Easton, not its insurance company, is on the hook for the city's $5 million settlement with the widow of an officer shot inside police headquarters, a federal appeals court said Tuesday. A three-judge panel of the 3rd U.S. Circuit Court of Appeals sided with Scottsdale Insurance Co., agreeing that the lawsuit over officer Jesse Sollman's accidental shooting in 2005 falls under an ''employee injury exclusion'' in the city's insurance policy.

Mayor Sal Panto Jr. said city officials haven't ruled out appealing the decision to the U.S. Supreme Court, though no plans have been made. Advertisement ''It wasn't a good day for the city,'' he said, but ''we are not prepared to roll over. We're going to be looking at the decision and evaluating it with our legal team.'' In November, city officials agreed to the $5 million settlement the largest in Easton's history to end the wrongful death and civil rights suit brought by Sollman's widow, Carin.

Easton has already paid $3.1 million to Sollman, and the rest is due by the end of the year.