The Fifth Circuit upheld the application of a Texas choice-of-law clause and most of a defense-and-indemnity ruling in Anadarko’s favor. It vacated the judgment to the extent it could require coverage for punitive or exemplary damages and remanded the treatment of fees from the underlying suit.
Holding that the insurer's annual aggregate cap did not plainly apply to property damage, the panel reversed dismissal of the county's declaratory judgment claim and remanded for consideration of extrinsic evidence.
A unanimous ruling in Galette v. New Jersey Transit Corp. narrows the federal arm-of-the-state test to corporate form and formal liability for judgments, siding with New York over Pennsylvania and exposing quasi-public authorities with hundreds of millions in annual revenue to out-of-state suits.