### I N THE UNI TED STATES COURT OF APPEALS FOR THE FI F TH CI RCUI T

No. 12-30230

IN RE: DEEPWATER HORIZON

-------------------------------------------------- RANGER INSURANCE, LIMITED, Plaintiff - Appellee
v. TRANSOCEAN OFFSHORE DEEPWATER DRILLING, INCORPORATED; TRANSOCEAN HOLDINGS, L.L.C.; TRANSOCEAN DEEPWATER, INCORPORATED; TRITON ASSET LEASING GMBH, Intervenor Plaintiffs - Appellees
v. BP P.L.C.; BP EXPLORATION & PRODUCTION, INCORPORATED; BP AMERICAN PRODUCTION COMPANY; BP CORPORATION NORTH AMERICA, INCORPORATED; BP COMPANY NORTH AMERICA, INCORPORATED; BP PRODUCTS NORTH AMERICA, INCORPORATED; BP AMERICA, INCORPORATED; BP HOLDINGS NORTH AMERICA, LIMITED, Defendants - Intervenor Defendants - Appellants

-------------------------------------------------- CERTAIN UNDERWRITERS AT LLOYD’S LONDON, Plaintiff - Appellee
v. U n i t e d S t a te s C o u rt o f A p p e al s F i f t h C i rc u i t 

### F I L E D Aug ust 29, 2013 Ly l e W . Cay ce Clerk Case: 12-30230 Document: 00512357465 Page: 1 Date Filed: 08/29/2013No. 12-30230

TRANSOCEAN OFFSHORE DEEPWATER DRILLING, INCORPORATED; TRANSOCEAN HOLDINGS, L.L.C.; TRANSOCEAN DEEPWATER, INCORPORATED; TRITON ASSET LEASING GMBH, Intervenor Plaintiffs - Appellees
v. BP P.L.C.; BP EXPLORATION & PRODUCTION, INCORPORATED; BP AMERICAN PRODUCTION COMPANY; BP CORPORATION NORTH AMERICA, INCORPORATED; BP COMPANY NORTH AMERICA, INCORPORATED; BP PRODUCTS NORTH AMERICA, INCORPORATED; BP AMERICA, INCORPORATED; BP HOLDINGS NORTH AMERICA, LIMITED, Defendants - Intervenor Defendants - Appellants

Appeal from the United States District Court for the Eastern District of Louisiana

Before JOLLY, BENAVIDES, and HIGGINSON, Circuit Judges. E. GRADY JOLLY, Circuit Judge: The original opinion in this c ase was filed on March 1 , 2013. 1 Because this

case involves important and determinative quest ions of Texas law as to which there is no controlling Texas Supreme Court p r ecedent, the panel, upo n t he petition for rehearing, unanimously w ithdraws t he previous opinion and substitutes the following certified questions to the Supreme Court of Texas. CERTIFICATION FROM THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT TO THE S UPREME COURT OF TEXAS, PURSUANT TO THE TEXAS C ONSTITUTION ART. 5 § 3-C AND TEXAS RULE OF APPELLATE PROCEDURE 58.1.

1 In re Deep w a ter H

ori z on , 710 F. 3d 338 ( 5th Cir. 2013)

.

2 Case: 12-30230 Document: 00512357465 Page: 2 Date Filed: 08/29/2013No. 12-30230

TO THE SUP R E M E COURT OF TEXAS AND THE HONORABLE JUSTICES THEREOF:

I. Style of the Case: Parties and Counsel The style of the case is In re: Deepwater Horizon: Ranger In s u r a n c e , Limited, P laintiff–Appellee v. Transocean Offshore De e p w a ter Drilling, I n c o r p o r a t e d ; T r a n s o c e a n H o l d i n g s , L

. L

. C

. ; T r a n s o c e a n D e e p w a t e r , Incorporated; Triton Asset Leasing GMBH, I ntervenor Pla intiffs–Appellees v . BP P.L.C.; BP Exploration & Production, Incorporated; BP Ameri c a n P r o d u c tion Company; BP Corporation North A m e rica, Incorporated; BP Company North America, Incorporated; BP Products North America, Incorporated; BP A merica, Incorporated; BP Holding s N orth America, Limited Defendants–Intervenor D e fe n d a n t s

–A p p e l l a n t s ; C e r t a i n U n d e r w r i t e r s a t L l o y d ’ s L o n d o n , Plaintiff–Appellee, Transocean Offshore Deepw a ter Drilling, Incorporated; Transocean Holdings, L.L.C.; Tr a n s o c e a n D e e p w a t e r , I n c o r p o r a t e d ; T ri t on Asset Leasing GM B H , I ntervenor P laintiffs–Appellees v. BP P.L.C.; B P Exploration & Production, Incorporated; BP America Production Company; BP Corporation N orth America, I ncorporated; BP Company North America, Incorporated; BP Products North America, Incorporated; BP A merica, Incorporated; BP H oldings North A merica, Limited, Defendants–Intervenor Defendants–Appellants. This is Case N o. 1 2-30230, i n the United States Court of Appeals for the Fifth Circuit,

on appeal from the j udgment of the United States District Court f or the Eastern District of Louisiana. Federal jurisdiction is premised upon 28 U.S.C. § 1333. The names of all t h e parties to the case, e ach of whom is represented by counsel, and the respective names, addresses, and telephone numbers of their counsel, are as follows:

• Ranger Insurance, Limited, plaintiff in the district court and appellee in this court, represented by Michael John Maloney of M a l o n e y, Martin &

3 Case: 12-30230 Document: 00512357465 Page: 3 Date Filed: 08/29/2013No. 12-30230

Associates, Suite 100, 3 401 Allen Parkway, Houston, TX 77019-0000, Tel. 713-759-1600;

• Transocean Offshore Deepwater Drilling, Incorporated; Transocean Holdings, L.L.C.; Transocean Deepwater, Incorporated; and Triton Asset Leasing GMBH, i ntervenor–plaintiffs in the district court a n d appellees in this court, represented by Steven Lynn Roberts, of Sutherland Asbill & Brennan, L.L.P., Suite 3700, 1 001 F annin S t r e et, H ouston, TX 77002- 6760, Tel. 713-470-6192;

• BP, P.L.C.; BP Exploration & P r oduction, Incorporated; BP American P r oduction Company; BP Corporation North America, Incorporated; BP Company N orth America, Incorporat e d ; B P Products North A merica, Incorporated; BP America, Incorporated; BP Holdin g s North America Limited, defendants and defendant-intervenors in the d istrict court and appellants in this court, represented by David B. G oodwin o f Covington & Burling, L.L.P., 35th Floor, 1 Front Street, San Francisco, CA 94111-5356, Tel. 415-591-6000; and

• Certain Underwriters a t Lloyds London, plaintiff i n the district court and appellee in this co u r t , represented by Richard N. Dicharry of Phelps D u nb a r, L .L.P., Suite 2000, 365 Canal Street, 1 Canal Place, N ew Orleans , LA 70130, Tel. 504-556-1311.

II. Statement of the Case Transocean Holdings, Inc. (“Transocean”) owned the Deepwater Horizon , a semi-submersible, mobile offshore drilling u nit. I n April 2010, the Deepwater Hori z o n s a n k into t he Gulf of Mexico a fter burning for two days following an onboard explosion (“Incident” or “Deepwater Horizon Incident”). At the time of the Incident, t he Deepwater Horizon was e ngaged i n exploratory d r i l ling activities at the Macondo Well under a Drilling Contract between the Appellant BP A m e rican Production Company’s (together with its affiliates, “BP”)

4 Case: 12-30230 Document: 00512357465 Page: 4 Date Filed: 08/29/2013No. 12-30230

predecessor and Transocean’s predecessor. This Contract required Transocean to maintain certain minimum insurance coverages for the benefit of BP. The extent to wh ich these p olicies covered BP’s pollution-related liabilities arising from the Deepwater Horizon Incident is the subject of this appeal. The Insurance Contracts Transocean held insurance policies with a primary l i ability insurer, Ranger Insurance Ltd. ( “Ranger”), as well as several excess liability insurers led by L ondon market syndicates (“Excess Insurers;” together with Ranger, “Insurers”). Transocean’s i n s u rance policy with Ranger p rovided at least $50 million of general liability c o v e r a g e , and its p olicies with the Excess Insurers formed f our layers of e x c ess coverage d i r e c tly above t he Ranger Policy that provided at least $700 million of additional general liability cover a g e . T he Ranger and Excess Policies contain materially identical provisions. 2 The Policy terms that are important to this case a re “Insured” and “Insured C ontract.” The Policies define “Insured” as including the Named Insured, other parties, and (c) any person or entity to w hom the “Insured” is obliged by any o ral or written “Insured C ontract” (including contracts which are in agreement but have not been formally concluded in writing) entered into before any relevant “Occurrence”, to provide insurance such as is afforded by this Policy . . . . The Policies define “Insured Contract” as follows: T h e w ords “Insured Contract”, whenever used in this Policy, sha l l mean a ny written or o ral contract or agreement entered into by t h e “Insured” (including contracts which are in agreement but have n ot been formally concluded in writing) a nd pertaining to b u s iness under which the “Insured” a s s u mes the tort liability of another party to pay for “ Bodily Injury”, “Property Damage”, “Personal Injury” or “Advertising Injury” to a “Third Party” or organization.

2 As the d is trict court noted ( and the Ins urers have not d is p uted ) , this s im ilarity allow s the court to treat all of the Ins urers as one for p urp os es of analys is in this cas e. 5 Case: 12-30230 Document: 00512357465 Page: 5 Date Filed: 08/29/2013No. 12-30230

Tort Liability means a l iability that would be imposed by law in t h e absence of any contract or agreement. 3 The Drilling Contract The Drilling Contract d e f i nes BP’s and Transocean’s obligations to one another, separately identifying the liabilities each party assumes. Article 20 of the Contract is a s ingular provision that imposes upon T ransocean an insurance requirement: 20.1 INSURANCE Without limiting the indemnity o bligations o r liabilities of CONTRACTOR [Transocean] or its insurer, at all times during t h e term of this CONTRACT, CONTRACTOR shall m aintain insurance c overing the o p e rations t o be performed under this CONTRACT as set forth in Exhibit C

. (Emphasis added.) E xhibit C to the Drilling C ontr a c t i s titled “Insurance Requirements” and esta b lishes the types and minimum level of coverage that Transocean is ob l igated to maintain. This Exhibit provides that Transocean shall c a r ry a ll insurance at its own expense and that the policies “shall be endorsed to p rov i d e that t here will be n o recourse a gainst [BP] for payment of premium.” Further, Exhibit C states: [BP], its subsidiaries and affiliated companies, co-owners, and joint venturers, i f any, and their employees, officers and agents shall be named a s additional insureds in each of [Tr a n s o cean’s] policies, except Workers’ Compensation for liabilities assumed by [Transocean] under the terms of t his Contract

. (Emphasis added.) The Procedural History

3 The Policies contain f urth e r p rovis ions ad d res s ing other ins ured s . End ors em ent 1 p ro vid es a g eneral cond ition that ad d itional ins ured s are autom atically includ ed w here required by w ritten contract. Cond ition D

. 1 to Section I coverage lim its t he coverage of ad d iti o n a l i n s u red s : Trans ocean has the p rivilege to nam e ad d itional ins ured s only to the extent as is required und er contract or agreem ent. 6 Case: 12-30230 Document: 00512357465 Page: 6 Date Filed: 08/29/2013No. 12-30230

Following the Incident, BP notified the I nsurers of its Deepwater H orizon

related losses. The E xcess Insurers and Ranger eac h f i l e d a o ne-count declaratory judgment action agains t B P

. 4 The Insurers’ complaints are substantively identical—both request a declaration that the Insurers have “no additional-insured obligation to BP with respect to pollution claims a gainst BP for oil emanating from BP’s well” as a result of the Deepwater Horizon Incident. The Insurers acknowledge that “the [D]rilling Co n t r a c t requires additional insured protection in favor of certain BP entities.” Thus, all parties concede that the Drilling Contract is an “insured contract” under the p olicies and t h a t the policies provide some insurance coverage to BP a s an a dditional ins u red. The issue in contention is the scope of BP’s insurance coverage. In July 2011, BP moved for judgment on the pleadings, under Rule 12(c) of t h e F e d eral Rules o f Civil Procedure, against the Insurers. Relying upon Texas and Fifth Circuit precedent as developed i n Evanston I ns. Co . v . ATOFINA P

etrochems., Inc. , 2 5 6 S

. W

. 3d 660 (Tex. 2 008), and in Aubris Resources LP v. St. Paul Fire & Marine Ins. C o. , 566 F .3d 483 (5th Cir. 2009), BP argue d ( 1) it was an “additional insured” under the i nsurance policies at issue and (2) the insurance policies alone—and n ot the i ndemnities de t a i l ed in the Drilling Contract—govern the s c ope of B P’s c overage rights as an “additional insured.” 5 The district court found ATOFINA and A u b r i s a re distinguishable from the case at h and and denied BP’s Rule 12(c) motion i n November 2011. I n

4 In February 2011, the Jud icial Panel on M ultid is trict L itiga t i o n t r a n sf e r r e d b oth cas es t o t h e U nited States D is trict Court for the Eas tern D is trict of L ouis iana for coord i n a t e d p r etrial proceed ings w ith the other D eep w a ter H ori z on - related litigation p end ing in t h a t c o u r t

. In M arch 2011, T rans ocean moved f or leav e t o i n t ervene in the cons olid ated actions , w hich
m otion the court granted

.

5 BP argues this m otion d id not require a d eterm ination of any rights or obligations of BP or Trans ocean to one another und er any p rovis ions of the D rilling Contract. 7 Case: 12-30230 Document: 00512357465 Page: 7 Date Filed: 08/29/2013No. 12-30230

particular, the c ourt read T ransocean’s insurance obligation i n Exhibit C to the Drilling Contract to be to name BP as a n “ additional insure d [] i n each of [Transocean’s] policies

. . . for liabilities assumed b y [ T ransocean] under the terms of the contract.” T hat is, the district court found B P’s proffered reading of this clause unreasonable, and read the clause as if t h e r e w e r e a comma following the phrase “except Workers’ Compensation;” this r e ading r endered those three words t heir own discrete c arve o ut from liability. Reasoning further that this interpretation required Transocean to name BP as an insured only for liabilities Transocean explicitly assumed under the contract, t h e c o urt then looked to Article 24 of the D rilling C ontract to conclude that BP was not covered under Transocean’s policy for the pollution-related liabilities deriving from the Deepwater Horizon Incident (as the s p i l l o riginated below the surface of the water). 6 Following further submissions of the parties, th e d i strict court then entered a partial final judgment on the Insurers’ complaints under Rule 54(b).

6 With res p ect to pollution- related liabilities , Article 24. 1 of the Contract p rovid es : CO N TRACTO R [ Trans ocean] s hall as s um e full res p ons ibi l i t y f or and s hall p rotect, releas e, d ef

end , ind em nif

y, and ho l d CO MPANY [ BP] and its joint ow ners har m l e s s f

rom and agains t any los s , d am age, exp ens e, claim , f ine, p enalty, d em and , or liability for pollution or cont a m i n ation , includ ing control and rem oval thereof, or iginating on or ab ove t he sur face of the land or w ate r , from s p ills , leak s , or d is charges of f uels , lubricants , motor oils , p ip e d op e, p aints , s olvents , ballas t, air em is s ions , bilge s lud ge, g arbage, or any other liquid or s olid whats oever in p os s es s ion and control of CO N TRACTO R

.

. . . ( Em p has is ad ded

. ) Article 24. 2 then p rovid es : CO M PANY [ BP] shall as sum e f ull res p ons ibility f

or and s hall p rotect, releas e, d ef end , ind em nif

y, and hold CO N TRACTO R [ Trans ocean] harm les s from and agains t any los s , d am age, exp ens e, claim , f ine, p enalty, d em and , or liability for pollution or contam ination , includ ing control and rem oval thereof, ar ising out of or conne cte d w ith ope r ations unde r this C O N TRA C T he r e unde r and not assum ed b y C ON TRA C TO R in A rticle 2 4
. 1 ab ove
. . . . ( Em p has is ad ded

. ) 8 Case: 12-30230 Document: 00512357465 Page: 8 Date Filed: 08/29/2013No. 12-30230

Effective March 1, 2012, the court h e l d “by its terms, the Court’s Order and Reasons [on BP’s mo t i o n for judgment on the pleadings] not only denied BP’s motion b ut also granted judgment on the pleadings against [BP] and i n favor of the Plaintiff Insurers on the Plaintiff Insurers’ compla i nts.” 7 BP timely appealed. A unanimous panel of this court initially reversed the district court’s judgment. In re Deepwater Horizon , 7 10 F.3d 338 (5th Cir. 2013). The Insurers and Transocean petitioned for rehearing, and we w ithdrew that ruling to certify the following question to the Texas Supreme Court. III. Legal Issues BP appeals the district court’s conclusion that it is not entitled to c overage under the policies, b ecause Transocean was only r e q u ired to n ame BP as an

a d d i t i o nal insured as to the risks Transocean assumed i n the indemnities provisions of the Drilling Contract. A. The first issue is the scope of BP’s coverage as an additional insured, and whether the umbrella policy itself determines the e x t ent of coverage, or the indemnity clauses in the Drilling Contract effectively limit BP’s coverage. In 2008, t h e T exas S u preme C ourt addressed “ whether a commercial umbrella insurance policy that was purchased to s ecure the insured’s indemnity obligation in a service contract with a third p a rty also provides direct liability coverage for t h e third p a r t y . ” A TOFINA , 256 S.W.3d at 662. Both the
ap p e l l a n ts and t he appellees agree this case is i nstructive, but they proffer different applications of its h olding to the facts of the case at i ssue. Uncertainty regarding the outcome under ATOFINA ultimately triggered this certification.

7 In its brief, BP notes that this p artial f inal j ud gm ent w as entered in f av o r of the Ins urers “and Trans ocean” and argues that Trans ocean is not a p rop er p art y t o this ord er. BP’s Rule 12( c) m otion w as d irected only to the Ins urers ’ com p laints and claim s

— not agains t Trans ocean. 9 Case: 12-30230 Document: 00512357465 Page: 9 Date Filed: 08/29/2013No. 12-30230

In ATOFINA , ATOFINA owned an oil refinery at which it hired Triple S to perform maintenance functions. I d. at 662. ATOFINA and Triple S entered

a services contract which stipulated that ATOFINA was to be named an additional insured i n each of Triple S ’s policies. S pecifically, thi s provision stated: [ATOFINA], its p arents, subsidiaries and affiliated companies, and t h eir respective employees, officers and agents shall be nam e d a s a d d i t i onal insured in each of [Triple S’s] policies, except W orker s ’ Compensation; however, such extension of coverage shall n ot apply with respect to any obligations f or which [ATOFINA] has specifically agreed to indemnify [Triple S]. 8 After a Triple S employee drowned while servicing the ATOFINA refinery, his estate sued ATOFINA and Triple S for w rongful death. Id. at 6 63. Triple S ’s insurer, Evanston, a n d AT O F I NA d isagreed o ver who was r equired to pay for the litigation; ATOFINA contended it was an additional i nsured and thus covered, while Evanston a rgued ATO F I NA’ s a gr e e m e nt t o indemnify Triple S for ATOFINA’s sole negligence precluded coverage. Id. The Texas Supreme C ourt began by noting t hat ATOFINA s ought coverag e f

r o m E vanston on the basis that it was Triple S’s additional insured—and had not sought indemnity directly from T r i p l e S. Id. at 663-64. The court next looked to Section III.B.6 of the policy, which d e fined who is an insured as A person or o rganization for w h o m y o u have agreed to provide insurance as is afforded by t his p o l i c y ; but t hat person or organization is an insured only with r espect t o o p e r a t i o ns performed by you or on your behalf, or facilities owned or used by you.

8 Petitioner’s Br. on the M erits , Ev a nston I ns. Co. v. A TOFIN

A Petrochem i ca ls , I

n c. , 256 S. W. 3d 660 ( Tex. 2008) ( N o. 03- 0647) , 2004 WL 1047377, at *4. T r i p l e S a l s o agreed to ind em nif

y ATO FINA f

rom all p ers onal injuries and p rop erty los s es s us tained d u ring the p erf orm ance of the contract, “excep t to the e x t ent that any s uch los s is attributable to the concurrent or s ole negligence, m is cond uct, or s trict liability o f [ATO FINA ]

. ” 256 S. W. 3d at 662. 10 Case: 12-30230 Document: 00512357465 Page: 10 Date Filed: 08/29/2013No. 12-30230

Id. at 664. Because, by its own terms, this S ection covered ATOFINA “with respect to operations performed by” Tripl e S, the c ourt found this Section provided ATOFINA direct coverage even for its sole negligence. 9 Id. a t 667. The court reached this conclusion, in p art, because it found “it

. . . unmistakable that the a g r e e ment in this c ase to extend direct insured status to ATOFINA as an additional insured is separate and independent from ATOFINA’s agreement to forego contractualindemnity for its own negligence.” 1 0 Id. at 670. In this a p p e a l , BP f

ocuses upon t he ATOFINA court’s statement that, “[i]nstead of looking, a s the court o f appeals d i d, to the indemnity agreement in the s ervice contract to determine t he scope of coverage, we base our decision on the terms of the u mbrella insurance policy itself.” 2 56 S .W.3d at 6 64. And it further highlights that, a s in ATOFINA , it is seeking i nsurance coverage from the Insurers, not indemnification from Transocean, and t hat the umbrella policy itself does not limit coverage for additional insureds. 1 1 Because the additional insured provision and t he indemnities pr o v i sions in t he D rilling Contract are separate and independent, because t he Policy provides c ov erage to additional insureds “such as is afforded by this P olicy,” and because T ransocean would be covered for the injuries at issue, BP contends it, too, is entitled to coverage. The Insurers and T ransocean, to t he contrary, h i ghlight t he d i f f e r ences between the additional i nsured provisions at i ssue in ATOFINA and here. The ATOFINA clause, they proffer, imposed a broad requirement to l i st ATOFINA

9 M oreover, the c o u r t s tated that “had the p arties intend ed to ins ure ATO FINA f or vicarious liability only, ‘language clearly em bod ying that intention w as available. ’” Id. at 666 ( citing McIntosh v . Scottsda l e Ins. Co. , 992 F. 2d 251, 255 ( 10th Cir. 1993) )

.

10 T h e court f

urther “d is ap p rove[ d ] of the view that this k ind of ad d itional in s u r e d requirem ent fails to es ta blis h a s ep arate and ind ep end ent obligation f or ins uring liability. ” 256 S. W. 3d at 670.

1 1 F or exam p le, that policy d oes not s ay coverage f or ad d itional ins ured s is “lim ited to the liabilities as s um ed by the N am ed Ins ured in the agreem ent betw een the N am ed Ins ured and Ad d itional Ins ured

. ” 11 Case: 12-30230 Document: 00512357465 Page: 11 Date Filed: 08/29/2013No. 12-30230

as an additional insured, whereas the analogous c lause in the Drilling Contract creates a far more l i mited obligation, n amely, to name BP as an additional insured only for liabilities Transocean specifically assumed i n the contract. Furthermore, t h e y contend that this language renders t he additional insured provision inextricable from t h e indemnities provisions of the Drilling Contract; unlike in AT

OF INA , the additional insured requirement is not separate and independent. T hey argue further the umbrella p olicy r equire s a n “Insured Contract” exist b etween the named in s u r e d a n d the third p a rty, while in ATOFINA no c o n t ract was r equired. I n c ombination, the appellees contend, these factors allow the court to consider t he indemnities clauses in the Drilling Contract in d iscerning the extent t o which B P is covered as an additional insured. Because there are p otentially important distinctions between the facts of the instant case and ATOFINA , the outcome is not entirely clear. B. In the event the court must consider whether the Drillin g C o n t r act imposes limitations upon BP’s coverage as an additional i n sured, an issue then arises of how to interpret the a dditional insured provision of that Contract. The partie s o ffer competing interpretations, and which party prevails may depend upon whether the doctrine of contra proferentem applies. T e x a s law has c onsistently held that, if an insurance coverage provisio n is susceptible to more than one reasonable inte r p r e t ation, the court must interpret that provision in favor o f the insured, so long as that interpretation is reasonable. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. Hudson Energy Co. , 811 S.W.2d 552, 555 (Tex. 1991 )

. T h e c o urt must do so even i f the insurer’s i n t e r p r e t a t i o n i s m o re r e a s o n ab l e th a n t h e i n s u r e d’s—“[i]n particular, e xcepti o n s

or limitations on l iability are s trictly construed against t he i nsurer and in favor of the insured,” id. , and “[a]n intent t o exclude coverage must b e e x pressed in

12 Case: 12-30230 Document: 00512357465 Page: 12 Date Filed: 08/29/2013No. 12-30230

clear and unambiguous language.” ATOFINA , 256 S

. W .3d a t 668, 668 n.27 (citing Hudson Energy , 811 S.W.2d at 555); see also C ertain Underwriters at Lloyds, London v . L a w , 5 7 0 F

. 3d 574, 577 (5th Cir. 2009) (“If

. . . ambiguity is found, the contractual language will be ‘lib e r ally’ construed in favor of the insured.” (citing Barnett v. Aetna Life Ins. Co. , 723 S.W.2d 663, 666 (Tex. 1987))). This rule favoring the i nsured d e riv e s , i n p a rt, from the “special relationship b etween i nsurers and insureds arising from the parties’ unequal bargaini n g power.” Balandran v. Safeco Ins. C o. of America , 972 S.W.2d 738, 741 n.1 (Tex. 1998). This aspect o f the rule’s foundation hearkens to the doctrine of contra proferentem , which construes any ambiguities against the drafter, and the “sophisticated insured” exception, w hich may apply when the policy is in

some way negotiable (i.e., it i s not a contract of a dhesion) and t he insured is as capable as the insurer of interpreting the contract. The Texas Supreme Court h a s never recognized a sophisticated insured exception to the general rule of interpreting insurance coverage clauses, nor has it e ver indicated contra proferentem would not apply in construing these clauses. See, e.g. , ATOFINA , 2 56 S.W.3d at 668 (stating t he traditional rule construing coverage clauses in favor of the insured). G iven that Texas h as long recognized its rules regarding i nterpretation of insura n c e coverage c lauses are partially derivative of the unequal bargaining power typical in m a n y n e gotiations o ver insurance c o n t r a c ts, however, it is possible t h at such an e xception may be deemed appropriate in a case like t his, where all the parties i nvolved are highly capable contractors. 1 2 On the one hand, the facts here i ndicate Insurers w ere not involved in d rafting the Drilling Contract, and thus construing a mbiguities in that contract against them might be i nappropriate. B ut on the other, the

1 2 O ne f ed eral d is trict court in Texas has f ound that the sop his ticated ins ured excep tion
m ight ap p ly und er T exas law , given the right circum s tances

. V ought A i rcraft Indus. , Inc. v . Fa lv ey Ca rgo U

nderw ri ti ng, Ltd. , 729 F. Sup p . 2d 814, 824- 25 ( N

. D

. Tex. 2010)

. 13 Case: 12-30230 Document: 00512357465 Page: 13 Date Filed: 08/29/2013No. 12-30230

Insurers we r e i nvolved in drafting the umbrella policy language at i s sue, and the failure of that p olicy language to limit coverage in underly i n g “Insured Contracts” to the liabilities assumed by the named insured i n those contracts is part of what ails the Insurers now. C. Each party contends that its interpretation and application of ATOFINA better advances the goals of Texas insurance law and is more aligned with the intent of the parties. Their argum e nts illuminate the magnitude and wide ramifications, both throughout the oil and gas i ndustry and for insurance law, of this c a s e . Where state l aw governs such an issue, t hese policy factors are better gauged by the state high court than by a federal court. IV. Questions Certified For the reasons discussed above, we hereby cer t i fy the following determinative questions of Texas law to the Supreme Court of Texas. 1. Whether Evanston Ins. Co. v. ATOFINA Petr ochems., Inc. , 256 S.W.3d 660 (Tex. 2 008), compels a finding that BP is covered for the damages at issue, because the language of t h e u m b r ella policies alone determines the extent o f B P ’ s c o v e r a g e a s a n additional insured if, and so long as, the additional insured and indemnity provisions of the Drilling Contract a re “separate and independent”? 2. W h e t her the doctrine of contra proferentem applies to th e interpretation o f t h e insurance coverage provision of t h e Drilling Contrac t u n d er the ATOFINA c ase, 256 S.W.3d at 668, given the facts of this case? We disclaim any intention or desire that the S upreme Court of Texas confine its reply to the precise form or scope of the questions certified.

14 Case: 12-30230 Document: 00512357465 Page: 14 Date Filed: 08/29/2013