and all the costs that they've paid to the insurance company to have it back so again i just like to emphasize that if you look through the illustration statutes one zero five zero nine point nine five zero two point nine six five there is no provision that says that private actions are not allowed and the allowing third party claims against insurers for bad faith actions so merari should allow talks about how it would create a conflict of interest for insurers because they had judi's to both their insured party and if private actions were allowed for third parties to the third parties and i talked about multiplicative litigation and a lot of uncertainty a lot of courts were struggling with how to apply the rule and none of that is present here thank you thank you thank you i'm sorry i have the same called i think some members of his own have may please the court my name is no levine and i represent the defendant life in terms of the southwest after a three week trial in which both the jury and the district court heard from claim so these were but to be clear all of the theories of the claims overlap so they were the same theories on the claims except they were brought as both fraud claims and as you see zero point after the jury returned that verdict so quickly the district court wrote a seventy one page decision rejecting plaintiff's u c l claims that decision includes approximately forty pages of extensive findings of fact all of which more than adequately dispose of plaintiff's claims in this case and include credibility findings about the expert and include credibility findings about the clip about the plaintiff's claims saying that when they made contemporaneous complaints about their policies after they had been in the policies for more than a year they didn't raise any of the issues that they were raising in this case i wanted to save you that little shock about some of the questions we were discussing with your colleagues problem we've heard a little bit about that but that's a little distinct here in california based purely on a statutory violation is there still actual reliance required on that yes if the nature of the claim is one about a deception or a misrepresentation and that's actually spelled out very clearly in the banana republic versus veera decision that they brought to you in their twenty j letter and it line of cases that you cite are limited to those u c l claims based solely on a fraught theory involving misrepresentations to consumers as opposed to a statutory violation and unlawful california supreme court has dealt with that i would refer you to the kwikset decision and i think it's specifically either footnote eight or footnote nine of that where it walks through this specifically and it's all discussed in the banana republic decision which they filed as a j letter it will get you to the right part of kwikset if i got the footnote wrong but it explains that as long as the claim is one that is in the nature of a deception or misrepresentation you do have to show that and i'm glad you pointed me to the argument that the california attorney general is here to make and they're making about the illustration statute because what i wanted to say is that i think on the air actual claims the district court rejecting the claims the class claims the individual claims there are multiple findings of fact throughout for example and i'll come back to those when i want to but i want to address i want to stay on the illustration statute first i think the plaintiffs have tried to pull out three legal issues and portray this appeal as if it's really about three legal issues when we don't think it is we think the district court got it right on these issues and we also don't think that any of the matter i actually don't think you need to wade into this u c l issue at all and i'll explain why as we've explained in our brief the court said that just like the junk decision from the california supreme court which says just because you can't bring a u i p a claim as an unlawful pronk claim you still can bring it for all other sorts of reasons you can bring it because it's  lawful under another statute you can even bring it as a fraudulent prong which is exactly what your question suggests your honor they could have brought all of these claims as fraudulent prong claims because in fact if you look at the purpose section of the illustration statute subsection nine fifty that's what the statute is about it's about preventing people from being misled by their sales illustrations he said you can bring those and guess what they did if you go back and you look at the record i think it's record of section for sixty four dash thirteen that's the third amended complaint in which they set forth the illustration statute claims that they wanted to bring looks through them every one of them except for a few are theories that they actually brought in this case it's about how the illustrations were incomplete or about how things weren't described correctly ok let's wait just a minute short if we assume that that we agree with ms one that the that under california law a claim can be brought under the u c l a u c l for violations of the illustration statute and that the district court erred when it's sad that there has to be a private cause of action under the illustrations to you then we assume that that is correct in the district court here and then your position is that  there claims under the against under the illustration statute sumed in the other rulings of the court essentially is that it's kind of it's two part i do want to speak to whether i think it's the district court got it correct but let me tell you my argument on this it's really two part number it's that the district court gave them the opportunity to try the same theories under alternative ways under the u c i itself they could bring it as an unlawful prong claim for violation of section three thirty of the insurance code but they also could have brought these all as fraudulent prong claims because the ultimate claim at the end of the day when you say an illustration didn't comply with this it didn't describe this perec lawyer violated this part of the  were allowed just let me get back to why i actually think that just because of the reaction we think the district court is correct we think the attorney general is just wrong when throughout their brief they say that the only thing the california courts have ever said is that you can't bring a seven ninety point  three subsection h claim that's not right that's what zob was not the case about claim settlement procedures and yet zang the california supreme court said those claims could not be brought as an unlawful claim under the u c l the same with manufacturer's life which was the first one after marathi that led to all of this that was not about claim settlement procedures under subsection age what zang ultimately says and what we rely on here and what we have and what we have quoted here it says that when the legislature enacted the u i p a it contemplated only administrative enforcement by the insurance commissioner private you i p a actions are absolutely barred a litigant may not rely on the prescriptions of section seven ninety point zero three as the basis for a u c l claim so why do we say that applies to the illustration statute because when the california legislature decided how the illustration statute would be enforced they selected the administrative enforcement mechanism of the u i p s a we also point to the methodology that the mirage the shallow court looked at they look to the legislative history and they found that the california legislative history included no discussion of a private right of action adopted by california and when you look at that here what it shows is that they had concerns about allowing for a private right of action so we think that this report was right and it's not correct by the way to say in response to your question your honor the california attorney general said the district court relied solely on the absence of a private right of action that's not right at record of excerpt four seventy eight page four he explains his decision and he says zang unequivocal holds that where the legislature does not create a private right of action and instead opt for administrative enforcement by a government entity a litigant may not rely on the statutory prohibition he was trying very hard to follow saying and so he gave them the opportunity to bring these claims still as fraudulent claims which would the only one they talk about is a claim that they say is under subsection nine fifty six ether theory that has to do with what you need to describe in the policy if you're going to include a non guaranteed element in the illustration and you know what they made that argument in their post trial brief on the u c l that's a record of excerpt seven eighty six page twenty four they argued that the disclosures were inadequate per se because the non guaranteed mac reduction is not described in the policy california insurance code section one zero five zero nine nine fifty sixty three that's the only claim they said they couldn't bring and yet they raised it in their post trial brief they were clearly able to do this the fact that they chose not to shouldn't mean that this court has to get into this very complicated question on the u c l we think that all of the california supreme court precedents point you in the right way but nevertheless i see you have a question i was going to turn to the individual claims but i wan make sure you actually are question one question regarding the district court's factual finding concerning the illustration whether the illustrations were misleading with respect to the monthly administrative charge short ok  despite the district court's finding i just can't find any clear disclaimer indicating that this charge is not guaranteed to be reduced or eliminated after ten years and i just would ask you to identify exactly which disclaimer you believe the district was referring to here and if you could include records cite i well i have a right here for you in terms of the record that's been submitted it's in volume twenty seven of thirty minutes record x i'm sorry it's t x for sorts that means exhibit four and it's page twenty of that this is mis boomers illustration this is what he was relying on there are all caps boldfaced the page before the macro doc the mac values are shown on the very next page it shows the mac values only going for ten years and then the macro using zero after that and on this page it says this is an illustration only an illustration is not intended to predict actual performance and then here's the key language interest rates dividends or values that are set forth in this illustration are not guaranteed except for those items clearly labeled as guaranteed what there interest rates and and evidence are are clearly not charges and values refers to the camilli cross house cash value of the policy so the district court sat through a three week trial heard how these were sold heard how people understood them he understood it the way we do that in this column these are values being shown it doesn't say that after ten years your monthly administrative charge should be reduced to zero what it does is it just displays values well it has values for some doesn't for your response to my question on whether that's the same as charges is simply yes is that it isn't it is the cause it is and that they their argument is a very technical one saying well the statute treats them differently but we're talking about sales illustrations we're talking about people trying to parse statutory language but i want to give you some more comfort on that with let me just ask you a question if we if we conclude i just i don't know that the discord did error in finding that the monthly administrative charge was was not represented and you know misleading or deceptive manner do we have to vacate the disproportionate amount with respect to this claim you do not and that i'm glad you asked that where i was headed i want to give you comfort that it's been decided correctly in any event as i said the district court also made abundant findings of fact and among those findings of fact he said that the illustrations were used by the agents to discuss in depth how these a how these were sold after they were in the policy for a year they contacted an agent and they wrote a complaint letter saying i want out of this policy for these reasons not one of them was the mack reduction charge not being guaranteed in other words the only time that they ever said that that was important to them in purchasing the policy was when they were on the stand the district court made credibility findings about each one of the plaintiffs in different contacts about miss walker he said that she claimed that she was trying to get out of the policy because of all the issues she had suddenly become aware of he said i do not credit that that is that give me one moment i apologize that is that page thirty eight of excerpt of record seven ninety one he doesn't credit he said she was looking for a loophole to get out as for mr howard and he said that their complaint letter they admitted on the stand was full of over statements false statements that they knew to be untrue statements and so i know he doesn't have a sentence in there i'm not trying to pull the wool over your eyes and say he has a statement that says therefore i distrusted everything that they said but this is essentially that well let me ask you this because if you what was what was stated was not guaranteed with the interest rates that dividends and the values is that that's correct last point i want to make the other reason he rejected their charge is because he said the policies haven't been in effect in ten years they got out of their policy and they were never charged this fee and in fact they never would have he made a factual finding that the defendants computers were already programmed to give this so the only thing that they could get is if they said that the value of the policy was less by x because of this and he doesn't credit that this was even an issue that was in their minds at all when they bought the policies yes this ask me ask it differently wouldn't the injury have occurred at the time the plaintiffs purchased their policy that's what i was saying but i don't there's no he's he's rejecting that it was relevant to their lives from our yeah and now i'm i was very honest with you he doesn't say i find the mac was not relevant to them but he has factual findings about both of them saying that when they fire sent complaints to my client after being in their policies for over a year saying i want out because of this this was not listed this was not one of the reasons that led them to buy the policy but so do you agree that a guaranteed reduction would make the policy more valuable than if the reduction of the was not guaranteed it could i don't know i mean it could but that's what they have to support with evidence and i guess my basic point is we went through a three week trial here where he got to see everybody he got when he makes an evaluation of whether or not this disclosure was likely to be misleading he makes it within that entire context and he heard the pla he heard them testify he heard why he didn't think they were all that credible given that their complaints are completely inconsistent that's why i think it's this is right i do want to address i want to make sure i address a couple things you asked a question about you know did plaintiffs really think that these were all the fees and my opponent said yes they did well that's not that's not right the bait was not just one policy he fee here that there are findings of fact in the record that mrs walker's agent discussed and ms walker understood the features of the policy including the fees you can find that at in his decision which is a record of excerpts seven ninety one at page thirty four he says that they discussed the charges in fees the same with mr howlett and miss rouer is finding is that these discussions made clear that the life insurance policies being described would include charges associated with the policy including mortality and expense charges additionally their agent described to them all of the charges and fees associated with the policies and he also made a finding that that's just what the agents were trained to these were individual eyes presentations and that's correct they were all individual eyes presentations the other thing i wanted to make sure i addressed before i sat down was my opponent said the district court may have been confused as to whether his credibility finding on dr brockett really influenced his entire finding about dr brackett it surely did this is a page fifty three of the same record of excerpt of seven ninety one he said that this concession by dr brocket that his testimony was certainly misleading not only detracts from the probity value of dr brackets opinion regarding a class wide volatility defect it also considerably undermines dr brackets overall credibility the court therefore concludes the plaintiffs have offered no reliable or valid statistical evidence to establish the paragon of provider policies purchased by the class are prone to lapse and that is only one of ten reasons we point out in our brief why the district court rejected the class claims we think that his findings of fact on that and on the individual claims were not clearly erroneous they were permissible views of the evidence even if this court may think that there was another permissible view and for that reason we think that the judgment should be affirmed thank you very much  illustration statute based things at the beginning of the case and then it wrongly decertified the class on the bait and switch claims so that forced the trial to be mostly about volatility i think the court will find only two or three pages where the district court in its opinion deals with the bait and switch claims and there it wrongly held that because the information was in the policy that cured the deception in the illustrations that is inconsistent with ver of the bank of america rubio v capital one bank williams v gerber products we cited all of those cases and argued them extensively to the district court they are not even mentioned in the district court's decision so we believe the court clearly erred with respect to the bait and switch claims now and i have to point out that if the court looks at the testimony of the counsel just cited regarding what the plaintiffs were told the agent said i described the fact that there were different kinds of fees but nothing contradicted the testimony of the plaintiffs that when they looked at the illustration they believe that all of the fees were rolled up in the number that was shown in that mac charge column and but in fact all the fees are not rolled up in that mac charge card so there's nothing that contradicts the plaintiff's testimony with respect to that point out also on the alliance issue and going back to your honor's question about  reliance can be presumed from materiality so we don't need to remain anything if if these fees and whether they're guaranteed or not guaranteed as material you can presume or lines that's in in rates a back of two cases the court so help and the reliance in the case of bait and switch is only that you see the bait and pursue the transaction as held in view or here they saw the illustration they pursue the transaction by submitting up with patients undergoing medical examinations after all that was done they get the policy which has the true information about the fees and that does not cure the deception of the bait and switch which had misrepresentation such as the reduction of them actually such as the two or two and a half percent interest which was not actually guarantee you can even show those in an illustration if they're not in the policy so it was per se unlawful the insurance department in california and grab the administration i don't yes john i so i don't know the extent to which they actually have proceedings and in fact in their brief they say they need help and forcing that of the illustrations there should be only one that i'm personally aware of your honor is the crawl case which was also against l s w and disposed of by judge on the same we believe flawed basis this is it's a companion to you know it was unrelated it was honor may i may make one last statement and that is that the illustration statute is clear that you can't have a misrepresentation in an illustration so the judge still knows rationale for defeating the claim under the fraudulent prong which was it's in the policy that defense by a list that doesn't even apply to claims that are predicated on the illustration statute because that the illustration statute says you can't have a misleading illustration thank you thank you very much i want to think both sides for some excellent arguments here today i really appreciate it looks like you are all very well prepared and able to answer all the questions thank you very much the