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Connecticut
Florida
Grasso v. City of Ansonia, No. Civ 302CV455MRK, 2003 WL 22918494 (D. Conn.
Nov. 7, 2003). State courts are powerless to enjoin federal courts from
exercising the jurisdiction that Congress has conferred nor may state courts
divest federal courts of jurisdiction. The court denied the defendant insured
city’s motion to stay a federal question action (brought on the basis of alleged
violations of Constitutional rights), despite insolvency and ongoing liquidation of
the defendant’s insurer in Pennsylvania state court. The Connecticut Insurance
Guaranty Act does not divest federal courts of jurisdiction, and the court
declined to abstain.
Fla. Dep't. Fin. Serv. v. Midwest Merger Mgmt., LLC, No. 4:07cv207‐SPM/WCS,
2008 WL 3259045 (N.D. Fla. Aug. 6, 2008). Federal laws will not be applied to
interfere with state regulation of insurance unless it appears that Congress
intended to affect the business of insurance as a part of its regulation of
interstate commerce. 2008 WL 3259045 at 2 (citing Humana Inc. v. Forsyth, 525
U.S. 299, 307, 119 S. Ct. 710, 142 L. Ed. 2d 753 (1999)). Where the receivership
court does not have exclusive jurisdiction under Florida law and there is no
conflict between the federal removal statute and Florida laws regulating the
business of insurance, reverse preemption under the McCarran‐Ferguson Act is
not warranted. 2008 WL 3259045 at 4. Discussing, but declining to apply the
Younger, Burford, Pullman and Colorado‐River abstention doctrines. 2008 WL
3259045 at 5.
Florida Dep't. of Ins. v. Chase Bank of Texas Nat'l Assoc., 243 F. Supp. 2d 1293
(Fla. N.D. 2002). State court action by liquidator of insolvent insurer where claim
was filed within and as part of ongoing delinquency proceeding, claim did not
arise under federal law, and both parties were citizens of same state. This holds
true even if liquidator's claim under “revised demand notice” was separate and
independent claim. There is no basis for original federal jurisdiction over the
delinquency proceeding itself and although the claim at issue is a “separate and
independent claim” within the meaning of 28 U.S.C. § 1441(c), Congress
amended that section in 1990 to preclude removal of a separate and
independent claim unless it arises under federal law, which this claim does not.
Removal thus was improper. The delinquency proceeding itself is not a civil
action “of which the district courts of the United States have original
jurisdiction.” The proceeding does not arise under federal law, and it is not
between citizens of different states. Nor is there any other basis for federal
jurisdiction. In short, the delinquency proceeding is non‐removable. 243 F. Supp.
2d at 1294‐95.
Illinois General Railway Signal Company v. Corcoran, 748 F. Supp. 639 (N.D. Ill. 1990),
reversed in part by General Railway Signal Company v. Corcoran, 921 F.2d 700
(7th Cir. 1991). American Fidelity Fire Insurance (AFFI) was a surety on two
performance bonds given by Transit Systems Technology, Inc. in favor of a
public transit agency in California and a private bus company in New York. The
United States Small Business Association (SBA) issued Surety Bond Guarantee
Agreements in connection with these performance bonds. AFFI sued General
Railway, alleging that it had breached obligations to perform on the California
and New York contracts, causing AFFI to pay out on its bonds. AFFI was
successful in these claims in the Illinois state court. In the meantime, AFFI
became insolvent, and liquidation proceedings were initiated in New York.
Joseph Corcoran, the Superintendent of Insurance of the State of New York,
was named Liquidator. The SBA notified General Railway that it was making a
claim to the proceeds of the Illinois state judgment. General Railway filed an