Five years ago, the far-reaching consequences of the Israeli-Palestinian Conflict met Hollywood, as it led to the suspension of Dig’s production. USA Network’s Dig, a mystery-thriller miniseries that is set in Jerusalem and follows an American FBI agent’s investigation into the murder of a young archaeologist, had to reroute their production from Israel to New Mexico due to mounting tensions in the region. This resulted in a major legal dispute between Dig‘s production company and their insurer. Although the dispute was initially resolved in the insurer’s favor, this week Universal Cable Productions won an appeal against Atlantic Specialty Insurance Company.
The decision to redirect Dig‘s production came in the wake of a 2014 Hamas rocket attack on Israel. At this time, three Israeli teens were kidnapped and a Palestinian teen was in turn abducted and killed. These tragedies escalated with a subsequent rocket attack. Israel in turn responded with “Operation Protective Edge.” When the U.S. Department of State issued warnings about the rising tensions in the region, the Universal security team advised Dig’s team to postpone and eventually relocate the miniseries’ production.
Universal later sought a $6.9 million reimbursement for this move, however Atlantic rejected their request and claimed coverage exclusion due to war or warlike action.
According to The Hollywood Reporter, Atlantic’s chief underwriting officer, Peter Williams, had previously wrote in an internal email addressed to the claims investigator that this was a “covered claim they have immanent [sic] peril. Unless you are going to invoke the war exclusion.” As time would have it, that’s exactly what Atlantic did.
But the dispute between Universal and their insurer did not end there, as Universal argued that coverage should have been provided regardless of warlike tensions in the region given that acts of terrorism are not excluded. This rose questions as to the realities of warfare between Israel and Palestine.
Atlantic found support for their claims at the district court level. In this initial ruling, the district court judge ruled that there could be no decision made in Universal’s favor given the sophistication of the policy. Universal countered this by noting the ambiguity of the contract, which should be held against the insurer.
Since the district court ruling, an appeals court has determined that the initial decision was wrong.
The opinion of the appeals court of the 9th Circuit stated the following: “Both ‘war’ and ‘warlike action by a military force’ have a specialized meaning in the insurance context and the parties had, at the least, constructive notice of the meaning. The district court erred when it failed to apply that meaning. Under that specialized meaning, both ‘war’ and ‘warlike action by a military force’ require hostilities between either de jure or de facto sovereigns, and Hamas constitutes neither.”
In other words, the 9th Circuit stands to reverse the decision that favored Atlantic and will instead support Universal’s claims. Their full opinion can be found here.
Circuit Judge A. Wallace Tashima detailed the complex history of the Israeli-Palestine conflict for the panel. In his writing, he pointed out that the United States has formally acknowledged neither Gaza nor Palestine as sovereign nations.
Tashima later applied the term “war” in the context of the insurance contract. This involved the examination of many past debates, including cases that arose from the 9/11 attacks in New York City.
“Even if the executive branch’s position were not per se binding on this court, its position certainly informs our analysis when we face a political question,” Tashima continued in the court’s decision. “After considering the factual and historical record and the executive branch’s position, we conclude Hamas is not a de jure or a de facto sovereign. Thus, Hamas’ conduct in the summer of 2014 cannot be defined as ‘war’ for the purposes of interpreting this policy.”
The opinion went on to state the following: “Here, the record demonstrates that the efficient proximate cause for the relocation was Hamas’ rocket fire from Gaza into Israel. The district court’s reliance on Israel’s indirect contribution to continued hostilities from Hamas was not supported by any evidence in the record. Atlantic’s letter denying coverage noted that Universal had to relocate because of ‘heightened violence in [Israel]’ due to Hamas ‘firing rockets into those cities [Tel Aviv and Jerusalem]’ where filming was likely to occur. More importantly, the district court did not consider what the predominant cause of Dig’s relocation actually was, and Atlantic provides no evidence that Israeli retaliation was the predominant cause of Universal’s losses. The district court erred in holding that because Israel indirectly contributed to Hamas’ conduct, Israel’s conduct as a sovereign nation triggered the war exclusion here.”
Ultimately, this reasoning resulted in favorable ruling for Universal against Atlantic.
Season one of Dig first aired in 2015 on USA Network, and is now available for streaming on Amazon Prime. It was created by Tim Kring and Gideon Raff, and stars Jason Isaacs (Peter Connelly), Anne Heche (Lynn Monahan), and Ori Pfeffer (Detective Golan Cohen).