This suit grows from an unsatisfied customer of US Metals. Exxon bought and installed 350 pieces of drilling equipment (well neck flanges) but then later determined that they were the source of some problems, requiring the equipment — which had been installed by being welded in among other heavy equipment — to be removed at substantial cost, both in terms of raw expense and lost production during the time that the wells were not operating.

US Metals held a commercial general liability insurance policy that protected it against claims for "property damage" and "bodily injury."

But US Metals's insurer refused to cover the defense of this claim, citing certain exclusions related to damage caused by deficiencies related to "your [the insured's] product", as well as certain types of damage claims for "impaired property."

The Fifth Circuit has now asked the Texas Supreme Court to address, as a question of Texas law, whether two of the pivotal terms in the contract language defining this exclusion ("physical injury" and "replacement") are ambiguous and, if not, what they mean under Texas insurance law.

In making this request, the Fifth Circuit emphasized its view that this was a question of potentially broad importance:

The Texas Supreme Court’s interpretation of these terms will have far-reaching implications due to the commonality of these exclusions within CGL policies. As such, the answer to our certified questions will affect a large number of litigants. No Texas court or any other state or circuit court has determined whether the terms "physical injury" or "replacement" found within the "your property" and "impaired property" exclusions are ambiguous.

This legal point will now be briefed in the Texas Supreme Court, and the case will most likely be heard at oral argument next spring. You can read more details in the Fifth Circuit's opinion certifying the question.

This is a slip-and-fall case with a twist: The injured person was an employee who was cleaning up the spill:

Kroger's Safety Handbook provided that store management should "make certain that the Spill Magic Spill Response Stations [were] adequately supplied at all times" and available in numerous places throughout the store. Spill Magic allows an employee to clean a liquid spill with a broom and dustpan, and — according to Kroger's Safety Handbook — reduces the likelihood of a slip-and-fall by 25 percent. Because there was no Spill Magic on premises that day, Austin cleaned the spill with a dry mop instead. When Austin moved on to the men's restroom, he saw that the same substance covered about 80 percent of the floor. Austin placed "Wet Floor" signs inside and outside of the room, and proceeded to mop the spill for about thirty to thirty-five minutes. Austin took "baby steps" in and out of the restroom to change out the mop head numerous times, and successfully removed about thirty to forty percent of the liquid.

At about 10:30 a.m., while continuing to remedy the spill, Austin fell. He sustained a left femur fracture and severely dislocated his hip. He spent nine months in the hospital and underwent six surgeries, and his left leg is now two inches shorter than his right.

The employer did not subscribe to the Texas Workers Compensation system, so the claim falls through to common law.

The federal court decided that at least part of the case — a conventional negligence theory based on failure to provide the employee with "a necessary instrumentality" (the Spill Magic) — should be remanded to the federal district court for further proceedings. What it did not know was whether the premises liability theory was also viable — or whether that theory is precluded under Texas law.

So, it has certified the question:

Pursuant to Texas law, including §406.033(a)(1)–(3) of the Texas Labor Code, can an employee recover against a non-subscribing employer for an injury caused by a premises defect of which he was fully aware but that his job duties required him to remedy? Put differently, does the employee’s awareness of the defect eliminate the employer’s duty to maintain a safe workplace?

The Fifth Circuit detailed its analysis of the underlying "tension" within these branches of Texas tort law in its opinion certifying the questions.