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the embezzler’s fraud. The banks sought a declaratory judgment in federal
court saying that they were not liable to the receivers. The district court
enjoined the receivers from pursuing their state coercive action further and the
receivers appealed. The Sixth Circuit declined to find McCarran‐Ferguson
reverse preemption because an action to evade liability in a threatened
common‐law coercive action by the insurance companies had only an
attenuated connection to the regulation of insurance. However, the court
noted that (1) the declaratory judgments would serve no useful purpose and (2)
that the banks filed the declaratory actions not to resolve liability issues but
instead to gain procedural advantage. Because of these two factors, the
appellate court held that jurisdiction over these declaratory actions should not
have been exercised and the district court’s decision to the contrary was an
abuse of discretion.
Arlans Agency, Inc. v. Dykema Gossett, 1995 U.S. App. LEXIS 1175 (6th Cir. 1995)
(unpublished opinion). The agency owned the insurance company, which was
in liquidation proceedings in the receivership court. The receivership court
issued an order enjoining all persons from bringing any action, including any
counterclaim, against the insurance company without prior authorization. Then,
the receiver filed a claim against the agency in a county court. The receivership
court found that the agency’s counterclaims in county court infringed on the
exclusive jurisdiction of the receivership court. The county court dismissed the
counterclaims. The agency then filed a § 1983 claim in federal district court
contending that it was denied a state forum for their constitutional claims. The
district court dismissed the claim. On appeal, the court affirmed, holding that
Congress did not intend § 1983 to enable creditors to circumvent state statutory
schemes for liquidating insolvent insurance companies, and because a state
forum was available to the agency for torts committed outside the receivership
process, its due process rights had not been violated.
Alabama M. Diane Koken, as Ins. Commissioner of the Commonwealth of Pennsylvania v.
Preferred Underwriting Alliance, No. 2:04CV03282 JEO, 2007 WL 521254 (N.D.
Ala. Feb. 7, 2007). The Rehabilitation Order directed the return of all assets
directly to the Rehabilitator at the insurance company offices within 30 days.
The Liquidation Order directs the Liquidator to take possession of all assets that
are the property of [the insurance company] including collected and
uncollected premiums. Defendant ordered to immediately disburse the
undisputed amount of collected premiums to the plaintiff. 2007 WL 521254 at 2
(quotation marks omitted).
Ex parte Gregory V. Serio v. Cay‐Chel, Inc., and Frontier Ins. Co., 893 So.2d 1148
(Ala. 2004).Uniform Insurers Liquidation Act ("UILA"); Effect of reciprocal
state's rehabilitation Orders‐‐Rehabilitation order that had been issued in
reciprocal state under the UILA and that enjoined any person from commencing
or prosecuting any action against insurance company entitled company to stay
of action to recover on payment and performance bonds. 893 So. 2d at 1151.
Ex parte Noble Trucking Co., 675 So. 2d 356 (Ala. 1996). Plaintiff brought
action in Alabama against alleged tortfeasor arising from a motor vehicle
collision. During the litigation, the tortfeasor’s insurer was placed into
rehabilitation in Indiana. The rehabilitation order enjoined all persons from,
inter alia, presenting actions against insureds of the insurer in rehabilitation.
Alabama and Indiana were reciprocal states under the Uniform Insurers
Liquidation Act. On a petition for a writ of mandamus after the trial court
refused to defer the trial date for more than ninety days, the Alabama
Supreme Court refused the writ. The Court held that the Indiana injunction