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appointment of a receiver even though liquidation and this Court had
constructive possession of the property and the trustee of the escrow account
had actual possession. Plaintiff's rights to securities in escrow account,
obtained by assignment in federal lawsuit, were those of an assignee and the
plaintiff had no priority in state liquidation.
Central States, Southeast and Southwest Areas Health and Welfare Fund v. Old
Security Life Ins. Co., 600 F.2d 671 (7th Cir. 1979). State court in which
receivership proceedings were pending against insolvent insurer could not
enjoin federal district court from hearing an in personam action under the
Employee Retirement Income Security Act (ERISA) against the insolvent
insurer. Such insurer had no right to a single liquidation forum as the state
liquidation law expressly authorizes separate claim proceedings in ancillary
states. Further, federal courts have exclusive jurisdiction over ERISA claims for
breach of fiduciary duty and state liquidation laws cannot be read to preclude a
congressionally created federal claim.
General Railway Signal Company v. Corcoran, 921 F.2d 700 (7th Cir. 1991). In
this interpleader case, the Liquidator of an insolvent insurance company
appealed the denial of a motion to vacate a temporary restraining order of
funds from state judgment proceedings, arguing that no diversity existed
between the two claimants in the case, because the Small Business
Administration ("SBA"), as an agency of the United States, was a citizen of
no state and therefore could not be sued in diversity. Agreeing with the
Liquidator, the appellate court reversed the lower court, and held that a suit
which names an administrator as a defendant is the equivalent of a suit
naming the United States as a party. However, the court still maintained
federal question jurisdiction over the case, because 15 U.S.C. § 634(b)
created federal question jurisdiction over contract claims against the SBA.
Finally, the court stated that it may be appropriate for the district court to
abstain exercising jurisdiction over the case pursuant to the Burford
abstention doctrine.
General Railway Signal Company v. Engeleiter, 969 F.2d 519 (7th Cir. 1992). In
this case involving a statutory interpleader action regarding a state court
judgment, the Seventh Circuit held that the district court had misinterpreted
the Seventh Circuit's prior opinion when the district court subsequently
abstained from exercising jurisdiction over the case pursuant to the Burford
abstention doctrine. The appellate court stated that the issue of abstention
was open for consideration by the district court, and suggested that the
district court allow briefing from both parties on the issue.
General Railway Signal Company v. Engeleiter, 969 F.2d 519 (7th Cir. 1992). This
was an interpleader action involving funds awarded in a judgment against
plaintiff and in favor of an insurance company. The insurance company had
since become the subject of liquidation proceedings under a comprehensive
New York regulatory scheme. In this opinion, the Court stated that its
extensive discussion of Burford abstention in its prior opinion, General Railway
Signal Co. v. Corcoran, 921 F.2d 700 (7th Cir. 1991), was not intended to
preclude the district court from considering the propriety of abstention on
remand. In the prior opinion, the Court set forth the factors to be considered
by the district court in determining whether abstention is appropriate: 1)
whether the suit is based on an exclusively federal cause of action, 2) whether
difficult state laws are at issue, 3) the need for coherent state doctrine, and 4)
whether the state intended to have the issues adjudicated in specialized state
forums. The Court further held that the fact that this was an interpleader