Petition for Writ of Certiorari — Unified Life Insurance Company, Petitioner v. United States Fire Insurance Company

No. ___________

.

__________________

UNIFIED LIFE INSURANCE COMPANY,

Petitioner,

v.

UNITED STATES FIRE INSURANCE COMPANY,

Respondent.

___________________________________________

ON PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

___________________________________________

PETITION FOR WRIT OF CERTIORARI

___________________________________________

Cortney C. Thomas

cort@brownfoxlaw.com

Counsel of Record

Andrew C. Debter

BROWN FOX PLLC

8111 Preston Rd, Ste 300

Dallas, TX 75225

(214) 327-5000

Counsel for Petitioner

December, MMXXV

United States Commercial Printing Company • www.uscpc.us • (202) 866-8558

i

QUESTION PRESENTED

Whether a federal court exercising diversity jurisdiction exceeds its authority under Erie R. Co. v. Tompkins, 304 U.S. 64 (1938) by creating a new state

law duty for insurers to provide “objectively reasonable” notice of potential claims to reinsurers when

the State’s courts and legislature have not previously

recognized such a duty?

ii

PARTIES TO THE PROCEEDINGS

Petitioner, and defendant-counterplaintiff-appellee below is Unified Life Insurance Company, a

Kansas-based insurance company and the reinsured

in this dispute.

Respondent, and plaintiff-counterdefendant-appellant below is United States Fire Insurance Company,

a New Jersey-based insurance company and the

reinsurer in this dispute.

iii

RULE 29.6 STATEMENT

Pursuant to Supreme Court Rule 29.6, Petitioner

Unified Life Insurance Co. states that it has no

parent corporation and that no publicly held

company owns 10% or more of Petitioner’s stock.

iv

RELATED PROCEEDINGS

United States District Court (N.D. Tex.):

United States Fire Insurance Company v.

Unified Life Insurance Company, No.

3:22-cv-00868-BT (Mar. 29, 2024)

(summary judgment for Unified Life

Insurance Company)

United States Court of Appeals (CA5):

United States Fire Insurance Company

v. Unified Life Insurance Company,

No. 24-10392 (Aug. 14, 2025)

(summary judgment reversed)

United States Fire Insurance Company

v. Unified Life Insurance Company,

No. 24-10392 (Sep. 9, 2025) (rehearing

denied

v

TABLE OF CONTENTS

Question Presented ..................................................... i

Parties to the Proceedings ......................................... ii

Rule 29.6 Statement .................................................. iii

Related Proceedings ...................................................iv

Table of Authorities................................................. viii

Petition for Writ of Certiorari .....................................1

Opinions Below ............................................................3

Jurisdiction ..................................................................3

Statement of the Case .................................................3

Reasons for Granting the Petition .............................. 5

I. The decision below implicates a circuit conflict

on an important question of whether federal

courts have authority to create new state law..5

II. The decision below contravenes both Erie and

Texas law by creating a novel state law duty

out of whole cloth. ..............................................9

III. The question presented is of national

importance because it concerns fundamental

federalism limits on the power of federal courts

applying state law. ........................................... 12

Conclusion ................................................................. 14

vi

Appendix

Appendix A

Opinion [precedential], United States

Court of Appeals for the Fifth Circuit,

United States Fire Insurance Company

v. Unified Life Insurance Company,

No. 24-10392 (Aug. 14, 2025) .................... App-1

Appendix B

Order [rehearing en banc denied],

United States Court of Appeals for the

Fifth Circuit, United States Fire

Insurance Company v. Unified Life

Insurance Company,

No. 24-10392 (Sep. 9, 2025) ..................... App-32

Appendix C

Memorandum Opinion and Order,

United States District Court for the

Northern District of Texas, United

States Fire Insurance Company v.

Unified Life Insurance Company,

No. 3:22-cv-00868-BT (Mar. 29, 2024) .... App-34

vii

Appendix D

Final Judgment, United States District

Court for the Northern District of Texas,

United States Fire Insurance Company

v. Unified Life Insurance Company,

No. 3:22-cv-00868-BT, (Mar. 29, 2024) ... App-66

Appendix E

Amended Final Judgment, United

States District Court for the Northern

District of Texas, United States Fire

Insurance Company v. Unified Life

Insurance Company,

No. 3:22-cv-00868-BT (Apr. 26, 2024) ..... App-68

viii

TABLE OF AUTHORITIES

Cases

A & E Supply Co. v. Nationwide Mut. Fire Ins. Co.,

798 F.2d 669 (CA4 1986),

cert. denied, 479 U.S. 1091 (1987) ...........................6

Afram Export Corp. v. Metallurgiki Halyps, S.A.,

772 F.2d 1358 (CA7 1985) .......................................6

American Mfrs. Mut. Ins. Co. v. Schaefer,

124 S.W.3d 154 (Tex. 2003) ................................... 11

Barfield v. Madison Cnty., Miss.,

212 F.3d 269 (CA5 2000) .........................................8

Barrow-Shaver Res. Co. v. Carrizo Oil & Gas, Inc.,

590 S.W.3d 471 (Tex. 2019) ..................................... 9

Carhartt, Inc. v. Innovative Textiles, Inc.,

998 F.3d 739 (CA6 2021) .........................................7

City of Philadelphia v. Lead Indus. Ass’n,

994 F.2d 112 (CA3 1993) .........................................6

Day & Zimmermann, Inc. v. Challoner,

423 U.S. 3 (1975)................................................ 5, 10

Dayton v. Peck, Stow & Wilcox Co.,

739 F.2d 690 (CA1 1984) .........................................6

Erie R. Co. v. Tompkins,

304 U.S. 64 (1938).................................. 1–2, 5, 8–12

ix

Galindo v. Precision Am. Corp.,

754 F.2d 1212 (CA5 1985) .......................................8

Gamma Group, Inc. v. Transatlantic Reinsurance Co.,

242 S.W.3d 203 (Tex. App.—Dallas 2007, pet.

denied) .................................................................... 10

Hazen v. Pasley,

768 F.2d 226 (CA8 1985) .........................................7

Ins. Co. of State of Pa. v. Assoc. Int’l Ins. Co.,

922 F.2d 516 (CA9 1990) ....................................... 11

Jackson v. Johns-Manville Sales Corp.,

781 F.2d 394 (CA5 1986) ..................................... 2, 8

Johnson v. Honeywell Info. Sys., Inc.,

955 F.2d 409 (CA6 1992) .........................................7

Keiland Constr., L.L.C. v. Weeks Marine, Inc.,

109 F.4th 406 (CA5 2024)........................................ 8

Klaxon Co. v. Stentor Elec. Mfg. Co.,

313 U.S. 487 (1941)................................................ 12

Meredith v. City of Winter Haven,

320 U.S. 228 (1943)................................................ 12

Paul v. Watchtower Bible & Tract Soc’y of N.Y.,

819 F.2d 875 (CA9 1987),

cert. denied, 484 U.S. 926 (1987) ............................. 7

Stonewall Ins. Co. v. Modern Expl., Inc.,

757 S.W.2d 432 (Tex. App.—Dallas 1988,

no writ) .....................................................................8

x

Tidler v. Eli Lilly & Co.,

851 F.2d 418 (CADC 1988) ......................................7

Torres v. Goodyear Tire & Rubber Co.,

867 F.2d 1234 (CA9 1989) .......................................7

United Founders Life Ins. Co. v. Carey,

363 S.W.2d 236 (Tex. 1962) ..................................... 9

United States v. Standard Oil Co.,

332 U.S. 301 (1947).......................................... 10, 12

URI, Inc. v. Kleberg Cnty.,

543 S.W.3d 755 (Tex. 2018) ..................................... 9

Zenith Ins. Co. v. Employers Ins. of Wausau,

141 F.3d 300 (CA7 1998) ....................................... 11

Statutes

28 U.S.C. § 1254 .......................................................... 3

PETITION FOR WRIT OF CERTIORARI

This case concerns whether federal courts sitting

in diversity may transgress the structural limits Erie

R. Co. v. Tompkins, 304 U.S. 64 (1938) imposed

ninety years ago and assume for themselves the

power to make state law. The Fifth Circuit did so

here. Confronted with a reinsurance treaty that

expressly vested notice discretion “in the opinion of

the Company,” the court declined to apply that

contract as written. Instead, it created a new Texas

law duty of its own design requiring objectively

reasonable notice that was unknown to Texas courts

and unrecognized by the Texas Legislature.

This is not merely a dispute about reinsurance

but about the constitutional boundaries that

separate state and federal judicial authority and a

deepening circuit split over those boundaries.

Several circuits faithfully adhere to Erie’s limits,

holding that federal courts cannot innovate or

expand state law. Others permit federal judges to

adopt novel state-law duties or theories when they

deem them sensible or consistent with perceived

trends. The decision below aligns the Fifth Circuit

with the latter, more aggressive view, exacerbating

an entrenched conflict on a question fundamental to

our federal system.

Under Erie, Congress cannot empower federal

courts to create substantive state law, and federal

courts cannot seize that power for themselves. When

a federal court discards an unambiguous contract

provision grounded in state law and replaces it with

a federally crafted rule, it is not merely predicting

2

state law but, instead, creating it out of whole cloth.

That step breaches the constitutional limits of

federalism and threatens the States’ sovereign

prerogative to define their own commercial law

doctrines.

The Fifth Circuit’s approach marks a profound

shift. For decades, that court adhered to the principle

that the power “to make the Erie-guess . . . does not

enable [federal courts] to alter existing law or to

change direction.” Jackson v. Johns-Manville Sales

Corp., 781 F.2d 394, 397 (CA5 1986). But the

decision below abandons that modest posture and

adopts the opposite one, asserting authority to

expand state law in a direction Texas has never

chosen. That federal judicial activism is incompatible

with Erie, destabilizes commercial expectations, and

places the Fifth Circuit squarely among those courts

that treat diversity jurisdiction as a license to

reshape state law.

This Court has not hesitated to rein in judicial

overreach when a lower court’s exercise of power

threatens structural limits.

The constitutional line

that Erie drew between state lawmaking and federal

adjudication protects state sovereignty, stabilizes

commercial expectations, and prevents federal courts

from becoming freewheeling common law tribunals.

That line has been crossed here.

The Court should

grant the petition and restore the balance that Erie

requires.

3

OPINIONS BELOW

The Fifth Circuit’s opinion is published and may

be found at 147 F.4th 583 (CA5 2025), and is reproduced in the Appendix at App.1-31. The Northern District of Texas’s memorandum opinion and order granting summary judgment to Unified is reproduced in

the Appendix at App.34-70.

JURISDICTION

The Fifth Circuit entered judgment on August

14, 2025. Rehearing en banc was denied on

September 9, 2025. This Court has jurisdiction under

28 U.S.C. § 1254(1).

STATEMENT OF THE CASE

Unified Life Insurance Company (Unified) and

United States Fire Insurance Company (U.S. Fire)

are sophisticated insurers that entered into a quotashare reinsurance treaty under which U.S. Fire

agreed to indemnify Unified for a portion of its

health-insurance losses. In return, Unified promised

to give notice of any claim that, in its own opinion,

might require reinsurance.

For several years, Unified handled litigation in

Montana that it believed would not trigger

reinsurance. Only after a surprise class-certification

and summary judgment ruling (that overruled the

magistrate judge’s contrary recommendation) and

the

Ninth

Circuit’s

subsequent

denial

of

interlocutory review did Unified conclude that

reinsurance might be implicated and promptly gave

4

notice. U.S. Fire denied coverage on the ground that

notice was purportedly late.

U.S. Fire then filed this action in the Northern

District of Texas, invoking diversity jurisdiction and

seeking a declaratory judgment that it owed no reinsurance coverage to Unified. Unified counterclaimed

for its own declaratory relief, along with damages for

breach of the reinsurance agreement.

The district court enforced the contract as written,

holding that the notice clause expressly invoked

Unified’s subjective opinion and that notice was

timely once Unified actually believed reinsurance

might be required.

The Fifth Circuit reversed,

holding that the clause must be read through the

eyes of a reasonable insurer, replacing the parties’

agreed trigger with an objective standard.

Unified sought rehearing en banc,

emphasizing

that the decision conflicts with settled Texas contract

law and with other circuits construing identical

language. The Fifth Circuit denied rehearing.

5

REASONS FOR GRANTING THE PETITION

I.

The decision below implicates a circuit

conflict on an important question of

whether federal courts have authority to

create new state law.

Federal courts sitting in diversity must apply state substantive law as it exists, not prescribe what they think the law should be. Erie, 304 U.S. at 78. In

the absence of controlling state authority, a federal

court may some-times make an “Erie guess” to apply

settled principles to new facts. That form of interstitial decision-making—predicting, not creating—is consistent with Erie’s limits. But as this Court has stated: “A federal court in a diversity case is not free to

engraft onto those state rules exceptions or modifications which may commend themselves to the federal

court, but which have not commended themselves to

the State in which the federal court sits.” Day &

Zimmermann, Inc. v. Challoner, 423 U.S. 3, 4 (1975).

This case does not involve the routine application

of existing law. Rather, the Fifth Circuit announced

a new duty under Texas law, displacing a contract’s

express assignment of judgment to the reinsured

that notice is due only when, “in the opinion of the

Company,” coverage may be triggered, as well as

replacing that standard with a mandatory “objective

reasonableness” rule of the federal court’s own

invention. That holding expands, modifies, and even

contradicts settled Texas contract law. See infra, § II.

And in doing so, the decision below implicates a deep

and acknowledged conflict among the courts of

6

appeals over whether federal courts exercising

diversity jurisdiction have the authority to make new

state law.

At least five circuits have held that a federal court may not arrogate to itself state-lawmaking power.

For example, the First Circuit instructs that federal

courts are to apply state law as it is, not as it “might

come to be.” Dayton v. Peck, Stow & Wilcox Co., 739

F.2d 690, 694 (CA1 1984). The Third Circuit emphasizes that “federalism concerns require” leaving any

expansion of state law to state tribunals. See City of

Philadelphia v. Lead Indus. Ass’n, 994 F.2d 112, 123

(CA3 1993) (“Our role is to apply the current law of

the appropriate jurisdiction, and leave it

undisturbed.” (emphasis added)). The Fourth, Seventh, and D.C. Circuits are in agreement. See, e.g., A &

E Supply Co. v. Nationwide Mut. Fire Ins. Co., 798

F.2d 669, 678 (CA4 1986), cert. denied, 479 U.S. 1091

(1987);1 Afram Export Corp. v. Metallurgiki Halyps,

S.A., 772 F.2d 1358, 1370 (CA7 1985);2 Tidler v. Eli

1 “Virginia,

through its courts and legislature, is the one to

restructure its insurance industry, not the federal courts

through implication of private rights of action under statute

and creation of venturesome torts at common law.” A & E

Supply Co., Inc., 798 F.2d at 678. “We cannot conclude that a

particular instance of conduct on the part of a particular

insurer authorizes us to undertake wholesale changes in

Virginia insurance law.” Id.

2 “Federal judges are disinclined to make bold departures in

areas of law that we have no responsibility for developing.”

Afram Exp. Corp., 772 F.2d at 1370. “[W]hen a resident . . .

invoke[s] diversity jurisdiction, and perhaps in any case, he

cannot expect to receive a very sympathetic hearing for his

argument that the federal court should adopt an innovative

interpretation of state law.” Id.; see also Insolia v. Philip Morris

7

Lilly & Co., 851 F.2d 418, 425 (CADC 1988) (“It is

decidedly not the business of the federal courts to

alter or augment state law to meet the felt

necessities of the case; to suggest otherwise is to

ignore fundamental principles of comity inherent in

our federal system of government.”).

By contrast, other circuits—including the Ninth,

Eighth, and Sixth—have embraced a broader lawmaking role that permits federal courts to adopt new

theories or reshape state law when they deem

appropriate.

The Ninth Circuit has expressly

recognized its willingness to “extend” trends in state

law and innovate beyond existing precedent, even

acknowledging that its posture is at odds with other

courts that refuse to “adopt untested legal theories”

in diversity cases. Torres v. Goodyear Tire & Rubber

Co., 867 F.2d 1234, 1238 n.1 (CA9 1989); Paul v.

Watchtower Bible & Tract Soc’y of N.Y., 819 F.2d 875,

879 (CA9 1987), cert. denied, 484 U.S. 926 (1987).

The Eighth Circuit likewise has held that a federal

court may recognize a novel state law implied cause

of action based solely on perceived public policy, even

where no state court has embraced such a rule. See

Hazen v. Pasley, 768 F.2d 226, 228–29 (CA8 1985).

And the Sixth Circuit has endorsed new defenses

under state law without any supporting signal from

the state’s highest court, relying instead on “common

sense” and the “dearth” of contrary authority.

Johnson v. Honeywell Info. Sys., Inc., 955 F.2d 409,

413 (CA6 1992); but see Carhartt, Inc. v. Innovative

Textiles, Inc., 998 F.3d 739, 745 (CA6 2021) (“As a

Inc., 216 F.3d 596, 607 (CA7 2000) (“Innovative state law claims

should be brought in state court.”).

8

federal court sitting in diversity, we must take care

before extending state law beyond its borders.”).

That same strain of innovative state lawmaking

by the federal judiciary now appears in the decision

below.

The Fifth Circuit asserted authority to

reshape Texas law despite acknowledging that the

only two Texas decisions it cited “seem more like

straws in the wind than authority to which this Eriebound court is required to defer.” App.16.3

And for good reason: those decisions are inapposite.4 Neither decision suggests that Texas would

3 The

decision below also appears inconsistent with the Fifth

Circuit’s prior recognition of the limits Erie imposes on federal

courts applying state law. The Fifth Circuit has previously

cautioned that while it must sometimes predict state law, the

power “to make the Erie-guess . . . does not enable us to alter

existing law or to change direction.” Jackson, 781 F.2d at 397;

see also Galindo v. Precision Am. Corp., 754 F.2d 1212, 1217

(CA5 1985) (“[I]t is not for [federal courts] to adopt innovative

theories of recovery or defense for Texas law, but simply to

apply that law as it currently exists.”); Keiland Constr., L.L.C.

v. Weeks Marine, Inc., 109 F.4th 406, 418 (CA5 2024) (“We may

not ‘expand state law beyond its presently existing

boundaries.’” (quoting Barfield v. Madison Cnty., Miss., 212

F.3d 269, 272 (CA5 2000))). That tension only further

underscores the entrenched circuit split over the proper limits

of federal courts applying state law.

4 Stonewall analyzed only whether an insured acted with

reasonable promptness after it had already formed the requisite

opinion; it did not analyze the reasonability of when that

opinion arose. See Stonewall Ins. Co. v. Modern Expl., Inc., 757

S.W.2d 432, 434–35 (Tex. App.—Dallas 1988, no writ). It

therefore does nothing to support the objective standard for the

inception of notice that the Fifth Circuit created below. And

Carey concerned a fundamentally different context—i.e.,

whether an insurer acted in good faith in determining

insurability under a temporary life policy, a setting in which

9

override sophisticated parties’ explicit choice to condition notice exclusively on the cedent’s own opinion.

The Fifth Circuit’s reliance on these slender authorities only underscores that it did not apply Texas

law but, rather, created new substantive state law.

The result is a sharp division among the courts of

appeals on an issue central to our federal system: the

limits Erie imposes on federal courts sitting in diversity.

This petition presents an excellent vehicle to

resolve that question and restore the rule that state

law is made by state courts and legislatures—not

federal courts applying their own policy preferences.

II.

The decision below contravenes both Erie

and Texas law by creating a novel state

law duty out of whole cloth.

If anything is clear under Texas law, it is that

contracts—especially those negotiated by sophisticated commercial entities—must be enforced as written. See Barrow-Shaver Res. Co. v. Carrizo Oil &

Gas, Inc., 590 S.W.3d 471, 479–80 (Tex. 2019). Texas

courts do not rewrite contractual terms to impose

obligations the parties bypassed. See URI, Inc. v.

Kleberg Cnty., 543 S.W.3d 755, 771 n.81 (Tex. 2018);

Tenneco Inc. v. Enter. Prods. Co., 925 S.W.2d 640,

646 (Tex. 1996).

Nor do they override contractual

allocations of judgment with external reasonableness

the opinion could defeat coverage. See United Founders Life

Ins. Co. v. Carey, 363 S.W.2d 236, 238–39 (Tex. 1962). Even

then, Carey required only an inquiry into honest belief; it did

not convert “in the opinion of” into a negligence-based

reasonableness standard. Id. at 243.

10

requirements of their own making.

See Gamma

Group, Inc. v. Transatlantic Reinsurance Co., 242

S.W.3d 203, 212 (Tex. App.—Dallas 2007, pet. denied)

(“A court may not add to a contract under the guise

of interpretation.”).

Yet the Fifth Circuit did both. It refused to give

effect to the Treaty’s requirement that notice is

triggered only when, “in the opinion of the

Company,” a claim may result. That language vests

discretion in Unified, a deliberate choice that assigns

judgment to the party with the information and

financial exposure at stake. Texas courts respect

those decisions. The Fifth Circuit did not. Instead, it

invented a new state law rule that erases subjective

triggers and mandates objective ones, even when the

contract says otherwise.

That result is incompatible with Erie’s

foundational principle that federal courts do not

formulate state law. See Challoner, 423 U.S. at 4. As

this Court made clear in Erie, federal courts

exercising diversity jurisdiction are not “free to

exercise an independent judgment as to what the

common law of the state is—or should be.” 304 U.S.

at 71. The duty of federal courts is instead “more

modest than that of state courts,” particularly

regarding any “freedom to create new common-law

liabilities.” United States v. Standard Oil Co., 332

U.S. 301, 313 (1947). The decision below contravenes

those limits by announcing a new reinsurance duty

under Texas law that Texas itself has never adopted.

And it is especially inappropriate here, where

Texas has stated time and again that courts “may

neither rewrite the parties’ contract nor add to its

language” for policy reasons. American Mfrs. Mut.

11

Ins. Co. v. Schaefer, 124 S.W.3d 154, 162 (Tex. 2003).

The Fifth Circuit’s professed interest in nationwide

uniformity cannot justify distortion of state law. For

one thing, the decision below actually undermines

uniformity because it ignores or distorts the contrary

holdings of other jurisdictions.5 More fundamentally,

“uniformity” achieved through federal judicial

policymaking is precisely what Erie forbids.

This Court’s review is warranted to restore the

role of state lawmaking bodies in shaping state

contract doctrine, preserve the predictability of

commercial agreements, and ensure that contracts

governed by Texas law mean the same thing in

Texas as they do everywhere else.

5 See Zenith Ins. Co. v. Employers Ins. of Wausau, 141 F.3d

300, 306–07 (CA7 1998) (concluding that a substantially similar

provision required notice “within a reasonable period of time of

[the reinsured’s] realization that the claim could implicate the

reinsurance policy” and stating that notice would be timely if

the reinsured “genuinely believed” the claim did not implicate

reinsurance (emphasis added)); see also Ins. Co. of State of Pa.

v. Assoc. Int’l Ins. Co., 922 F.2d 516, 521–22 (CA9 1990)

(agreeing “with [the reinsured’s] interpretation” of a similar

notice provision requiring the reinsured to notify “promptly of

any occurrence which in [its] estimate” that such language

denoted a “subjective determination”).

12

III.

The question presented is of national

importance because it concerns

fundamental federalism limits on the

power of federal courts applying state

law.

Federal courts sitting in diversity occupy a

constitutionally constrained role. See Klaxon Co. v.

Stentor Elec. Mfg. Co., 313 U.S. 487, 497 (1941)

(stating that “the proper function of [the federal

court sitting in diversity jurisdiction] is to ascertain

what the state law is, not what it ought to be.”). This

Court has emphasized that the federal judiciary’s

authority in diversity cases is “more modest than

that of state courts,” particularly in any “freedom to

create new common-law liabilities.”

Standard Oil,

332 U.S. at 313. Preserving those limits is essential

to our federal system, where States, not federal

courts, define and develop their own contract law.

At the same time, federal courts must resolve

diversity cases even when state law is unsettled. See

Meredith v. City of Winter Haven, 320 U.S. 228, 237–

38 (1943). But Erie drew a sharp line: applying uncertain state law is permissible; expanding state law is

not. The tension between those two obligations raises

recurring federalism concerns when a federal court

substitutes its own policy preferences for the choices

of the State’s courts and legislature. Enforcing that

boundary is a fundamental constitutional imperative.

This case exemplifies the problem. The Fifth

Circuit adopted a new state law duty that Texas

courts have never recognized, transforming a clause

that vests judgment “in the opinion of the Company”

into a mandatory objective reasonableness test

13

fashioned by the federal court itself. Federal judicial

revision of state reinsurance doctrine based on

fundamental contract principles intrudes into an

area of law at the core of state sovereignty and

undermines the principle that States retain primary

authority over their own commercial rules.

The practical consequences underscore the

federalism concerns.

Reinsurance agreements, like

countless other commercial contracts,

rely on

predictable enforcement of state law as written. By

stripping the parties’ language of its negotiated

meaning, the decision below upsets established

expectations by nullifying express discretion clauses

that appear in thousands of treaties. Its effects are

immediate and widespread:

reinsurers can now

invoke hindsight to deny coverage, while insurers

must over-report to protect themselves, undermining

efficiency and trust in an essential financial system.

This Court’s intervention is necessary to reaffirm

that federal courts may not reshape state law under

the guise of applying it and to preserve the proper

balance between federal and state judicial authority.

14

CONCLUSION

This Court should grant certiorari.

Respectfully submitted,

Cortney C. Thomas

Counsel of Record

Andrew C. Debter

BROWN FOX PLLC

8111 Preston Rd, Ste 300

Dallas, TX 75225

cort@brownfoxlaw.com

andrew@brownfoxlaw.com

(214) 327-5000

December, 2025

Counsel for Petitioner