Watson v. Employers Liability Assurance Corporation

A Massachusetts-issued insurance policy covering an Illinois manufacturer contained a clause barring direct suits against the insurer, Assurance (defendant), until the underlying tort claim against the manufacturer was resolved; Louisiana residents the Watsons (plaintiffs), injured by the manufacturer's defective product, sued Assurance directly in Louisiana under that state's direct-action statute. The district court dismissed, finding Massachusetts or Illinois law should govern and that applying Louisiana's statute would violate due process and full faith and credit; the court of appeals affirmed, and the Supreme Court granted certiorari.