You are in a situation where there's a legal dispute between you and Expedia. Amex isn't part of that dispute, but they decided, on their own, that there was enough info there not to honor the charge. Since you got a letter from the CA, I would mail them a DV letter and I personally would add a couple of statements within that DV that asks something like "Please include a detailed breakdown of the charges you say I owe" and "Please include a copy of the agreement between Expedia and I that demonstrates the charge you say I owe" or something along those lines. DVs are allowed by federal law, and federally speaking, the CA doesn't have to provide that. However, your state may require that, and if not, it never hurts to ask.
Aside from the DV, I would put heat on Expedia and I would send the exec(s) a letter explaining what happened and ask them directly what the charges are for, etc. I would also file a complaint with the BBB and any state-sponsored consumer groups. That'll put some heat and maybe they'll back away.
Before doing any of the above, I would read your agreement with Expedia. Maybe the charge is legit, even if you didn't go on the trip. Maybe they require travel insurance. Who knows. But read that agreement.
Back to Amex. They aren't a judge and jury on charges. They don't have the final say in anything pertaining to any agreement you had between you and Expedia. They sided with you and decided not to honor that charge.
