20 - 3559 - cv The Insurance Company of the State of Pennsylvania v. Equitas Insurance Limited

UNITED STATES COURT OF APPEALS F OR THE S ECOND C IRCUIT August Term, 2022 Argued: December 1 , 2022 D ecided: May 22 , 2023 Docket No. 20

- 3559

- cv

T HE I NSURANCE C OMPANY O F T HE S TATE O F P ENNSYLVANIA , Plaintiff

- Appell ee ,

— v. — E QUITAS I NSURANCE L IMITED , Defendant

- Appell ant
.

Before: C ALABRESI , L YNCH , and N ARDINI , Circuit Judges

.

Defendant

- Appellant, a reinsur er , appeals from an order of the Southern District of New York (Swain, C. J. ) granting summary judgment to Plaintiff

Appellee, its reinsured

. On appeal, Appellant argues that the district court2 erroneously held that its reinsurance obligations to Appellee are co -extensive with Appellee’s separate insurance obligations to a third party and that it presented no triable issue of fact on its late

- notice defense. We disagree. The district court correctly determined that English law, which governs the relevant reins urance policy, would interpret that policy to provide coverage that is co

extensive with Appellee’s separate insurance obligations. The district court also correctly rejected Appellant’s late

- notice defense because Appellant has not shown the sort of extre me facts that would be necessary under English law to support recognition of that defense where , as here, timely notice is not a condition precedent to coverage. We therefore AFFIRM the district court’s order granting summary judgment.

P ETER R. C HAFFETZ ( Andrew L. Poplinger , on the brief ), Chaffetz Lindsey, LLP , New York, NY, for Plaintiff

Appellee

. S EAN T HOMAS K EELY , Freeborn & Peters LLP, New York, NY, for Defendant

- Appellant (Jill C. Anderson, Freeborn & Peters LLP, Chicago, IL , on the brief ). G ERARD E. L YNCH , Circuit Judge : This is a reinsurance dispute between Defendant

- Appellant Equitas Insurance Limited (“Equitas”) and Plaintiff

- Appellee the Insurance Company of the State of Pennsylvania ( “ ICSOP ” ). In the late 1960s, ICSOP provided umbrella insurance to a predecessor of Do le Food Company for a policy period from October 1968 to October 1971 (the “ICSOP

- Dole policy”). Equitas then reinsured part of ICSOP’s exposure for the same three

- year period

.3 Many years later, in 2009, homeowners in Carson, California, sued Dole for po lluting t heir soil and groundwater. Dole and ICSOP settled th ose claims and a llocated $20 million of the settlement liability to the ICSOP

- Dole policy, even though the Carson plaintiffs ’ property damage s and personal injuries continued to accrue after the ICSOP

- Dole policy period had ended. In doing so, the settlement followed California law ’s approach to allocation, known as the “all sums rule,” which treats any insurer whose policy was in effect during any portion of the time during which the continuing h arm occurred as jointly and severally liable ( up to applicable policy limits ) for all property damages or personal injuries caused by a pollutant. ICSOP thereafter sought reinsurance coverage from Equitas for its liability , only for Equitas to deny its claim on the basis that English law, which governs the reinsurance policy, would not have allocated ICSOP’s liability on an all sums basis. Instead, Equitas asserted , English law would have prorated ICSOP’s liability based on the number of year s it provided coverage to Dole. Accordingly, Equitas contended that its reinsurance obligations were similarly limited. Equitas also defended its denial on the theory that ICSOP had deliberately delayed notice of claim , and thus forfeited any claim under t he reinsur ance policy.4 ICSOP then brought this suit, claiming that Equitas was liable on the policy for the reinsured portion of ICSOP’s settlement liability. Rejecting both of Equitas’s arguments for denying coverage , t he district court ( Laura Taylor Sw ain, C. J. ) granted summary judgment to ICSOP

. We agree with the district court. Although the question is not without doubt, we conclude that u nder the better reading of English law, Equitas’s obligations under the reinsurance policy a re co - extensive with ICSOP’s obligations under the ICSOP

- Dole policy

. The question i s not whether English law would have allocated ICSOP’s liability on an all sums basis ; English law d oes not govern ICSOP’s liability. Instead, the question i s whether, once IC SOP’s liability was properly allocated, as Equitas concedes that it was, English law would then interpret the reinsurance policy as providing co

- extensive coverage. Under English law, there is a strong presumption that facultative reinsurance policies provide back

- to
- back coverage, meaning that the liability of the insured is generally equivalent to the liability of the reinsured. Searching for a way around that presumption, Equitas urges that the United Kingdom Supreme Court would never apply the back

- to
- back presumption where, as here, a foreign jurisdiction’s law has the effect of5 avoiding a reinsurance policy’s coverage period . But the United Kingdom Supreme Court has never limited the presumption in that way, and it has in fact applied a version of the all sums rule in limited instances. Separately , English law has never recognized the defense of full repudiation based on late notice of claim where, as here, timely notice is not a condition precedent to covera ge. While Equitas urges that English law would recognize such a defense on extreme facts, no such facts are present here

. We therefore AFFIRM the judgment of the district court. BACKGROUND In the late 1960s, a subsidiary of Castle & Cook e Inc. purchased land in Carson, California , where Shell Oil Company had form er ly operated an oil and petroleum containment facility

. The Castle & Cook e subsidiary demolished the facility and developed a housing tract

. Decades later, i n 2008, the California Depa rtment of Toxic Substances Control tested a site adjacent to the housing
tract and found hazardous levels of petroleum hydrocarbons, including benzene, a known carcinogen, in the soil and groundwater

. Soon after th at discovery, Carson homeowners sued Dole Food Company (with which Castle & Cook e had , by then, merged) and Shell in California state court

. According to their6 complaint, l ong - term benzene exposure can cause various latent diseases, such as anemia and leukem ia , that can manifest many years after exposure

. Thus, the homeowners sued for personal injuries and property damage related to the environmental contamination. Shortly after suit was filed in October 2009, Dole notified its insurers

. One insurer wa s ICSOP, a wholly

- owned subsidiary of the American International Group, Inc

. In 1968, ICSOP had issued umbrella insurance to Castle & Cooke (the

“ ICSOP

- Dole policy ” )

. The ICSOP

- Dole policy covers up to $20 million for “all sums” for which Dole might be liable in damages “caused by or arising out of each occurrence happening during” a three

- year policy period, from October 1, 1968, to October 1, 1971 . J. App’x 754

. Dole and its insurers settled the homeowners’ and other related lawsuits , assigning $20 million in liability to the ICSOP

- Dole policy

– even though that policy contained a three

- year coverage period and even though the plaintiffs’ losses accrued over four decades

. T he parties do not disput e either the fact or the
extent of ICSOP’s liability under the ICSOP

- Dole policy . As for ICSOP’s liability in gene r al , the ICSOP

- Dole policy sets “occurrence” as the relevant thing that must happen during the policy period, id. , and it defines occurrence to include7 “an event or a continuous or repeated exposure to conditions which result in Personal Injury or Property Damage,” id. at 755

- 56. As for the extent of ICSOP’s liability, the set tlement followed the “all sums” rule , a rule that is followed by the State of California, whose law s govern ed the settlement

. See Armstrong World Indus., Inc. v. Aetna Cas. & Sur. Co. , 52 Cal. Rptr. 2d 690, 710

- 11 (Cal. Ct. App. 1996)

. While the ICSOP

- Dole policy is governed by the laws of the State of Hawaii, neither party disputes that Hawaii, like California, follows that rule. See Sentinel Ins. Co. , Ltd. v. First Ins. Co. of Hawai’i, Ltd. , 875 P.2d 894, 917 (Haw. 1994), as amended (June 24, 19 94). As discussed more fully below, t he all sums rule applies in long

- tail liability cases

– cases that involve, for example, injuries that manifest many years after exposure to a pollutant

– and holds insurers jointly and severally liab le , up to applicable policy limits, for all property damages or personal injuries caused by the pollutant so long as some of the contin uing harm occurred while each policy was in effect

. See Montrose Chem. Corp. of Cal

. v. Superior Ct. of L .A. C ounty , 460 P. 3d 1201, 12 06

- 07 (Cal. 2020), as modified (May 27, 2020)

. To cover part of its losses, ICSOP notified Equitas, its reinsurance carrier , of Dole ’s claim against the ICSOP

- Dole policy

. In 1969, ICSOP had obtained8 facultative reinsurance 1 from underwriters at Lloyd’s of London to hedge some of the risk stemming from the ICSOP

- Dole policy ; Equitas later inherited those reinsurance obligations from Lloyd’s

. The reinsurance policy spans the same three

- year period as the ICSOP

- Dole policy, and it covers up to $7,234,125 for each $20 million limit that ICSOP pays to Dole

. It provides that reinsurance coverage is “[a]s [ o ] riginal,” J. App’x 779, 796, and it contains a follow

- the

settlements clause, which reads : Now W e the U nderwriters hereby agree to reinsure against loss to the extent and in the manner hereinafter provided. Being a Reinsurance of and warranted same gross rate, terms and conditions as and to follow the settlements of the Company . . . . Id. at 777, 793

. Equitas has refuse d to cover any portion of ICSOP’s part of the settlement and to pay ICSOP’s claim.

1 “In a facultative reinsurance transaction, the company purchasing reinsurance

. . . ‘cedes [] ’ all or a portion of the risk under a single insurance policy to the reinsurance provider,” which in turn obtains a portion of the original premium. Glob. Reinsurance Co rp. of Am. v. Century Indem. Co. , 22 F.4th 83, 88 (2d Cir. 2021). “In contrast to facultative reinsurance, ‘treaty reinsurance’ involves the transfer of a portion of the risk of numerous insurance policies issued to different policyholders covering an enti re class of risk.” Id. at 88 n.4

.9 In September 2017, ICSOP filed suit against Equitas for reinsurance coverage in the Southern District of New York

. A t the close of discovery, the parties cross

- moved for summary judgment

. Equitas p rincipally argue d that ICSOP is not entitled to indemnity under the reinsurance policy because , while it did not dispute ICSOP’s liability to Dole under the all sums rule, Equitas’s liability to ICSOP under the reinsurance policy is governed by English law, which does not follow that rule. Equitas also asserted a separate repudiation defense, contending that it may fully repudiate the reinsurance policy because ICSOP deliberately delayed notice of claim for about six years after becoming

aware that a claim was likely , and misled Equitas into believing that ICSOP had no claim against the reinsurance policy

. For its part, a lthough it agreed that English law governed the reinsurance policy , ICSOP argued tha t English law would interpret the reinsurance policy as “back

- to
- back”

– that is, providing co - extensive coverage – with the ICSOP

- Dole policy

. ICSOP also argued that English law has never recognized a defense of full repudiation based on late notice of claim, and that in any event ICSOP’s conduct did not reflect untimely notice or the extreme bad faith that, on one reading of English law, might p ermit such a defense

.10 The district court agreed with ICSOP , holding that the parties’ obligations

are co - extensive and rejecting Equitas’s full repudiation defense

. See Ins. Co. of State of Pennsylvania v. Equitas Ins. Ltd. , No. 17

- 6850, 2020 WL 4016815, at * 2

- 5 (S.D.N.Y. July 16, 2020)

. Consequently, it awarded ICSOP $7,234,125 in damages

. Id. at * 6

. Equitas appeals from that judgment. DISCUSSION We review a grant of summary judgment de novo

. Bey v. City of New York , 999 F.3d 157, 164 (2d Cir. 2021)

. W e first consider the scope

- of

- coverage issue

– whether Equitas’s obligations under the reinsurance policy are , as the district court held, co - extensive with ICSOP’s obligations under the ICSOP

- Dole policy

. We then consider Equitas ’s repudiation defense

. Because , as the parties agree, English law governs the reinsurance policy , our role is to predict how the United Kingdom Supreme Court would resolve th ose issues
. See Terra Firma Invs. (GP) 2 Ltd. v. Citigroup Inc. , 716 F.3d 296, 299

- 300 (2d Cir. 2013) (predicting that “a rebuttable presumption of reliance” that attaches to some claims for “fraudulent misrepresentation” is “a burden

- shifting device” under English law )

. 2

2 As a federal court sitting in alienage jurisdiction under 28 U.S.C. § 1332(a)( 2 ), we apply the choice

- of

- law rules of the forum s tate

– here, the State of New York.11 I. Scope of Coverage Under English law, a facultative reinsurance contract is “a separate contract” that “is not an insurance against liability. ” Wasa Int’l Ins. Co. v. Lexington Ins. Co

. [2010] 1 AC 180 (HL) ¶ 32 (Lord Mance); see also Delver v. Barnes [1807] 127 Eng. Rep. 748 (CP) 749

- 50 (Mansfield, C.J.)

. Thus, “an insurer seeking indemnity under a reinsurance must, in the absence of special terms, establish both [1] its liability under the terms of the insurance and [2] its entitlement to indemnity under the terms of the reinsurance. ” Wasa [2010] 1 AC 180 (HL) ¶ 35 (Lord Mance) (emphasis added)

. To be entitled to indemnity, ICSOP therefore must show that it s liab ility was properly allocated under the terms of the ICSOP

See Int’l Mins. & Res., S.A. v. Pappas , 96 F.3d 586, 592 (2d Cir. 1996) (applying the forum state ’s choice

- of

- law rules in dispute arising under § 1332(a)( 2 )); Klaxon Co. v. Stentor Elec. Mfg. Co. , 313 U.S. 487, 496 (1941) (holding “that the prohibition declared in Erie Railroad v. Tompkins , 3 04 U.S. 64 [(1938)], against such independent determinations by the federal courts extends to the field of conflict of laws”). Because the parties agree that New York’s choice

- of

- law rules compels the application of English law, we need not undertake a com plicated choice

- of

law analysis. “Under New York choice

- of

- law rules, ‘where the parties agree that [a certain jurisdiction’s] law controls, this is sufficient to establish choice of law.’” Alphonse Hotel Corp. v. Tran , 828 F.3d 146, 152 (2d Cir. 2016), qu oting Fed. Ins. Co. v. Am. Home Assur ance Co. , 639 F.3d 557, 566 (2d Cir. 2011) (alterations added in Alphonse Hotel ).12 Dole policy and that it is entitled to indemnity for that liability under the reinsurance policy. A

. Liability under the ICSOP

- Dole Policy Equitas does not dispute ICSOP’s liability to Dole under the ICSOP

- Dole policy or the settlement’s apportionment of damages

. Nonetheless, because some of Equitas’s arguments against indemnity under the reinsurance policy concern whether English law is receptive to the all sums rule , it is helpful to outline some general principles of American and English law that inform those arguments

. Those principles aid our pred iction of how the United Kingdom Supreme Court would decide th e contested question of indemnity in the reinsurance context

. i. American Tort and Insurance Law As one commentator has put it , “[v] ery few developments have ever transformed either tort or insurance law, . . . and only one [] [development] has transformed both

. . . . ” Kenneth S. Abraham, The Long

- Tail Liability Revolution: Creating the New World of Tort and Insurance Law , 6 U. Pa. J.L. & Pub. Aff. 347, 349 (2021) (emphasis omitted )

. That development is the rise in tort and insurance litigation concerning “long

- tail harms,” a term that “describes a series of indivisible harms, whether bodily injury or property damage, that are13 attributable to continuous or repeated exposure to the same or similar substances or conditions that take place over multiple years or that have a long latency period. ” Restatement of the Law of Liability Insurance § 33 cmt. f ( Am. L. Inst. 2019) (identifying “ asbestos

- related bodily injuries and environmental property damage ” as two “ paradigmatic examples ” )

. In tort law, long

- tail harms present “ quintessentially difficult causation questions, largely because of the length of time between the defendant ’ s allegedly tortious conduct and the manifestation of injury, disease, or damage that may have been caused by that conduct. ” Abraham, supra , at 357

- 58 . Those quandaries inspired judicial innovation s regarding but

- for causation. In the seminal case on market

- share liability, for example, the Supreme Court of California addressed claims brought by the daughters of mothers who had ingested diethylstilbestrol ( “ DES ” ) during their pregnancies, which led to latent injuries m anifesting in th eir daughters many years later. See Sindell v. Abbott Lab ’ ys , 607 P.2d 924, 925

- 26 ( Cal. 1980) . Ordinarily, the doctrine of but

- for causation would have required the plaintiff

- daughters to prove which of many manufacturers had produced the DES that their mothers had ingested. See id. at 927

- 28. But t he Supreme Court of California relieved them of that near -14 impossible burden , holding that “[e] ach defendant will be held liable for the propo rtion of the judgment represented by its share of that market unless it demonstrates that it could not have made the product which caused plaintiff's injuries.” Id. at 937. Similarly, when it comes to asbestos

- related injuries , it is nearly impossible to p rove with “ absolute certainty which particular exposure to asbestos dust resulted in injury to ” a particular plaintiff , especially for an employee who was exposed to several different sources of asbestos from several different employers

. Borel v. Fibreboard Paper Products Corp. , 493 F.2d 1076, 1094 (5th Cir. 1973)

. In responding to that issue, courts developed more plaintiff

- friendly causation rules . In Borel , for example, the Fifth Circuit (applying Texas law) held that it was enough for a victim of mesothelioma and asbestosis to show that he was tortiously “ exposed to the [asbestos

- contaminated] products of all the defendants on many occasions
. ” Id. (emphasis added). Mere tortious exposure was sufficient, t he court held , because “[i ] t was . . . established that the effect of exposure to asbestos dust is cumulative, that is, each exposure may result in an additional and separate injury. ” Id. Similarly, in Rutherford v. Owens

- Illinois, Inc. , the Supreme Court of California held that “plaintiffs ma y prove causation in15 asbestos

- related cancer cases by demonstrating that the plaintiff ’ s exposure to defendant ’ s asbestos

- containing product in reasonable medical probability was a substantial factor in contributing

. . . to the risk of developing asbestos

- related

cancer. 941 P.2d 1203, 1219 ( Cal. 1997), as modified (Oct. 22, 1997) ( first emphas i s added ; footnote omitted )

. U nder that approach , a plaintiff need not “ demonstrate that fibers from the defendant ’ s particular product were the ones, or among the ones, that actually produced the malignant growth

. ” Id. (emphasis omitted). Those judicial innovations and others like them expand ed the universe of liable defendants, and thus spawned ever more difficult questions concerning how to allocate that liabi lity. Those questions still remain . T here appears to be no majority American rule , for instance, governing how to allocate liability when multiple defendants are liab le for an indivisible injury

– like mesothelioma or other cancers or property damage

– flowing from environmental contamination ; some jurisdictions appear to employ hybrid approaches to apportioning liability

. See Restatement (Third) of Torts: Apportionment Liab. § 17 cmt. a ( Am. L. Ins t. 2000 ) (collecting various approaches)

. On the one hand, eight years after Sindell , the Supreme Court of California rejected the imposition of joint

- and

- several liability in the context of market

- share liability, confining liability instead to the16 defend ants’ respective share of the market. See Brown v. Superior Court (Abbott Lab ’ ys ) , 751 P.2d 470, 48 5

- 8 7 ( Cal. 1988) . On the other, the Borel court (again applying Texas law) imposed joint

- and

- several liability. 493 F.2d at 109 5

- 96. Related developments occurred in the world of insurance law as claims for long

- tail harms made their way through the courts. With rising long

- tail tort liability an d a competitive American insurance market in the 1960s, comprehensive general liability insurance shifted from covering tort liability caused by an “accident,” which arguably covered only abrupt events that resulted in immediate harm, to covering tort liab ility caused by an “occurrence.” Abraham , supra , at 369

- 71. 3 That change was “ a recognition that the policy was to cover liability for harm caused by pollution and other similar, slowly

- occurring processes. ” Id. at 371.

3 Ironically, that shift appears to have been led by Lloyd’s seeking to tap into the American insurance market. Abraham, supra , at 370

- 71 . Lloyd’s faced a “financial disaster,” however, when “the long

- tail chickens” came “home to roost.” Id. at 37 1 . To stav e off financial ruin, it “established and funded” Equitas “to be the repository of its syndicates’ liability under CGL policies issued prior to 1992.” Id. at 402. Thus, Equitas hatched from a problem its predecessor helped sire, the same problem ICSOP conf ronted with Dole, that ultimately led to ICSOP’s claim against Equitas.17 The ICSOP

- Dole policy descends from that lineage. Executed in the late 1960s, it covers Dole for “all sums” that Dole “shall be obligated to pay by reason of liability imposed upon [Dole] by law,” and for “all damages, direct or consequential, . . . on account of personal injuries . . . and property damage, caused by or arising out of each occurrence happening during the policy period.” J. App’x 754 (emphases added). Notably, the ICSOP

- Dole policy defines “occurrence” broadly to include “an event or a continuous or repeated exposure to conditions which result in Personal Injury or Property Damage.” Id. at 755

- 56 (emphasis added). That language a ppears to codify the so

- called “continuous injury” trigger in insurance law. Whether insurance coverage is “triggered” refers to the question of “what events, from the point of exposure to the point of manifestation, trigger coverage.” Keene Corp. v. Ins. Co. of N. Am. , 667 F.2d 1034, 104 2 (D.C. Cir. 1981). In answering th at question, courts within the United States have developed several approaches: (1) the manifestation theory, where coverage is triggered when an injury manifests, even if the injury occur red many years earlier; (2) the injury

- in

- fact theory, where coverage is triggered when an injury actually occurs, even if the injury might manifest many years later; (3) the18 exposure theory, where coverage is triggered when the injured p erson or property is exposed to the risk that later manifests into harm ; and (4) the continuous injury trigger, where coverage is triggered throughout the progression of a disease or property damage , from initial exposure to the risk all the way to manifestation of harm . Re statement of the Law of Liability Insurance § 33 cmt. f ; see also Sentinel Ins. Co. , 875 P.2d at 914

- 15. 4 There is no consensus rule. Importantly for our purposes, California and Hawaii have adopted the continuous injury trigger when interpreting occurrence

- based policies like the ICSOP

- Dole policy

. See Montrose Chem. Corp. of Cal. , 460 P.3d at 12 06

- 07 ; Sentinel Ins. Co. , 875 P.2d at 917 ( Hawaii law; adopting an “injury

- in

- fact” theory in general, but adopting the continuous injury the ory where the “injury

- in

- fact occurs continuously over a period covered by different insurers or policies , and

4 Some courts apply different theories that, depending on the circumstances , result in “ little ultimate difference ” between types of triggers

. See Restatement of the Law of Liability Insurance § 33 cmt. f . For example, in jurisdictions that follow the injury

- in

- fact theory, “when the available scientific evidence is not able to determine the precise amount of harm attributable to a particular year o r to particular years, most courts have concluded either that the continuous

- trigger rule applies or, applying the injury

- in

- fact trigger, that the bodily injury or property damage actually takes place continuously from the moment of first exposure to asbe stos or environmental contaminants.” Id.19 actual apportionment of the injury is difficult or impossible to determine ”). Hence, there is no dispute that ICSOP was liable to Dole. The extent of ICSOP’s liability to Dole presents a different, though also undisputed, question. The continuous injury trigger implicates distinct allocation issues because that trigger presents circumstances where multiple insurers , like multiple defendants in a tort action, might be liable . It also presents circumstances where, as here, a single insurer is liable even though that insurer provided coverage during only a short part of the period of exposure to the risk that later evolved into harm

. 5

5 Recall that ICSOP insured Dole only for a three

- year policy period but was deemed liable for damage that continued to accrue for decades after the policy period had ended. As far as the record discloses, Dole obtained other insurance during that time, but apparently many (or all) of its policies for later periods contained pollution exclusions , while the ICSOP

- Dole policy did not. Pollution exclusions were not an uncommon response in occurrence

- based policies issued following legal developments beginning i n the 1960s. See Abraham, supra , at 372

- 73 (explaining that insurers “got cold feet” and began to include “‘qualified’ pollution exclusion[s]” in the 1970s). We cannot independently verify the extent to which Dole had other insurance coverage against which ICSOP could assert a contribution claim. But that does not matter for our purposes because whether or not other insurance coverage was available to Dole, the all sums rule deems ICSOP jointly and severally liable, up to the ICSOP

- Dole policy limit, for Do le’s settlement liability. See Montrose Chem. Corp. of Cal. , 460 P.3d at 1207.20 In those c ircumstances, some jurisdictions , like California and Hawaii, follow the all sums rule

. That rule resolves the allocation issue in favor of the insured by holding the insurer jointly and severally liable for “all sums for property damage attributable to th e polluted site, up to their policy limits, if applicable, as long as some of the continuous property damage occurred while each policy was on the loss. ” Montrose Chem. Corp. of Cal. , 460 P.3d at 1207 (internal quotation marks , citation, and brackets omitt ed) ; see also Sentinel Ins. Co. , 875 P.2d at 915 (similar under Hawaii law ) . Th at rule reflects the understanding that an insurer’s duty to the insured is an issue distinct from apportionment and allocation between multiple insurers. See Armstrong World Indus., Inc. , 52 Cal. Rptr. 2d at 710

- 11, 742. In other words, once an insurer is on the hook for “all sums,” the dispute between the insured and insurer ends, and a contribution dispute between co

- insurers begins. In light of that understanding, a policyholder may obtain full recovery from one insurer even if it was insured by several successive insurers or uninsured for part of when the damages accrued. Id. Courts have applied the all sums rule where language in the policy requir ed the insurer to pay “all sums” for which the insured becomes liable on21 account of an event during the policy period. California v. Cont’l Ins. Co. , 281 P.3d 1000, 1007

- 08 (Cal . 2012), as modified (Sept. 19, 2012) ; see also Keene Corp. , 667 F.2d
at 104 7

- 50. The ICSOP

- Dole policy contains that language. See J. App’x 754. Thus, Equitas does not dispute th e extent of ICSOP’s liability to Dole under California law. An alternative approach is to prorate responsibility “ by year among triggered policy years. ” Abraham , supra , at 380. For example, “[i] f a $200 million liability triggered twenty policy years, then each policy year would be potentially responsible for its pro

- rata share of $10 million. ” Id.

“ There is some disagreement over the precise number of jurisdictions that have adopted each position ”

– the all sums rule or the pro rata approach

– “ in part because of variation in policy language and in part because of differ ing possible interpretations of the holdings in some cases. ” Restatement of the Law of Liability Insurance § 41 cmt. c . What seems to be clear, however, is that “a significant number of courts ” have adopted the all sums rule, “a clear majority” have adopte d the pro rata approach, and “ many courts have not yet taken a position .” Id. ; see also Rossello v. Zurich Am. Ins. Co. , 226 A.3d 444, 451 n n . 12

- 13 (Md. 2020) (collecting some of the divide ).22 Whether to relax causation in tort, set a default rule that mor e expansively triggers insurance coverage, or allocate liability on a pro rata or all sums basis, are quintessentially public policy questions. As a federal court sitting in alienage jurisdiction, it is not our role to answer those questions. Instead, our role is to determine how English law would resolve those issues in the context of reinsurance . How English law has approached those issues in the context of tort liability and insurance is therefore helpful to understanding the parties’ arguments. ii. English Tort and Insurance Law As with American law, we begin our discussion of English law with torts. In Fairchild v. Glenhaven Funeral Services L t d

. , the House of Lords heard a n appeal involving three claimants whose long

- term and substantial expos ure to asbestos caused them to develop mesothelioma. [2003] 1 AC 32 (HL) ¶¶ 3

- 5 (Lord Bingham)

. The Lords considered whether there were “special circumstances,” in light of the medical uncertainty concerning how asbestos exposure causes mesothelioma, that would justify deviating from the ordinary rule of but

- for causation. Id. ¶ 9; see also id. ¶¶ 41, 43 (Lord Nicholls) ; id. ¶¶ 56, 63 (Lord Hoffmann) . Citing California’s approach, the Lords in Fairchild agreed to deviate23 from the traditional rule, holding t hat an employer is liable if the employer “wrongful[ly] expose[d] . . . its employee to asbestos dust” and that exposure was not “insignificant” but rather materially increased the risk that the employee would contract disease. Id. ¶ 42 (Lord Nicholls); se e also id. ¶¶ 31, 34 (Lord Bingham); id. ¶¶ 47 , 63, 73 (Lord Hoffmann) ; id. ¶¶ 105, 10 7

- 09 (Lord Hutton); id. ¶¶ 161, 168 (Lord Rodger)

. 6 After Fairchild , the House of Lords faced the allocation issue in Barker v. Corus UK Ltd. [2006] 2 AC 572 (HL) . Ordinarily, under English law, if two tortfeasors are the proximate cause of an indivisible injury, like mesothelioma, both tortfeasors are jointly and several ly liable. See id. ¶ 28 (Lord Hoffmann). Applying that apportionment rule, liability under Fairchild would seem to result in joint

- and

- several liability, because a necessary condition for Fairchild liability is that the claimant suffer an indivisible injur y. Id. ¶ 61 (Lord Scott). But that would be incongruent with the basis of Fairchild liability, which is the creation of a

6 Barker v. Corus UK Ltd. [2006] 2 AC 572 (HL) ¶ 1 (Lord Hoffmann) (explaining that Fairchild held “that a worker who had contracted mesothelioma after being wrongfully exposed to significant quantities of asbestos dust at different times by more than one employer or occupier of premises could sue any of them, notwithstanding that he could not prove which exposure had caused the disease”).24 material increase in risk, even if the defendant did not factually cause the injury. Id. ¶ 53 (Lord Scott); see also id. ¶ 126 (Baroness Hale) (“For the first time in our legal history, persons are made liable for damage even though they may not have caused it at all . . . .”). Thus, in Barker , the House of Lords rejected a rule that apportion ed tort liability on a joint

- an d

- several basis between multiple employers who exposed their employee to asbestos and were thereby liable under the Fairchild rule. Id. ¶ 48 (Lord Hoffmann); id. ¶ 62 (Lord Scott); id. ¶¶ 109

- 10 (Lord Walker); Id. ¶ 127 (Baroness Hale). T he House of Lords instead allocated liability on a pro rata basis. Id. In response, however, Parliament passed the Compensation Act 2006 c. 29 § 3 , effectively reversing that aspect of Barker

. See Durham v. BAI (Run off) Ltd. [2012] UKSC 14 ¶ 78 (“ Trigger ”) (Lord Clarke) ( “Th [e] [allocation] decision [ in Barker ] was reversed by the Compensation Act 2006, so that such employers are jointly and severally liable for the whole of the consequences.”). The Compensation Act 2006 holds “that when a victim contracts mesothelioma each person who has, in breach of duty, been responsible for exposing the victim to a significant quantity of asbestos dust and thus creating a ‘material increase in risk’ of the victim contracting the disea se will be held to be jointly and severally liable25 in respect of the disease.” Id. ¶ 5 (Lord Mance)

. English insurance law followed that development. I n Trigger , the United Kingdom Supreme Court held that insurers who cover employers who are liable under the Compensation Act 2006 are likewise liable for such claims against the employers. Id. ¶¶ 49

- 50, 71

- 74. Lord Mance explained that “[w]here two contracts are linked”

– as in the reinsurance context

– “the law will try to read them consistently with each o ther .” Id. ¶ 69. Thus, “[t] he intention under the present insurances must be taken to have been that they would respond to whatever liability the insured employers might be held to incur within the scope of the risks insured and within the period in respec t of which they were insured. ” Id. Then in Zurich Insurance PLC UK Branch v. International Energy Group Ltd

. , the United Kingdom Supreme Court extended Trigger , holding that insurers are jointly and severally liable on an all sums basis for their insured’s liability when that insured is jointly and severally liable pursuant to the Compensation Act. [2015] UKSC 33 ¶¶ 45

- 51, 54, 94

- 97 (Lord Mance)

. In so holding, the Court explained that “facultative liability insurance”

– again, like facultative reinsurance

– “normally responds to whatever may prove to be the liability incurred by the insured. ” Id. ¶ 45 . Thus, “[o] nce one accepts that causation26 equates with exposu re, in tort and tort liability insurance law, ” as was held in Fairchild and Trigger , “ there is no going back on this conclusion simply because there was exposure by the insured of the victim both within and outside the relevant insurance period. ” Id. ¶ 46. That is so despite, as a dissenting Lord pointed out, “ the fundamental importance under English law of the temporal scope of a time policy, ” id. ¶ 153 (Lord Sumption), quoting Wasa [2010] 1 AC 180 (HL) ¶ 15 (Lord Brown). Just as the California Court of Appeal recognized in Armstrong World Industries , 52 Cal. Rptr. 2d at 710

- 11 , the United Kingdom Supreme Court recognized that the “primary question” concerns the duty that the insurer owes to the insured

– in Zurich , to cove r the insured’s liabilities flowing from exposure to asbestos

– not the relative position “ between two insurers .” Zurich [2015] UKSC 33 ¶ 48 (Lord Mance ). Viewed that way, “ there is

. . . nothing illogical about a conclusion that each of successive insurer s is potentially liable in full, with rights of contribution inter se .” Id. But the Compensation Act is limited to the particular situation of asbestos

related mesothelioma. W here that Act does not apply, as is the case here, neither does Zurich ’s adopti on of joint

- and

- several liability

. See id. ¶ ¶ 8

- 9, 35 ; cf. Wasa [2010] 1 AC 180 (HL) . That is because policy periods are accorded fundamental27 importance under English law. See Municipal Mut ual Ins

. Ltd. v. Sea Ins

. Co. Ltd. [1998] Lloyd’s Rep. (Civ) 421 , 436 (Hobhouse, L.J.) (“ When the relevant cover is placed on a time basis, the stated period of time is fundamental and must be given effect to. ”). B. Indemnity under the Reinsurance Policy As we have already noted, b oth parties agree that the reinsurance policy is governed by English law

. And because the Compensation Act does not apply here, English law would not have allocated ICSOP’s liability under the underlying ICSOP

- Dole policy on an all sums basis. But that fact does not resolve the question whether the United Kingdom Supreme Court would construe the reinsurance policy as entitling ICSOP to indemnity for its properly allocated liability. Under English law, the terms of a reinsurance policy must be interpreted in light of its “co mmercial purpose” and circumstances. G RAYDON S. S TARING & H ON
. D EAN H ANSELL , L AW OF R EINSURANCE § 13:1 (Mar

. 2022 update) , quoting Reardon Smith Line Ltd. v. Hansen

- Tangen [1976] 2 Lloyd’s Rep. 621 (HL) 624

- 25 (Lord Wilberforce); see also Charrington & Co. v. Wooder [1914] AC 71 (HL) 82 (Lord Dunedin). In the context of facultative reinsurance, the original insurer28 reinsures part of its risk by paying the reinsurer “a proportional share of the premium. ” Wasa [2010] 1 AC 180 (HL) ¶ 55 (Lord Collins). “[T]he obvious commercial intention” of that arrangement is “for the reinsurer to accept that part of the risk. ” Id. ¶ 60. “Consequently, the starting point is that normally reinsurance of that kind is back

- to

- back with the insurance, and that the reinsurer and the original insurer enter into a bargain that if the insurer is liable under the insurance contract, the reinsurer will be liable to pay the proportion which it has agreed to reinsure. ” Id. ¶ 55 (emphases ad ded). English law therefore recognizes a “strong”

– though not conclusive

– presumption that “liability under a proportional facultative reinsurance is co

extensive with the insurance. ” Id. ¶ 116. Thus, it will “almost invariably be the case” that losses falling within the original insurance policy will also fall within the reinsurance, “even if the losses are payable under a foreign law

. . . which takes a view different from English law” o n liability. Id. That “obvious” outcome “is simply commercial common sense. ” Id. ¶ 60. While a facultative reinsurance contract can deviate from that presumption, “[s]uch a contract would . . . be wholly exceptional” and constitute “a departure from the no rmal understanding29 of the back

- to
- back nature of reinsurance. ” Id. ¶ 62 ( internal quotation marks and citation omitted). A seminal English case applying that presumption is Forsikringsaktieselskapet Vesta v. Butcher [1989] 1 AC 852 (HL ) (“ Vesta ”) . There, an insurance policy covered a fish farm and contained a warranty requiring the farm to keep a 24

- hour watch ; the reinsurance policy in question, which covered that original insurance policy, contained the same warranty. Id. at 890

- 91 (Lord Templeman). The owner of the fish farm failed to keep the watch as required, and the farm was destroyed. Id. What destroyed the farm, however, was not failure to keep a watch, but rather a storm. Id. Under Norwegian law, which governed the original insurance policy, the b reach of warranty was no defense to liability because the owner’s failure to keep a watch was not what destroyed the fish farm

. Id

. at 891. Had the original policy been governed by English law

– which governed the reinsurance policy

– that same non - causative breach would have entitled the original insurer to refuse payment. Id . However, the House of Lords held that absent some “express declaration to the contrary in the reinsurance policy, a warranty must produce the same effect in each policy. ” Id. at 892. It reasoned that the parties, who had access to a “Norwegian legal30 dictionary” when they agreed upon the original contracts, must have intended the clause to have the same meaning in both the insurance and the reinsurance

– that is, the meanin g given by Norwegian law

– and thus provide back

- to
- back coverage. Id. at 911 (Lord Lowry). Equitas argues that Vesta and, more broadly, the back

- to
- back presumption do not apply here. It insists that Wasa , a case with similar facts to this one, limits t he back

- to
- back presumption. In Wasa , an insurance company, Lexington, issued a $20 million insurance policy to Aluminum Co. of America ( “ Alcoa ” ), which Lexington then reinsured in the London market with two English reinsurers. [2010] 1 AC 180 (HL) ¶¶ 18

- 2 1 (Lord Mance). Neither contract specified a governing law, although the insurance included a “service of suit clause ” that required Lexington to “submit to the jurisdiction of any court of competent jurisdiction within the United States. ” Id. ¶ 19 ( intern al quotation marks omitte d ). Both contracts covered a three

- year period, but the Washington Supreme Court held that Pennsylvania law, which followed the all sums rule, applied to a group of consolidated claims and that the underlying Alcoa policy could the refore cover environmental damages spanning 44 years. Id. ¶ ¶ 12

- 13 (Lord Brown); id. ¶¶ 19

- 20, 25

- 26 (Lord Mance). Lexington sued its English31 reinsurers to cover their share of the risk. But this time, unlike in Vesta , the House of Lords held that the back

- to
- back presumption did not apply , and it instead strictly construed the reinsurance contract’s three

- year temporal provision. Id. ¶ 54 (Lord Mance); id. ¶ 116 (Lord Collins). But Wasa differs from this case in one important aspect. There, the underlying Alcoa policy did not contain a choice

- of

- law clause, and it was unpredictable at the time of contracting that Pennsylvania law would govern the Alcoa policy. Here, b y contrast, the unde rlying ICSOP

- Dole policy contains an express choice

- of

- law clause directing the application of Hawaii law, which, Equitas concedes, like California law , follows the all sums rule in environmental suits involving continuous and indivisible injuries. In Wa sa , the absence of a choice

- of

- law clause was significant to Lords Collins and Mance, whose speeches garnered support from a majority of the Lords . Lord Mance explained that the Washington Supreme Court found that Pennsylvania law governed the Alcoa policy by “taking into account matters and events extraneous to th[at] policy. ” Id. ¶ 49. The choice of Pennsylvania law could not, therefore, “be regarded as in any sense predictable at the time when the reinsurance was placed. ” Id. It was for that reason that Was a presented32 “materially different” circumstances from those presented in Vesta

. Id. While in Vesta it was possible “to identify the foreign law which would govern the insurance” when the contract was formed, id. ¶ 44, in Wasa “[t]here was . . . no ident ifiable legal dictionary (formal or informal), still less a Pennsylvanian legal dictionary,” at the time of contracting that “could lead to any different interpretation of the reinsurance wording,” id. ¶ 49. Lord Collins distinguished Vesta on the same bas is. “[I]n complete contrast to the Vesta case,” Lord Collins explained, “there was in 1977, when the [ Wasa ] insurance contract and the reinsurance contract were concluded, no identifiable system of law applicable to the insurance contract which could have provided a basis for construing the contract of reinsurance in a manner different from its ordinary meaning in the London insurance market. ” Id. ¶ 108. Meanwhile, in Vesta , “the substance of the foreign law as to the consequences of a non

- causative breach of warranty could be ascertained at the outset, if necessary by recourse to a relevant Norwegian

. . . legal source. ” Id. Here, as in Wasa , the ability or inability to p redict the law governing the original insurance when the parties execute reinsurance is no small factor. Under English law, “a contract has a meaning which is to be ascertained . . . when it is33 concluded. ” Id . ¶ 45 (Lord Mance). Thus, absent an ability to predict the governing legal regime at the outset, an unspecified foreign law cannot dictate the meaning of a reinsurance contract. The presence of a choice

- of

- law clause in the ICSOP

- Dole policy therefore distinguishes this case from Wasa

. To be sure, Wa sa left open whether the presence of a choice

- of

- law clause would have revived the back

- to
- back presumption. In the course of arguing Wasa , c ounsel for Lexington asked the House of Lords, “what more could Lexington have done to reinsure themselves on a ful ly back to back basis?” Id. ¶ 51

. Tellingly, among other responses, Lord Mance replied that “steps could . . . be taken to make the insurance subject to an identifiable governing law, though this would not necessarily foreclose all argument

. ” Id. (emphasis added). But, even as Wasa does not altogether foreclose Equitas’s arguments, we do not believe that the United Kingdom Supreme Court would be persuaded by them. i. The Fundamental Importance of a Policy Period Equitas argues that Wasa hinged not just on the lack of a choice

- of

- law clause , but also on the fundamental importance of a policy period to English insurance law. That argument is not without force. As Equitas argues , a policy34 period is indeed accorded “fundamental importance” u nder English law. Id. ¶ 15 (Lord Brown). As Lord Brown pointed out in Wasa , if the policies were back

- to
back, then Lexington, the insurer in that case , could have recovered the full loss no matter how short the period of cover, whether it was three years or “only three months. ” Id. Disregarding a policy period would, Lord Collins wrote in Wasa , lead to some “very uncommercial consequences. ” Id. ¶ 111. Similarly, Lord Mance explained that the “all sums” doctrine was a “fundamental and surprising change[] in the ordinary understanding . . . of a reinsurance period. ” Id. ¶ 40. Vesta did not involve a policy period. Instead, it involved “uncommercial and technical points” of English law : the ability of an insurer to deny coverage based on a breach of a warranty that had no causal relationship to the insured’s losses. Id. ¶ 56 (Lord Collins). In that area, Lord Mance explained in Wasa , “English law has long been recognised as unduly stringent and in need of review. ” Id. ¶ 50. Even so, Equitas’s theory falls shor t for several reasons. To start, the opinion of Lord Brown, who relied most heavily on the fundamental nature of the policy period, did not gain majority support . Lords Mance and Collins, who were joined by a majority, put decisive weight on the inability to predict the governing legal regime at the time the contract was executed. See id. ¶ 49 (Lord35 Mance) (distinguishing Vesta on the basis that there was an “identifiable legal dictionary” to interpret the contracts in that case); id . ¶ 108 (Lord Collins) (describing the lack of an “identifiable system of law” as in “complete contrast”
to Vesta ). 7 Moreover, as even Equitas’s English law expert acknowledges, the back

- to
- back presumption is not “confined to such unattractive type s of c ase [s] ” like Vesta . J. App’x 1178, ¶ 41. Rather, Lord Collins in Wasa explained that modern English law would likely apply the presumption even in a case involving a dispute about the definition of the very risk that the parties bargained to insure. [2010] 1 AC 180 (HL) ¶¶ 64

- 65 , citing St. Paul Fire & Marine Ins. Co. v. Morice [1906] 11 Com. Cas. 153, a case that involved the meaning of “all risks of mortality” in an insurance dispute about coverage of a bull who was slaughtered on board a ship after contr acting foot and mouth disease. More significantly , Equitas’s “fundamental importance” argument relies on its view that the all sums rule is “anathema” to English insurance law.

7 While on the Supreme Court of the Uni ted Kingdom, Lord Mance gave a speech to an association of insurers, during which he repeated that Wasa was based on the absence of a “ special dictionary meaning” of the terms of the original insurance that “could [have] be[en] carried through into the rei nsurance.” Lord Mance, Supreme Court of the United Kingdom, Keynote Address to Association internationale de Droit des Assurances, Copenhagen ¶ 10 (June 12, 2015) , https://www.supremecourt.uk/docs/speech

- 150612.pdf

.36 Appellant’s Br. 21

- 22, 32. That view, however, rests on a misreading of Munici pal Mutual [1998] Lloyd’s Rep. (Civ) 421, as well as an incomplete account of English law. In Municipal Mutual , England’s Court of Appeal declined to apply the back

to
- back presumption to hold that the coverage period of an insurance policy was

co - extensiv e with the coverage periods of several successive reinsurance policies. Id. at 435

- 36 (Hobhouse, L.J.). All policies, however, were given an English law construction, and the reinsurances’ coverage periods were textually narrower than the original insuranc e’s coverage period. Id. Additionally, the Court of Appeal rejected an all sums allocation of liability in part because the case did not involve “the special problems of liability for asbestosis claims arising from long periods of potential exposure. ” Id. at 436. Instead, t he facts of Municipal Mutual presented “much simpler questions. ” Id. And as outlined above, while English law does not generally follow the all sums rule, in more complex cases involving asbestos liability, English law has follow ed a ve rsion of the all sums rule , albeit in circumstances that are not present here . After the House of Lords initially eschewed apportioning tort liability jointly and severally between multiple employers who exposed their employee s to asbestos, see Barker [2006] 2 AC 572 (HL) ¶ 49 (Lord Hoffman n ),37 Parliament passed the Compensation Act 2006 c. 29 § 3, making “each” employer who materially increases the risk that its employee would develop mesothelioma jointly and severally liable “ in respect of the whole of the damage caused by the mesothelioma

. ” Trigger [2012] UKSC 14 ¶ 57 (Lord Mance). True, the text of the Act applies to employer tort liability, not insurance liability. But that did not stop the United Kingdom Supreme Court from holding that where the Act holds an employer jointly and severally liable, its insurers are likewise jointly and severally liable, on an all sums basis, with various rights to contribution, even if the employer has multiple successive insurers or was un in sured for part of the emplo yee’s exposure. Zurich [2015] UKSC 33 ¶¶ 45

- 51, 54, 94

- 97 (Lord Mance); see also Trigger [2012] UKSC 14 ¶¶ 49

- 50, 71

- 74 (Lord Mance). In so holding, the Court analogized “facultative liability insurance” to facultative reinsurance, in that both “normally r espond [] to whatever may prove to be the liability incurred by the insured. ” Zurich [2015] UKSC 33 ¶ 45 (Lord Mance); see also Trigger [2012] UKSC 14 ¶ 69 (Lord Mance)

. Notably, one dissenting Lord invoked Municipal Mutual and Wasa

– as Equitas does here

– to emphasize the fundamental importance of a policy period under English insurance law

. Zurich [2015] UKSC 33 ¶¶ 15 3

- 55 (Lord Sumption) . But, again, that did not stop the majority, which38 acknowledged that principle, from imposing joint

- and

- several liabili ty upon insurers nonetheless. I d. ¶¶ 40, 46 (Lord Mance). There is no reason to think it would stop that majority from imposing joint

- and

- several liability on a reinsurer in the present circumstances either. To be clear, we do not know whether Zurich , if applied here , would lead to the same outcome concerning ICSOP’s liability to Dole or Equitas’s liability to ICSOP. Zurich recognizes various rights of contribution, including under principles of self

- insurance, see [2015] UKSC 33 ¶¶ 65

- 82, which may or may not differ from California’s and Hawaii’s approaches to contribution. The point of our reliance on Zurich is that the case recognizes a circumstance where an insurer can be jointly and severally liable for the whole of the insured’s tort liability even though that liability might have accrued after the policy period’s expiration. That recognition defeats Equitas’s argument that the all sums rule is anathema to English law. Accordingly, Zurich reinforce s the conclusion that English la w would construe the reinsurance policy in this case as co

- extensive with the ICSOP

- Dole policy.39 ii. Change in Law Equitas next underscores that even if the presence of a choice

- of

- law clause distinguishes this case from Wasa , the all sums rule first came into existence long after the parties executed the ICSOP

- Dole policy and the reinsurance policy (and, for that matter, long after the policy periods ended). For that reason, Equitas insists, the parties here could not have predicted an all sums appro ach to allocating liability, and an English court would therefore not impose that approach. Again, that argument has some merit. T he Lords in Wasa were troubled not only by the inability to predict the governing legal regime but also by the resulting inab ility to predict the substantive rules of that regime. For example, Lord Phillips suggested that it was “unlikely” that the parties could have anticipated that the same words in the original insurance and the reinsurance would mean “radically” different th ings under different legal systems. Wasa [2010] 1 AC 180 (HL) ¶¶ 4

- 5. Lord Collins explained that in Vesta the “substance of the foreign law as to the consequences” of the 24

- hour watch clause “could be ascertained at the outset , ” whereas , in Wasa , it was impossible to predict that a40 U.S. court would apply the all sums rule because U.S. courts had not yet deve loped that rule when the parties executed their agreements. Id . ¶¶ 108

- 09. That point cannot be decisive, however. The reinsurers in Wasa made the exact same argument. Assuming that the reinsurers were correct that Pennsylvania law had only later adopted the all sums rule, Lord Mance asked, “would that matter? ” Id. ¶ 53. Noting an observation of Lord Justice Longmore, who sat on the appellate court from which the reinsurers had appealed, Lord Mance explained the Court of Appeal’s view that “[i]t would have been ‘nothing to the point’” if in Vesta , for example, “‘the relevant Norwegian statute had been enacted after the inception of the policy.’ ” Id. (citation omitted). “[R]einsurers must,” Lord Justice Longmore had explained, “take the risk of any change in the law. ” Id. And there, as here, “one is only talking at most about a change in the construction put at common law on a particular contract wording. ” Id. Likewise, Lord Collins explained that “[i]t is elementary” that insurers and reinsurers “take[] the risk of changes in the law” and cannot “be heard to say that [they] rated the risk by reference to the then current scope of the original insured’s duty . . . provided that the risk is within the reinsurance

. ” Id. ¶ 110.41 Thus, when parties fail to define in their insurance agreements a term such as “all sums”

– the term that invokes the all sums rule

– they adopt the meaning a common law court will ascribe to it, and thereby bear the rewards and risks of the common law’s dynamic nature. See Trigger [2012] UKSC 14 ¶ 70 (Lord Mance) , citing Kleinwort Benson Ltd v. Lincoln C ity C ouncil [1999] 2 AC 349 (HL) 378

- 79 ( Lord Goff ) (explaining that “w hen

. . . judges state what the law is, their decisions

. . . have a retrospective effect ” not only “ in relation to the particular

case ” but “ also inevitabl [y] in relation to other cases in which the law as so stated will in future fall to be applied ” because no “ common law system

. . . can operate otherwise if the law is [to] be applied equally to all and y et be capable of organic change ”); Woodland v. Essex County Council [2013] UKSC 66 ¶ 28 (Lady Hale) ( “The common law is a dynamic instrument. It develops and adapts to meet new situations as they arise. Therein lies its strength. But therein also lies a da nger, the danger of unbridled and unprincipled growth to match what the court perceives to be the merits of the particular case.” ). To that end, turning back to Zurich and Trigger , the United Kingdom Supreme Court acknowledged in those decisions that the relevant policies were executed before the various legal developments leading to those decisions had42 occurred

. See Zurich [2015] UKSC 33 ¶ 149 (Lord Sumption); Trigger [2012] UKSC 14 ¶ 70 (Lord Mance). But that did not stop the Lords from imposing liabili ty upon insurance carriers in Trigger and joint

- and

- several liability upon insurance carriers in Zurich . It would be incongruent to make the change

- of

- law point decisive here where it was not in those cases, and unfaithful to our mandate to predict how the United Kingdom Supreme Court would decide an issue to do something directly contrary to what it has done in the past. That is especially true because the reinsurance policy in this case expressly warrants that coverage is “[a]s [ o ] riginal” and that it wil l provide the “ same gross rate, terms and conditions as and [will] follow the settlements of [ICSOP].” J. App’x 777, 779, 793, 796. Equitas therefore cannot confine its current obligations to what those obligations would have been had this dispute arisen f ifty years ago.

* * * This case unquestionably presents an issue that was expressly left open in Wasa , and has not since been resolved by the United Kingdom Supreme Court. We thus cannot be certain that our prediction as to how that Court would resolve
t his case had it been litigated in England is correct. But it remains our43 responsibility to make our best considered judgment of how that Court would decide the issue, based on the available precedents. 8 We have carefully reviewed those precedents, and for the reasons set forth above, we conclude that under English law the back

- to
- back presumption is strong, and we do not believe that the United Kingdom Supreme Court would condition that presumption on the importance of a policy term or the predictability of how a foreign court might later interpret that term. Accordingly, the back

- to
- back presumption applies to the reinsurance policy, thus rendering the parties’ obligations co

- extensive. B. Late Notice of Claim Separately, Equitas claims that ICSOP’s failure to provide timely notice of claim allows it to fully repudiate the reinsurance policy. Equitas concedes,

8 In certain domestic cases, where a federal court must decide an unsettled question of the law of a State, it is possible for that court to certify the question to the highest court of that State. See, e .g. , 2d Cir. Local R. 27.2(a) (“If state law permits, the court may certify a question of state law to that state ’ s highest court.”); 22 N.Y.C.R.R. § 500.27(a) (authorizing the New York Court of Appeals to review certain certified questions). No such proce dure is available here, so we are left to our own reading of English law. See Terra Firma Invs. (GP) 2 Ltd. , 716 F.3d at 301 (Lohier, J. , concurring) (explaining that, “[i]n the context of cross

border commercial disputes, there is every reason to develop a similar formal certification process pursuant to which federal courts may certify an unsettled and important question of foreign law to the courts of a foreign country”).44 however, that timely notice is not a condition precedent to a claim for coverage under the rein surance policy. Where timely notice is not a condition precedent, English law rejects the defense of partial repudiation

– that is, an insurer’s ability to reject a claim for coverage

. See Friends Provident Life & Pensions Ltd. v. Sirius Int’l Ins. [2005] EWCA (Civ) 601 ¶ 32 (Lord Mance). That would seem to foreclose Equitas’s more radical defense of full repudiation based on late notice of claim. Nevertheless, Equitas’s English law expert opines that on “extreme facts,” “dishonest non

- notification” that causes “serious prejudice to” an insurer might give rise to the defense of full repudiation of the contract. J. App’x 1189

- 9 0, ¶¶ 70

- 73 . Conspicuously, neither he nor Equitas cite a case reaching that result , which would in any event sit in some tension wi th English law’s rejection of a partial repudiation defense. E ven accepting for a moment the expert’s proposed standard, however, the facts that Equitas alleges

– that ICSOP notified Equitas some six years after becoming aware that a claim was likely und er the reinsurance policy, that ICSOP failed to inform Equitas of the likely claim in response to queries about other claims , and that some of ICSOP’s failures may even have been deliberate

– do not suffice to show serious prejudice

. Equitas’s expert defin ed serious prejudice as45 something that goes to the “root of the whole” contract. Id. at 1189

- 90 , ¶¶ 68, 72

. We see none of that i n this record , and thus no reason to go where no English court has gone. Accordingly, we agree with the district court that Equitas’s late

notice defense is unavailing. CONCLUSION For the reasons set forth above , we AFFIRM the judgment of the district
court
.