Respondents Brief — Quackenbush v. Allstate Ins. Co.

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QUESTIONS PRESENTED

1. Whether an order remanding a case to state court based

on Burford abstention is reviewable by appeal and not merely

by mandamus.

2. Whether an action at law against a private party seeking

money damages can present the exceptional circumstances

necessary for a federal court to decline to exercise its juris-

diction based on the Burford doctrine.

LIST OF PARTIES AND RULE 29.6 STATEMENT

The names of all parties in this Court and in the United

States Court of Appeals for the Ninth Circuit are contained in

the caption.

Respondent is a wholly-owned subsidiary of The Allstate

Corporation, a publicly traded corporation. Respondent's non-

wholly owned subsidiaries are After Six Holding Corporation,

Allstate Automobile & Fire Insurance Company Limited,

Gainey Ranch Financial Class A L.P., Saison Life Insurance

Company, Ltd., Samshin Allstate Life Insurance Company,

Ltd., Saugatuck II Cellular Investment Corp., and Tramed.

TABLE OF CONTENTS

PAGE

QUESTIONS PRESENTED................... i i

LIST OF PARTIES AND RULE 29.6 STATEMENT T

TABLE OF CONTENTS........... int

TABLE OF AUTHORITIES ....... vi

OPINIONS BELOW ....... abeben

STATUTES INVOLVED ........... 2

STATEMENT OF THECASE......... 2

A. Statutory Procedures for Insurance

RIOUINOTIB. oo cccccccccece: | 3

1. The Collection and Management

Th eek cudcdcncess<ee : 4

2. The Claim-Processing Function 5

B. The Mission Liquidation. 5

C. The Suit Against Allstate 7

SUMMARY OF ARGUMENT .... 10

SE | ees 13

1. THE DISTRICT COURT'S ORDER

REMANDING THE CASE TO STATE COURT

WAS REVIEWABLE ON APPEAL......... 13

Il.

A. The District Court's Remand Order Was

Appealable as a Final Decision Under 28

iin O) BEE sdéccsccecanssssenssesibawoenests

B. Even If the District Court's Remand Order

Were Not Final in the Usual Sense, It Would

Be Appealable as a Final Collateral Order ..

THE EXTRAORDINARY CIRCUMSTANCES

JUSTIFYING BURFORD ABSTENTION

CANNOT ARISE IN AN ACTION AT LAW ON

> A QPS ce cecdcecenenssdéecacctadnessescnss:

A. The Burford Doctrine Applies Only to

Actions Seeking to Review State Administra-

tive Proceedings Where Such Review Would

Interfere with State Policymaking Processes

On Matters of Distinctively Local Concern .

1. The District Court Had No Discretion

to Abstain Because Allstate Sought No

IED Bie ccktccecniscctacssecess

2. The District Court Had No Discretion

to Abstain Because Allstate Did Not

Seek to Interfere with State Policy-

GREED cvccceseccoccsvnscccecccesenseoves

B. Neither of the Interests the Liquidator

Asserts Here May Defeat Allstate's Right to

Invoke the District Court's Diversity

PUTIN cccccecocenescncsdccesceecscnscces

PAGE

|. The Liquidator’s Preference for

Consolidated Litigation Cannot Defeat

Allstate's Right to Invoke Diversity

PEED scndencdencucclbccbcdedscsers 40

2. The Presence of State-Law Issues Cannot

Defeat Allstate's Right to Invoke Diversity

LE I ee a 45

The District Court Had No Discretion to

Abstain in the Face of Allstate's Motion to

Compe! Arbitration Under the Federal

FE Se AE I I EE A 48

SI 06d cedcadcbenvens abducnodesdbidedasnenads 50

0 EEA cee a ae cont era SAE PS la

TABLE OF AUTHORITIES

Cases PAGE

Ainsworth y. Allstate Insurance Co., 634 F. Supp.

ee Gee Be Sana cncsedanesussssecisodaseenes 48

Alabama Public Service Commission v. Southern

Railway Co., 341 U.S. 341 (1951)................ 27, 29

Allied-Bruce Terminix Cos. v. Dobson, 115 S. Ct.

SED dcddveddecsabicidtcurtnetdeniatiddeds 13, 49, 50

Anderson v. Great Republic Life Insurance Co., 41

Cal. App. 2d 181, 106 P.2d 75 (1940) ............ 37

Angoff v. Holland-American Ins. Co. Trust, No. CV87-

4356 (Mo. Cir. Ct., Jackson Co., May 11, 1995) .. 3

Ankenbrandt v. Richards, 504 U.S. 689 (1992)........ 33, 35

Bank of Bethel v. Pahquioque Bank, 14 Wall. (81

es Be cucctndcpetsocnnsneuesetactodanacs 42,44

Ex parte Bradstreet, 7 Pet. (32 U.S.) 634 (1833)...... 18, 19

Burford v. Sun Oil Co., 319 U.S. 315 (1943) .9, 10, 25, 26, 27

Carnegie-Mellon University v. Cohill, 484 U.S. 343

SE kx. tadducndpabemiasoneantenedssedincenendanin 15,17

Catlin v. United States, 324 U.S. 229 (1945).......... 15

Clay v. Sun Insurance Office, 363 U.S. 207 (1960) ... 32

Cohen v. Beneficial Industrial Loan Corp., 337 U.S.

I ee eee 11, 14, 21

Cohens v. Virginia, 6 Wheat. (19 U.S.) 264(1821).... 25

Coit Independence Joint Venture v. FSLIC, 489 U.S.

Sle EE Wdcndarkedstdudadsantubenicnatmneuntal 12, 42, 44

vil

PAGE

Colonial American Life Insurance Co. v.

Commissioner of Internal Revenue, 491 U.S. 244

Settee sadsidedecndhasnaibiedwbdudessesccetseosencss< 6

Colorado River Water Conservation District v.

United States, 424 U.S. 800

Sn dsteingidtiniddiniaienn eiiantiaienes ted 16, 25, 28, 29, 34, 47

Commonwealth Trust Co. v. Bradford, 297 U.S. 613

Et aciteieithartinkalesiideaidiacniauaaieiteaaakmesnanamasenindes ia 44, 45

Coopers & Lybrand v. Livesay, 437 U.S. 468 (1978).. 21

Corcoran v. Ardra Insurance Co., 842 F.2d 31 (2d Cir.

Se nescdntececedntdusbdddadescbudeetstunsuasaeess 20, 23

Corcoran v. National Union Fire Insurance Co., 143

A.D. 2d 309, 532 N.Y.S.2d 376 (1988) ........... 37

Costle v. Fremont Indemnity Co., 839 F. Supp. 265

vb eh Eb Achtneaneddecansictecsrnnendesnsoutes 30

County of Allegheny v. Frank Mashuda Co., 360 U.S.

SED adthiuanavhiduaneedaunenedeuscdedeskirss 25, 33

Crawford v. Employers Reinsurance Co., 896 F. Supp.

ee ee SE, Wc ccccdcencasbucauencecesds 37

Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213

SE cchdbdedtesnudstddesesekuaanbiebasaddasuiéans 49

Digital Equipment Corp. v. Desktop Direct, Inc.,

Fee ae Gl GE SUE cnccnsvedcecssecocs 15, 21, 23, 24

Donovan v. City of Dallas, 377 U.S. 408 (1964) ...... 40

Doughty v. Underwriters at Lloyd's, London, 6 F.3d

SE Giascuss deattunectestecciedsccutes 23

Vili

PAGE

Duane v. Government Employees Insurance Co., 784

F. Supp. 1209 (D. Md. 1992), aff'd, 37 F.3d 1036

(4th Cir. 1994), cert. granted, 115 S. Ct. 1251,

cert. dismissed, 115 S. Ct. 2272 (1995) .......... 30

Eagle Life Insurance Co. v. Hernandez, 743 S.W.2d

671 (Tex. App. 1987) .......2.- ccc eee ee ee eeeeeeees 37

Erie R. Co. v. Tompkins, 304 U.S. 64 (1938) .......... 46

Fabe v. Columbus Insurance Co., 68 Ohio App. 3d

226, 587 N.E.2d 966 (1990) .......... 202 e cece eee. 41

Fair Assessment in Real Estate Association v.

McNary, 454 U.S. 100 (1981) ......-.-----6- 33, 34, 35

Fornaris v. Ridge Tool Co., 400 U.S. 41 (1970)....... 32

Foster v. Chesapeake Insurance Co., 933 F.2d 1207

(Sed Cie. IDB) 0c cccccccccccscccccseccovccscccceces 21,

Fragoso v. Lopez, 991 F.2d 878 (ist Cir. 1993) ....... 30, 39

Garamendi v. Caldwell, {1992 Transfer Binder] Fed.

Sec. L. Rep. (CCH) 4 96,861 (C.D. Cal. 1992)... 41

General Atomic Co. v. Felter, 434 U.S. 12 (1977) .... 40

Gillespie v. Waite-Hill Assurance, Ltd., No. 87-08504

RMT (Kx) (C.D. Cal. 1987) ........-6--e cece eeeee 41

Grode v. Mutual Fire, Marine & Inland Insurance

Co., 8 F.3d 953 (3rd Cir. 1994) ........-.- 6-50 eee 34, 46

Growe v. Emison, 113 S. Ct. 1075 (1993).............. 32

Gulfstream Aerospace Corp. v. Mayacamas Corp.,

GOS OD. SFE CIGTSD cc ccvccsecccscccsccesoscvccces 20

H.D. Roosen Co. v. Pacific Radio Publishing Co., 123

Cal. App. 525, 11 P.2d 873 (1932)...........-+5. 50

PAGE

Harrington v. Haller, 111 U.S. 796 (1884) ............ 19

Harrison v. St. Louis & S.F.R. Co., 232 U.S. 318

PIE onde dsawibibvvenecdasedudddhuscsdesssaccers 40

Hawaii Housing Authority v. Midkiff, 467 U.S. 229

SPE se cbuvendbndsivecvbdesedvenesevedssscecseesss 25

Helvering v. Therrell, 303 U.S. 218 (1938)............ 37

Idlewild Bon Voyage Liquor Corp. v. Epstein, 370

| RCN hae ee Re aaa 16

Insurance Co. v. Comstock, 16 Wall. (83 U.S.) 258

Nin iiiadiaiedtididcndibendat adc he 18, 19

Johnson v. Jones, 115 S. Ct. 2151 (1995).............. 22

Karl Koch Erecting Co. v. New York Convention

Center Development Corp, 838 F.2d 656

SE Ee 21

Kentucky v. Dennison, 24 How. (65 U.S.) 66

SPU bhtiiubedees vennhsiahnbcnticensecseeceoscssy< 19

Kinder v. Superior Court (Market Insurance Corp.),

78 Cal. App. 3d 574, 144 Cal. Rptr. 291 (1978). . 36, 43

The King v. Justices of Gloucestershire, | B. & A.

1, 109 Eng. Rep. 688 (K.B. 1830) ................ 18

Matter of Kinney (Miller), 257 A.D. 496, 14 N.Y.S.2d

11, aff'd, 281 N.Y. 840, 24 N.E.2d 494 (1939)... 37

Kline v. Burke Construction Co., 260 U.S. 226

AE re Se Rene nena paee ae 13, 24, 43

Langnes v. Green, 282 U.S. 531 (1931)................ 34

Louisiana Power & Light Co. v. City of Thibodaux,

SEP ccunchadavcdseeseceucedcbus 32, 33, 35

PAGE

Lumbermen's Mutual Casualty Co. v. Elbert, 348 U.S.

OD Cink cccc i cncccesnéacsedcscswencetvcenss 27, 28, 39

Maloney v. Rhode Island Insurance Co., 115 Cal.

App. 2d 238, 251 P.2d 1027 (1953)...........+++. 36

Markham v. Allen, 326 U.S. 490 (1946) ............55. 44

Martin v. Wilks, 490 U.S. 755 (1989)... ..... 6.6 e eens 40

Mastrobuono v. Shearson Lehman Hutton, Inc., 115 S.

Go, RSID CIGTSD onvccccdccecccccasccecstescsscoeces 48

McDermott International, Inc. v. Lloyd's Underwriters

of London, 944 F.2d 1199 (Sth Cir. 1991)........ 21, 23

McNeese v. Board of Education, 373 U.S. 668 (1963). 46

Meredith v. City of Winter Haven, 320 U.S. 228

CODED ooo cidcieviidcdddanccunnencecuswenececcassenes 12, 46

Midland Asphalt Corp. v. United States, 489 U.S.

FOS CRGBD) oo cccccccncceccscccsscesccesaccsecsceess 21

Milk ‘N’ More, Inc. v. Beavert, 963 F.2d 1342 (10th

Cie, GOED aces nccucadeincncdandccccccccssccnsensons 22

Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth,

Inc., 473 U.S. 614 (1985) ....... 26. cece cence eee ees 48

Morris v. Jones, 329 U.S. 545 (1947) ..... 12. 42, 43, 44, 45

Moses H. Cone Memorial Hospital v. Mercury

Construction Corp., 460 U.S. 1 (1983).........-. passim

Nassau Square Associates v. Insurance Commissioner

of California, 579 So. 2d 259 (Fla. App. 1991).. 42

New Orleans Public Service Inc. v. Council

of City of New Orleans (NOPSI), 491 U.S. 350

CRDGOD ceccceccescss seeks ebGden GheAdsswendsouneee passim

PAGE

Ex parte Newman, 14 Wall. (81 U.S.) 152 (1872)..... 18

North River Insurance Co. v. Allstate Insurance Co.,

866 F. Supp. 123 (S.D.N.Y. 1994) ................ 48

Oakbrooke Associates, Ltd. v. Insurance Commissioner

of California, 581 So. 2d 943 (Fla. App. 1991).. = 41

Ex parte Parker, 120 U.S. 737 (1887) ................. 18

Parker, petitioner, 131 U.S. 221 (1889)............... 18

Pelleport Investors v. Budco Quality Theatres, 741

Peete Pe GONG WED hve cnedceccevecccscccccvcs 22

Penn General Casualty Co. v. Pennsylvania ex rel.

Schnader, 294 U.S. 189 (1935)........... 40, 43, 44, 45

In re Pennsylvania Co., 137 U.S. 451 (1890).......... 18

Pennsylvania v. Williams, 294 U.S. 176 (1935) ...40, 44, 45

Perry v. Thomas, 482 U.S. 483 (1987)................. 50

Prima Paint Corp. v. Flood & Conklin Manufacturing

Seg FOO Wels BO COMED wn vcncnscncesctecdesccess 48

Princess Lida v. Thompson, 305 U.S. 456 (1938) ..... 44

Propper v. Clark, 337 U.S. 472 (1948) ................ 46

Prudential Reinsurance v. Superior Court

(Garamendi). 3 Cal.4th 1118, 842 P.2d 48, 14

Cal. Rptr. 749 (Cal. 1992) ............. 4, 38, 46, 47, 49

Railroad Co. v. Wiswall, 23 Wall. (90 U.S.) 507

RRR EL RS ee eee eee ee 17, 18, 19, 20

Railroad Commission v. Pullman, 312 U.S. 496

EI San LA y= ae ee hee eae 16, 32

PAGE

Regis Associates v. Rank Hotels ( Management) Ltd.,

894 F.2d 193 (6th Cir. 1990)...... 0.6. - cece eee ees 22

Riehle v. Margolies, 279 U.S. ZIS (CIDA) «0. vccccccees 42,44

Rosenberg Brothers & Co. v. Curtis Brown Co., 260

U.S. 516 (1923)... 2... ccc cece cece eee e cere eeeeeeeees 14, 20

Ex parte Russell, 13 Wall. (80 U.S.) 664 (1871) ...... 18, 19

Salve Regina College v. Russell, 499 U.S. 225 (1991) 46

Ex parte Schollenberger, 96 U.S. 369 (1878) ......... 19

Southland Corp. v. Keating, 465 U.S. 1 (1984)......-. 50

Sowell v. Federal Reserve Bank, 268 U.S. 449 (1925) 43

Stainback v. Mo Hock Ke Lok Po, 336 U.S. 368

(1949) 2... cccccccccccccccccecscccecccercsvsnneress 31

Taylor v. Freeland & Kronz, 503 U.S. 638 (1992)..... 35

Texas Commerce Bank-El Paso v. Garamendi, 28 Cal.

App. 4th 1234, 34 Cal. Rptr. 2d 155 (1994) ..37, 38, 49

Thermtron Products, Inc. v. Hermansdorfer, 423 U.S.

336 (1976) ........cceeeceeececcees 10, 13, 17, 18, 20, 21

Things Remembered, Inc. v. Petrarca, 64 U.S.L.W.

4035 (1995) 22... . cece cece cence eee eee eteeneeneeeees 10, 14

Todd v. DSN Dealer Service Network, Inc., 861 F.

Supp. 1531 (D. Kan. 1994) .........0eeeeeee renee 30

Travelers Insurance Co. v. Keeling, 996 F.2d 1485

(2d Cir. 1993) ......ccceeeeeeeeee reece eeeeeeenenees 23

Tribune Co. v. Abiola, 66 F.3d 12 (2d Cir. 1995)...... 30, 39

xili

PAGE

Underwriters National Assurance Corp. v. North

Carolina Life Insurance Guarantee Association,

GBS DB. GHE CIGEED cccccccccccccevccscscccccsccss 40

United Gas Pipe Line Co. v. Ideal Cement Co., 369

FRY), rrr rrr rrr rere 32

United Labor Life Insurance Co. v. Pireno, 458 U.S.

SG nc sctdsnccccdvcncusczescecccessenssesces 35

United States v. Bank of New York & Trust Co., 296

TD, BD GI occ vcnnevcccccesecsesscsvccscesces 43,44

United States v. Klein, 303 U.S. 276 (1938)........... 42

United States Department of Treasury v. Fabe,

The Bo > Tl.) errr 35

Universal Reinsurance Corp. v. Allstate Insurance

Co., 16 F.3d 125 (7th Cir. 1994).............6005 48

University of Maryland v. Peat Marwick Main & Co.,

923 F.2d 265 (3d Cir. 1991)...........-- cece ee eees 30

Waco v. United States Fidelity & Guaranty Co., 293

TLD, BEERS cence verscccscosessnsdeescnvesssee 15

Webster v. Superior Court (Gillespie), 46 Cal. 3d 338,

758 P.2d 596, 250 Cal. Rptr. 268 (1988).......... 4]

Weinberger v. Romero-Barcelo, 456 U.S. 305 (1982). 29

Wilton v. Seven Falls Corp., 115 S. Ct. 2137 (1995)... = 31

Statutes

Federal Arbitration Act, 9 U.S.C.

et BOND vusunadavecees 8, 9, 16, 23, 25, 30, 46, 48, 49, 50

McCarran-Ferguson Act, 15 U.S.C.

OO GEOR TRESS «occ vcscescveccsccoversccsenccsss 34, 35, 50

XIV

PAGE

28 U.S.C. § 1291..........- 10, 11, 13, 14, 15, 17, 20, 21, 22

28 U.S.C. § 1292(a)(1).....- cece cece een e eee e eee enees 20

2B U.S.C. § 1331... ce cece cece cree en enn erteneeeceeeees 8

2B U.S.C. § 1332.2... cc cececernececerececeeees 8, 10, 24, 30

2B U.S.C. § 1441.20... cc cece cece een e ne reeeeeceeerees 24, 30

28 U.S.C. § 1441(c) (1988 ed.) «2... - eee e eee reece ee 8

28 U.S.C. § 1447.........ccccecccrcscccecees 10, 11, 13, 14, 17

28 U.S.C. § 2072(b)...... cece eee e eee e cree eee ten eneenees 31

2B U.S.C. § 2201... 2... cece cere ec eneenneeeeencereunees 31

42 U.S.C. § 19B3....... cc ccceccececccrecsecereeeseeeers 33

43 U.S.C. § 666 ... 2... cece cece cee e eee e renee enn eenenes 34

Cal. Code Civ. Proc. §§ 22-23 ........----e eee eeeeeees 36

Cal. Ins. Code §§ 1010-1062 .........---0:e cece neers 36, 37

Cal. Ins. Code § 1011 .........--- eee eee reece cree eeeeees 3

Cal. Ins. Code § 1016 ..........-.-- eee cece e cere ee eeeees 3

Cal. Ins. Code § 1021 .........---. ee eee cree eeeeeeeeeeee 5

Cal. Ins. Code § 1031.........- 2. cece eee eeeeeees 4, 8, 34, 46

Cal. Ins. Code § 1032 .........----e eee ceee ee eeeeeeees 5

Cal. Ins. Code § 1033 ........----- eee eee cece ee eeeeeeees 5, 38

Cal. Ins. Code § 1035 .........---- eee cers eeeeeeeeees 4, 38

Cal. Ins. Code § 1035.5 .......---.-eeeeeeeeeeeeeeeeeees 5

Cal. Ins. Code § 1037 ........---.e eee ce cere reeeeeees 4, 36,41

Cal. Ins. Code § 1057 .......----- cece cece reece eeeeeeees 3,37

Cal. Ins. Code § 1058

Cal. Ins. Code §§ 1063-1063.15 ....................... 5

Cal. Ins. Code §§ 1064.1-1064.12.................... 3,4, 42

Cal. Ins. Code § 1125, added by Act of Oct. 12, 1995,

ch. 843, § 1, 1995 Cal. Adv. Legis. Serv. 4994,

ET aubbicetucccescscedecssediveavece 3

Uniform Insurers Liquidation Act, 13 U.L.A. 32]

(1986)

Other Authorities

Grant Gilmore & Charles L. Black, Jr., The Law of

Admiralty §§ 10-8, 10-17.....................00-. 34

Ronald A. Jacks, Arbitration and Insurer Insolvencies,

in ABA, Law and Practice of Insurance Company

BURG CPERGY BOW CIGGOD cc cc ccesccscccccccesccnccces 48

Henry T. Kramer, The Nature of Reinsurance 4-6, in

Reinsurance (Robert W. Strain ed. 1980)......... 6

P. Phillips, The Statutory Jurisdiction and Practice of

the Supreme Court of the United States 276 (2d

Pekar tend ctescrdedesbusscakineadeteeseeeen: 18,19

Prefatory Notes to Uniform Insurers Liquidation Act,

SP SE ED von wes chcduddsbaesckdeiceders 4,42

David L. Shapiro, Jurisdiction and Discretion, 60

N.Y.U. L. Rev. $43, 370-77 (1965) ...........02+. 25

Richard R. Spencer, Jr., Obligations of Guarantee

Associations, in ABA, Law and Practice of

Insurance Company Insolvency Revisited 535

Ss shvGsd mush cadeseccecechurnehacbesrsdadcdess 5

xvi

— IN THE

Subcommittee on Oversight and Investigations, House Supreme Court of the United States

Committee on Energy and Commerce, Failed

Promises: Insurance Company Insolvencies, OCTOBER TERM, 1995

Committee Print 101-P, 101st Cong., 2d Sess. sn ones

(1990) ....ccccccccccccoseceesseseennennnn=n===—EEEE 6, 38

Edson R. Sunderland, The Problem of Appellate

Review, 5 Tex. L. Rev. 126, 129-130 (1927) ..... 19 CHUCK QUACKENBUSH. I afi atin iat Gan

of California, in His Capacity as Liquidator and Trustee of

the Mission Insurance Company Trust, Mission National

Insurance Company Trust, Enterprise Insurance Company

Trust, Holland-America Insurance Company Trust and

Mission Reinsurance Corporation Trust,

Wright, Miller & Cooper, Federal Practice and

Procedure § 3914.11 (2d ed. 1992) ............... 20

Petitioner.

ALLSTATE INSURANCE COMPANY,

Respondent

ON WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE NINTH CIRCUIT

BRIEF OR RESPONDENT

Respondent Allstate Insurance Company submits this brief

to urge affirmance of the judgment below.

OPINIONS BELOW

The order of the District Court remanding the case to state

court (Pet. App. 13a-34a) is unpublished. The order of the

Court of Appeals denying petitioner's motion to dismiss the

appeal (Br. Opp. Pet. App. la-2a) is unpublished. The opin-

ion of the Court of Appeals on appellate jurisdiction and the

merits (Pet. App. la-12a) is reported at 47 F.3d 350. The

order of the Court of Appeals denying rehearing (Pet. App.

35a-37a) is unpublished.

STATUTES INVOLVED

The federal statutes involved in this case are the provisions

of the Judicial Code governing diversity and removal juris-

diction, 28 U.S.C. §§ 1332(a), 1441(a) (Pet. App. 115a); the

Federal Arbitration Act, 9 U.S.C. §§ 1-16 (Br. Opp. Pet. App.

4a-12a); and the provision governing appeals from final deci-

sions of the District Courts, 28 U.S.C. §1291 (App. la

hereto). The state statutes involved are Article 14 of the

California Insurance Code, governing Proceedings in Cases

of Insolvency and Delinquency, Cal. Ins. Code §§ 1010-

1062 (Pet. App. 59a-86a); and Article 14.3 of the California

Insurance Code, which is known as the Uniform Insurers

Rehabilitation (or Liquidation) Act, Cal. Ins. Code

§§ 1064.1-1064.12 (Pet. App. 105a-114a).

STATEMENT OF THE CASE

This ts a civil action for money damages commenced by

petitioner, the California Insurance Commissioner acting as

Liquidator and Trustee for the Mission group of insurance

companies (the “Liquidator”), against respondent Allstate

Insurance Company (“Allstate”). J.A. 35-61. The Mission

companies (collectively, “Mission”) had previously been

piaced in conservatorship and later in liquidation on grounds

of their hazardous financial condition. Pet. App. 116a-121a;

J.A. 8-34.

A. Statutory Procedures for Insurance Liquidations.

Under California law, when an insurer doing business

within the state becomes insolvent, the Insurance Commis-

sioner may apply to the Superior Court for an order autho-

rizing the Commissioner, as conservator, to take possession of

the insurer's books and property and to conduct its business.

Cal. Ins. Code §§ 1011, 1064.2(c). If efforts to rehabilitate the

company would be futile, the Commissioner may apply to the

court for an order authorizing him or her to liquidate and

wind up the insurer's business. /d. § 1016. An order appoint-

ing the Commissioner as conservator or liquidator of an insol-

vent insurer vests in the Commissioner title to all the insurer's

assets. Jd. §§ 1011, 1064.2(a)-(b). In that capacity, he or she

is “deemed to be a trustee for the benefit of all creditors and

other persons interested in the estate” of the insolvent insurer.

Id. § 1057.

Because most insurance companies do business in more

than one state, they can be subject to multiple receiverships.

Under the Uniform Insurers Liquidation Act (the “Uniform

Act”), 13 U.L.A. 321 (1986), enacted in California as Cal.

Ins. Code §§ 1064.1-1064.12, the receiver in the state where

the insolvent insurer is domiciled takes title to the insurer's

assets wherever located. /d. §§ 1064.2(b), 1064.3(b).'

' ‘The term “receiver” is used to refer to conservators, rehabili-

tators and liquidators generically. See Cal. Ins. Code § 1064. 1(k). Under

the Uniform Act, receivers appointed in states other than the state of

domicile perform certain functions as “ancillary receivers” with respect

to assets and claimants located in their respective states. Cal. Ins. Code

§§ 1064.2(b), 1064.3(b). See also Cal. Ins. Code § 1125, added by Act of

Oct. 12, 1995, ch. 843, § 1, 1995 Cal. Adv. Legis. Serv. 4994, 4995-5006

(West) (enacting Interstate Insurance Receivership Compact). Indeed, 1t

appears that the Liquidator serves as ancillary receiver of Holland-Amer-

ica Insurance Company. one of the entities on whose behalf he brings this

action, as that company was a Missouri corporation, J.A. 8, 23, and ami-

cus Missouri Director of Insurance serves as domiciliary liquidator

Angoff v. Holland-America Ins. Co. Trust, Notice of Order, No. CV87-

4356 (Mo. Cir Ct., Jackson Co., May 11, 1995).

1. The Collection and Management Function.

The Commissioner, as conservator or liquidator of an insol-

vent insurer, is responsible for conserving the insurer's assets

and conducting its business and affairs. Cal. Ins. Code

§§ 1037(a), 1064.2(c). To assist in that task, the Commis-

sioner is specifically authorized to hire special deputies,

counsel, clerks and assistants, all of whom are paid out of the

assets of the insolvent insurer, and to delegate to them such

powers as he or she deems necessary. /d. §§ 1035, 1064.2(c).

The conservator or liquidator is required to collect all debts

due and claims belonging to the insurer, id. § 1037(b), but has

the authority to settle claims “upon such terms and conditions

as the commissioner shall deem to be most advantageous to

the estate of the person being administered or liquidated,” id.

§ 1037(c). With respect to such debts and claims, the Cali-

fornia Insurance Code codifies and preserves the right of

setoff, i.e., the principle that a party owing money to an insol-

vent entity may ordinarily deduct from the debt any amount

that the insolvent entity owes that party. /d. § 1031.”

For the purpose of collecting debts and performing his or

her other duties, the conservator or liquidator is empowered

to “prosecute and defend any and all suits and other legal pro-

ceedings” involving the insolvent insurer. Jd. § 1037(f). Under

the Uniform Act, the liquidator or conservator from an insol-

vent insurer's state of domicile may sue on behalf of the

insurer in the courts of any state. See id. §§ 1064.2(b),

1064.3(b), 1064.10; Prefatory Note, 13 U.L.A. at 323.

* ‘The California Supreme Court explained in Prudential Rein-

surance v. Superior Court (Garamendi), 3 Cal.4th 1118, 1142, 842 P.2d

48. 63. 14 Cal. Rptr. 749, 764 (1992), that “[o}ffsetting debts not only

spreads risk but also acts as mutual security for performance,” thus

enhancing the ability of smaller insurers, in particular, to survive and

compete

2. The Claim-Processing Function.

Besides managing the insolvent insurer's assets and col-

lecting debts owed to it, the other principal statutory function

of a liquidator is to process and pay claims of the insurer's

creditors. Creditors of the insurer are sent notice and have six

months to file proofs of claim with the liquidator. Cal. Ins.

Code § 1021(a). If the liquidator rejects a claim, the claimant

may apply to the court for allowance of the claim. /d. § 1032.

Funds from the insolvent insurer's estate are distributed to the

creditors of the estate according to priorities established by

statute. Jd. § 1033. General creditors’ claims are subordinated

by statute to policyholder and guarantee association claims.

Id. § 1033(a)(6).’

B. The Mission Liquidation.

On November 26, 1985, the California Insurance Com-

missioner obtained orders from the Superior Court in Los

Angeles placing Mission Insurance Company and four of its

affiliates in conservatorship. Pet. App. 116a-118a, J.A. 8-19.

> In a liquidation, most policyholder claims against an insolvent

insurer are paid not by the insolvent insurer itself but are covered by the

California Insurance Guarantee Association, see Cal. Ins. Code §§ 1063-

1063.15, and similar guarantee associations in other states. See generally

Richard R. Spencer, Jr., Obligations of Guarantee Associations, in ABA,

Law and Practice of Insurance Company Insolvency Revisited 535

(1989). With respect to a “covered claim,” see Cal. Ins. Code § 1063. 1(c),

the Guarantee Association assumes the insolvent insurer's duties under

the insurance policy. /d. § 1063.2. The Association then is deemed to be

an assignee of the policyholder’s mghts against the insolvent insurer, id.

§ 1063.4(b), and its claims (and claims of similar associations in other

states) have equal priority with policyholders’ uncovered claims, id. §

1033(a)(5). The liquidation statute provides the various state guarantee

associations early access to their expected share of the insolvent insurer's

estate. Jd. § 1035.5(a). The Guarantee Association obtains funds by

assessing premiums against its members, id. § 1063.5, which consist of

the insurance companies licensed to do business in the state, id.

§ 1063(a).

On February 24, 1987, the same court issued liquidation

orders for these companies. Pet. App. 119a, 121a, J.A. 23-34.‘

In the Mission conservation and liquidation proceedings,

the Liquidator has requested and obtained at least eleven sep-

arate orders from the California Superior Court expressly

authorizing him “to initiate such equitable or legal actions or

proceedings in this or other states as may appear to him nec-

essary to carry out his functions as Liquidator [or Conserva-

tor].” Pet. App. 118a, 121a; J.A. 10, 13, 16, 19, 22, 25, 28,

31, 34 (emphasis added). Those orders also state that all per-

sons are enjoined from, among other things, interfering with

the “possession, titie and rights” of the Liquidator “in and to

the assets of Respondent,” and from “instituting or prose-

cuting any action or proceeding against” the Mission com-

panies or their Liquidator without the consent of the court.

Pet. App. 117a, 120a; J.A. 9, 12, 15, 18, 24, 27, 30, 33.

Pursuant to the liquidation orders, the Liquidator com-

menced the winding up of the Mission companies’ business.

Allstate has filed claims with the Liquidator for amounts

the Mission companies owed it under various reinsurance

contracts.°

* — The Liquidator improperly includes in his Statement of the Case

numerous allegations of fact that have no support in the record, includ-

ing the repeated charge that Mission's reinsurers caused its insolvency.

That allegation is irrelevant to the issues before the Court; in any event,

if made against Allstate, it would be vigorously denied. See Subcomm.

on Oversight & Investigations of House Comm. on Energy & Commerce,

Failed Promises: Insurance Company Insolvencies, Committee Print 101-

P, 101st Cong., 2d Sess., 11-19 (1990) (Mission's inslovency is “tale of

reckless and incompetent management”).

. Reinsurance is insurance for insurance companies. Reinsurance

permits an insurer to spread its insurance risk by assigning (or “ceding”)

portions of the risk to other insurance companies acting as reinsurers in

exchange for a share of the premiums. See generally Colonial Am. Life

Ins. Co. v. Commissioner of Internal Revenue, 491 U.S. 244, 246-247

(1989), Henry T. Kramer, The Nature of Reinsurance 4-6, in Reinsurance

(Robert W. Strain ed. 1980). As is common in the industry, Mission both

C. The Suit Against Allstate

On February 9, 1990, the Liquidator filed the present suit

against Allstate in the California Superior Court for Los

Angeles County. J.A. 35-61. The complaint includes two

counts: for damages for alleged breach of certain reinsurance

contracts, and for a declaratory judgment that Allstate is obli-

gated to “pay or make provision to pay” the money allegedly

owed under those contracts. J.A. 51-53.°

The Liquidator’s claims against Allstate arise under several

thousand separate reinsurance contracts entered into between

Allstate and some of the Mission companies between 1961

and 1985. J.A. 98. Virtually all of these reinsurance contracts

contain agreements providing that disputes arising under the

contracts shall be settled by arbitration.’

provided reinsurance to other companies and sought reinsurance for its

own obligations. Pet'r Br. 2, 5, 10 & n.25, 12 & n.30. Allstate notes that

the two proofs of claim seeking “contingent and undetermined” amounts

included in the Joint Appendix, J.A. 153-164, were not part of the record

in the District Court, were attached to the Liquidator’s Petition for

Rehearing in the Court of Appeals over Allstate's objection, J.A. 177 1.4,

and have since been superseded in the liquidation proceeding.

The complaint also asserts the same claims against 19 other

named reinsurers and 1000 alleged reinsurers denominated “Does |

through 1000.” J.A. 51-53. It asserts tort claims against “Does 500

through 1000,” but not against any named defendants. J.A. 53-59.

Together with the Complaint, the Liquidator filed a Notice of Related

Cases, seeking to have this suit assigned to Judge Kurt J. Lewin, to whom

the Mission liquidation proceeding, as well as ar earlier suit against a

number of Mission's reinsurers, had been assigned. J.A. 62-63.

7 Reinsurance “treaties” cover large classes of business, “facul-

tative certificates” cover single risks. Clauses providing for binding arbi-

tration are contained in each of the approximately 26 treaties ceding risks

from Mission to Allstate, and each of the approximately 41 treaties ced-

ing risks from Allstate to Mission. J.A. 97-98. The remaining contracts

at issue are facultative certificates, almost all of which also contain

agreements for binding arbitration. J.A. 97, 99.

Allstate has served no answer in the action and therefore

has not had occasion to state its defenses. Allstate believes

that approximately $7 million in reinsurance balances is

claimed by Mission under the contracts, subject to the

defenses and setoffs that Allstate may assert. Allstate disputes

the validity of these claims and intends to assert, among other

defenses, that it is entitled to set off against these claims

approximately $24 million in reinsurance balances that is due

to Allstate from Mission as Allstate’s reinsurer under other

contracts. Cal. Ins. Code § 1031.*

On August 2, 1990, Allstate timely removed the Liquida-

tor’s breach of contract suit to the United States District

Court for the Central District of California based on diversity

of citizenship.’ Allstate then moved under the Federal Arbi-

tration Act, 9 U.S.C. §§ 1 et seq., to compel arbitration under

the reinsurance agreements and to stay the litigation pending

arbitration. J.A. 77. The Liquidator moved to remand the case

to state court based on abstention and lack of jurisdiction.

. Some of the contracts name Northbrook Insurance Company,

which later changed its name to Northbrook Excess and Surplus Insur-

ance Company (“NESCO"”), as the ceding insurer. NESCO, a former sub-

sidiary of Allstate, was merged into Allstate in January 1985, and

Allstate assumed all of NESCO's assets and liabilities. J.A. 96-97.

% Allstate's co-defendant Insurance Company of North America

(“INA”) also joined in the motion. Allstate and INA, which were the only

two defendants served with process, Pet. App. 15a, removed the action

to federal court on the ground that there was diversity of citizenship

between themselves and the Liquidator, 28 U.S.C. § 1332(a), and that the

claims asserted against Allstate and INA were separate and independent

of the claims against nondiverse defendants, permitting removal under 28

U.S.C. § 1441(c) (1988 ed.), which had not yet been amended to limit

such removals to claims giving rise to federal-question jurisdiction under

28 U.S.C. § 1331. J.A. 73, 76. The Liquidator subsequently filed a notice

of dismissal of all defendants except Allstate and INA, and Allstate and

INA then filed a supplemental notice of removal based on complete

diversity between the Liquidator and themselves as the only remaining

defendants. J.A. 111-115. INA later settled and was dismissed from the

case.

Without deciding Allstate’s arbitration motion, the District

Court entered an order remanding the case to the state court.

Pet. App. 13a-34a. The District Court concluded that it had

jurisdiction but should abstain from exercising that jurisdic-

tion under Burford v. Sun Oil Co., 319 U.S. 315 (1943).

Although Allstate had not filed an answer to the complaint,

the District Court relied heavily on its expectation that the

central issue in the case would be Allstate’s anticipated

defense of setoff and its understanding that the state-court

judge had previously dealt with setoff issues in connection

with the Mission insolvency. Pet. App. 14a-15a, 25a-26a, 31a,

33a, 34a. It ignored Allstate’s argument, among others, that

abstention was inappropriate in the face of a motion under the

Federal Arbitration Act.'°

Allstate filed a timely appeal from the remand order to the

United States Court of Appeals for th ‘inth Circuit.'' The

Liquidator filed a motion to dismiss the appeal, which was

denied. Br. Opp. Pet., App. la-2a. On February 2, 1995, a

unanimous panel of the Court of Appeals reversed the District

Court's order of remand. Garamendi v. Allstate Ins. Co., 47

F.3d 350, Pet. App. la-12a.

After holding “that a remand order based on abstention” is

“a final collateral order that is reviewable on appeal,” 47 F.3d

at 353, Pet. App. Sa-6a, citing Moses H. Cone Memorial Hos-

pital v. Mercury Construction Corp., 460 U.S. 1, 11-13

(1983), the Court of Appeals then concluded that abstention

was not appropriate in this case. The court reasoned that the

Burford doctrine, which finds its justification in the discre-

tionary powers of a federal court sitting in equity, should not

od Def. Mem. of Law in Opp. to Motion to Remand, 22, 23, Def.

Supp. Mem. of Law Respecting Motion to Remand, 7.

ue Allstate requested, in the alternative, that its appeal be treated

as a petition for writ of mandamus if that Court found that it lacked

appellate jurisdiction. App’t Opening Br. 2, n. 1; App’t Br. Opp. Motion

to Dismiss Appeal 11-12 & n.6.

be extended to actions at law for the recovery of contract

damages. 47 F.3d at 354-56, Pet. App. 8a-12a.

On February 16, 1995, the Liquidator filed a petition for

rehearing and suggestion for rehearing en banc, which the

Court of Appeals denied on May 19, 1995. Pet. App. 35a-36a.

On August 11, 1995, the Liquidator petitioned this Court for

a writ of certiorari, which the Court granted on October 16,

1995. 116 S. Ct. 334.

SUMMARY OF ARGUMENT

This case is about the duty of the federal courts to exercise

the jurisdiction conferred on them by Congress. The Courts of

Appeals have appellate jurisdiction over appeals from all

“final decisions” of the District Courts. 28 U.S.C. § 1291. The

District Courts have original jurisdiction over cases between

parties of diverse citizens’.ip. 28 U.S.C. § 1332. In both

instances, the federal courts lack the authority to refuse to

exercise the jurisdiction that Congress has conferred. E.g.,

New Orleans Public Service Inc. v. Council of City of New

Orleans (“NOPSI”), 491 U.S. 350, 359 (1989).

I. Because the District Court remanded the case to state

court based on the nonstatutory ground of abstention under

Burford v. Sun Oil Co., 319 U.S. 315 (1943), it is uncontested

that the bar to appellate review of statutory remand orders, 28

U.S.C. § 1447(d), does not apply. Things Remembered, Inc. v.

Petrarca, 64 U.S.L.W. 4035 (U.S. 1995); Thermtron Prods.,

Inc. v. Hermansdorfer, 423 U.S. 336 (1976). Appellate juris-

diction is therefore governed solely by the principles of final-

ity embodied in 28 U.S.C. § 1291.

A remand based on the Burford doctrine satisfies the most

basic principles of finality because it ends the litigation in the

District Court and leaves that court with nothing further to do.

Because the remand order here put Allstate “effectively out of

federal court”—indeed, put Allstate expressly and literally

out of federal court—it was final and appealable under

§ 1291. Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp.,

460 U.S. 1, 9 (1983).

The suggestion in Thermtron that a remand order is not

final, which was made without the benefit of briefing and

argument by the parties on the issue, relies on a 19th-century

case applying an understanding of finality that is flatly incon-

sistent with this Court’s modern cases. The finality of an

abstention-based remand is no different from that of an

abstention-based dismissal because both have the same effect:

the surrender of jurisdiction to a state court. Congress has cre-

ated no exception to §1291 beyond the review bar of

§ 1447(d), and this Court should not do so.

Even if the remand order were not final in the usual sense,

it would be final and appealable under the collateral-order

doctrine of Cohen v. Beneficial Industrial Loan Corp., 337

U.S. 541 (1949). Because the issue of Burford abstention is an

important question completely separate from the merits of

arbitrability and the underlying contract claims, and because

the District Court conclusively determined the abstention

question in a way that is effectively—indeed, completely—

unreviewable on appeal from the final judgment, the remand

order is appealabie as a final collateral order. E.g., Moses H.

Cone, 460 U.S. at 11-13.

II. The Court of Appeals correctly reversed the District

Court's abstention order. As this Court made clear in NOPSI,

“federal courts lack the authority to abstain from the exercise

of jurisdiction that has been conferred,” 491 U.S. at 358, and

may exercise their discretion to deny “certain types of relief”

only in narrow and “carefully defined” areas, id. at 359. The

Burford doctrine permits a federal court to refuse equitable

relief that would restrain or interfere with a state adminis-

trative proceeding or decision only where granting relief

would disrupt state policymaking processes by displacing spe-

cialized state-court review on matters of peculiarly local con-

cern. E.g., id. at 361-362.

Here, however, Allstate is not seeking to restrain or inter-

fere with the Liquidator’s performance of his duties; the Liq-

uidator is suing to collect money from Allstate. In addition,

the Liquidator’s role in this suit is not that of an impartial

state regulator pursuing administrative policymaking, but a

trustee for the private interests of the Mission companies pur-

suing contract claims on their behalf. The issues involved,

moreover, are not “distinctively local.” There is therefore no

basis to apply the Burford doctrine.

Even setting aside the carefully defined criteria of Burford,

Allstate’s defense of this action in federal court in no way

compromises any State interests. First, removal of the Liq-

uidator’s suit to federal court does not interfere with any state

statutory scheme. California law does not purport to con-

centrate all litigation involving an insolvent insurer in a sin-

gle forum. Even if California had sought to do so, this Court

has repeatedly held that subjecting a receiver to in personam

claims outside the receivership court does not interfere with

the receiver's functions or the receivership court’s adminis-

tration of the insolvent’s estate. E.g., Coit Independence Joint

Venture v. FSLIC, 489 U.S. 561 (1989); Morris v. Jones, 329

U.S. 545 (1947). The interest of convenience, which any lit-

igant could assert, cannot overcome the statutory right to fed-

eral jurisdiction.

Second, the presence of state law issues, whether settled or

otherwise, is also no reason to abstain from hearing a case

within the court’s diversity jurisdiction, which obviously con-

templates that a federal court will decide state-law issues.

E.g., Meredith v. City of Winter Haven, 320 U.S. 228. 236

(1943). If the District Court reaches the state-law issues here,

it will only have to decide ordinary issues of contractual

interpretation, contractual and common-law defenses, the

statutory right of setoff, and whatever other issues the parties

may raise. The possibility of inconsistent adjudications in dif-

ferent cases raising similar issues, which is inherent in any

multicourt system, provides no reason to abstain.

At a minimum, the District Court had no discretion to

abstain in the face of Allstate’s motion to compel arbitration

under the Federal Arbitration Act. The enforceability of arbi-

tration agreements is a matter of federal law, e.g., Allied-

Bruce Terminix Cos. v. Dobson, 115 S. Ct. 834 (1995), and a

decision on an arbitration motion therefore cannot conceiv-

ably disrupt the development of coherent state policy. Allow-

ing a party to delay the resolution of an arbitration motion

with “prearbitration litigation” about abstention, id. at 843

(O’Connor, J., concurring), wou!d frustrate “Congress’ clear

intent... to move the parties to an arbitrable dispute out of

court and into arbitration as quickly and easily as possible.”

Moses H. Cone, 460 U.S. at 22.

ARGUMENT

THE DISTRICT COURT’S ORDER REMANDING

THE CASE TO STATE COURT WAS

REVIEWABLE ON APPEAL

The jurisdiction of the federal courts is defined by

Congress, and the judiciary has no authority to expand or con-

tract that jurisdiction. New Orleans Public Service, Inc. v.

Council of the City of New Orleans (“NOPSI”), 491 U.S. 350,

359 (1989); Kline v. Burke Construction Co., 260 U.S. 226,

234 (1922). Section 1291 of the Judicial Code provides that

“[t}he courts of appeals . . . shall have jurisdiction of appeals

from all final decisions of the district courts of the United

States.” 28 U.S.C. § 1291. Thus, the reviewability by appeal

of the District Court’s order remanding this case to state court

is governed solely by the principles of finality embodied in 28

U.S.C. § 1291."

12 As the Liquidator concedes, Pet’r Br. 18, 21-22, 29-30, the

review bar of 28 U.S.C. § 1447(d) does not apply here. This Court held

in Thermtron Products, Inc. v. Hermansdorfer, 423 U.S. 336, 345-346

Because the District Court's order effectively put Allsi te

out of federal court, the Court of Appeals correctly held that

the order was final and appealable under § 1291 as construed

in Moses H. Cone Memorial Hospital v. Mercury Construction

Corp., 460 U.S. 1 (1983). See Pet. App. 4a-8a. As Moses H.

Cone makes clear, the District Court’s order is final for pur-

poses of § 1291 whether the order is treated as a final judg-

ment in the usual sense or as a final collateral order under the

doctrine of Cohen v. Beneficial Industrial Loan Corp., 337

U.S. 541 (1949).

A. The District Court’s Remand Order Was Appealable

As a Final Decision Under 28 U.S.C. § 1291.

There can be no question that a District Court’s decision to

dismiss a case on abstention grownds is final and appealable.

See, e.g., NOPSI, 491 U.S. at 358, see also Rosenberg Bros.

& Co. v. Curtis Brown Co., 260 U.S. 516 (1923) (order quash-

ing service of process for lack of personal jurisdiction). The

prospect of subsequent litigation in state court, which an

abstention-based dismissal is designed to make possible, does

not deprive the dismissal of finality. Section 1291, after all,

provides an appeal from the United States District Court to

the United States Court of Appeals.

(1976), and recently reaffirmed in Things Remembered, Inc. v. Petrarca,

64 U.S.L.W. 4035 (1995), that “§ 1447(d) must be read in pari materia

with § 1447(c), so that only remands based on grounds specified in

§ 1447(c) are immune from review under § 1447(d).” 64 U.S.L.W. at

4036, citing 423 U.S. at 345-346. Burford abstention is an extrastatutory

ground for removal; it does not appear in 28 U.S.C. § 1447(c). The only

grounds for remand specified in that provision are a “defect in removal!

procedure” or “lack[{ ] [of] subject matter jurisdiction.” 28 U.S.C.

§ 1447(c); see Things Remembered, 64 U.S.L.W. at 4036.

'3 Allstate asked the Court of Appeals to issue a writ of mandamus

in the event an appeal did not lie. See note 11, above. If this Court con-

cludes that review by appeal was unavailable, it should either affirm the

judgment below on the alternative ground that the District Court's deci-

sion warranted issuance of the writ, see note 21, below, or remand the

case to the Court of Appeals with directions to address the petition for

mandamus.

In Carnegie-Mellon University v. Cohill, 484 U.S. 343,

351-57 (1988), this Court held that, notwithstanding the

absence of express statutory authorization, the district courts

have authority to remand a removed case to state court on

grounds that would otherwise permit the court to dismiss the

case. 484 U.S. at 357. The District Court exercised that

authority here. If a district court has authority to remand

instead of dismissing upon holding that it should abstain

under the Burford doctrine, its decision exercising that

authority must be subject to appeal pursuant to § 1291 if it is

a “final decision” within the meaning of that section.

There can be no question that it is. The District Court's

order of remand here had precisely the same effect as a dis-

missal: it definitively and finally put an end to proceedings in

the District Court. Just as with a dismissal, the remand order

here was literally the “final”—that is, the last—decision the

District Court can or will make absent appellate reversal.

Because the order “ ‘ends the litigation on the merits and

leaves nothing for the court to do,’ ” it is final and appealable

under 28 U.S.C. § 1291. Digital Equipment Corp. v. Desktop

Direct, Inc., 114 S. Ct. 1992, 1995 (1994), quoting Catlin v.

United States, 324 U.S. 229, 233 (1945). In other words, All-

state must be permitted an appeal now because if it is not, it

will be wholly deprived of its right to appeal the District

Court's Burford ruling. See Waco v. United States Fid.

& Guar. Co., 293 U.S. 140 (1935) (federal court's order dis-

missing defendant's third-party complaint final and imme-

diately appealable because remand of case to state court

rendered it otherwise unreviewable). Surely a remanded

party's right to an appeal should not turn on the District

Court's decision to remand rather than dismiss, when the

effect in either case is to surrender jurisdiction to the state

court.

This Court's decision in Moses H. Cone Memorial Hospi-

tal v. Mercury Construction Corp., 460 U.S. 1 (1983), rein-

forces that conclusion. In Moses H. Cone, one of the parties

had brought suit in federal court to compel arbitration pur-

suant to § 4 of the Federal Arbitration Act, 9 U.S.C. § 4. The

District Court, invoking the doctrine of Colorado River Water

Conservation District v. United States, 424 U.S. 800 (1976),

stayed the suit on the ground that a pending state-court suit

also raised the issue of the arbitrability of the dispute between

the parties. This Court held that the stay order was an appeal-

able “final decision” because it put the defendant “ ‘effec-

tively out of court’” and was therefore tantamount to

dismissal. Moses H. Cone, 460 U.S. at 10, quoting /dlewild

Bon Voyage Liquor Corp. v. Epstein, 370 U.S. 713, 715 n.2

(1962). The availability of the state court to adjudicate the

arbitrability issue did not impair the finality of the stay order.

As the Court explained, “a stay of the federal suit pending

resolution of the state suit meant that there would be no fur-

ther litigation in the federal forum; the state court’s judgment

on the issue would be res judicata.” Jd. at 10. In other words,

“ ‘effectively out of court’ means effectively out of federal

court—in keeping with the fact that the decision under appeal

is the refusal to exercise federal jurisdiction.” Jd. at 9 n.8

(emphasis in original).'*

The Court observed in Moses H. Cone that the finality of

the stay order there was “even clearer” than that of the Pull-

man stay order found to be final in /dlewild given the

prospect that a Pullman stay might be lifted should the plain-

tiff not obtain state-law relief in state court. 460 U.S. at 10.

The finality of the District Court’s remand here is clearer still.

This case, unlike Moses H. Cone, does not require the Court

to assess the practical effect of the District Court's order; by

definition, the function of a remand is “precisely to surrender

jurisdiction of a federal suit to a state court.” Jd. at 10-11

n.11. Allstate is not just “effectively” out of federal court; it

is expressly and literally so.

'¢ The Liquidator repeatedly, albeit cryptically, suggests that All-

state may be able to resort to federal court at some time in the future.

Pet'r Br. 18, 25, 26. He does not trouble, however, to identify the route

back to federal court he has in mind.

To avoid the holding of Moses H. Cone, the Liquidator

points to the earlier statement in Thermtron that

this Court has declared that because an order remanding

a removed action does not represent a final judgment

reviewable by appeal, “[t]he remedy in such a case is by

mandamus to compel action, and not by writ of error to

review what has been done.”

Thermtron, 423 U.S. at 353, quoting Railroad Co. v. Wiswail,

23 Wall. (90 U.S.) 507, 508 (1875). In effect, the Liquidator

argues that by a single sentence in Thermtron, this Court

intended to carve out an exception from the most basic prin-

ciples of § 1291 finality for remand orders not subject to the

bar of § 1447(d).

The Thermtron sentence cannot bear that weight. To be

sure, Thermtron’s assumption that the remand order there was

not final, and hence not appealable, was necessary to the

Court’s conclusion that mandamus was the proper remedy in

that case. But whether the District Court's order in Thermtron

was reviewed by mandamus or appeal, the ultimate result

would have been the same: the remand order would have been

set aside and the District Court would have been directed to

proceed with the case. Thus, the statement is effectively dic-

tum in the sense that it did not affect the substantive outcome

of the case. The statement is not supported by any articulated

reasons and was made without the benefit of briefing or argu-

ment by the parties.'°

3 Apart from the one sentence quoting Wiswall, the entire dis-

cussion of remedy in Thermtron concerns the undoubted availability of

mandamus in the circumstances of the case. 423 U.S. at 352-53. Neither

party in Thermtron suggested that the District Court's remand order

might be a final order reviewable by appeal under 28 U.S.C. § 1291: the

petitioners argued only that mandamus was an appropriate remedy for the

refusal of the District Court to proceed, see Thermtron Pet'r Br. (No. 74-

206) 17-18, while the respondent argued that § 1447(d) barred al! forms

of review, see Thermtron Resp. Br. 4. See also Tr. Thermtron Oral Arg.

Nor was the issue considered in Cohill. See 484 U.S. at 347-48 & n.4;

Cohill Pet'r Brief (No. 86-1021); Cohill Resp. Br.; Tr. Cohill Oral Arg.

Rather, the Thermtron statement rests entirely on the

Wiswall case, a three-sentence opinion from 1875 that is

wholly inconsistent with modern notions of finality. Wiswall

dismissed, “upon the authority of Jnsurance Company v. Com-

stock,” a writ of error to review a remand order on the

grounds that the order was “not a ‘final judgment’ in the

action but a refusal to hear and decide.” Wiswall, 23 Wall. at

508, citing /Jnsurance Co. v. Comstock, 16 Wall. (83 U.S.) 258

(1872). In Comstock, this Court held that the Circuit Court's

dismissal of a case (itself a writ of error to the District Court)

for lack of jurisdiction was a refusal to proceed and therefore

reviewable by mandamus, not writ of error. /d. at 270-271.

As Comstock and the other cases cited in Wiswall make

clear,'® that case does not reflect a distinction between

remands, on the one hand, and dismissals or other orders, on

the other, but a broader rule about the respective functions of

mandamus and error or appeal. These cases form part of a

long line of 19th-century precedents in which mandamus was

held the appropriate remedy where a lower court had dis-

missed a case at the outset of proceedings for lack of juris-

diction or had otherwise refused to proceed. See In re

Pennsylvania Co., 137 U.S. 451, 452-453 (1890) (collecting

and explaining cases); Ex parte Russell, 13 Wall. (80 U.S.)

664, 670 (1871); P. Phillips, The Statutory Jurisdiction and

Practice of the Supreme Court of the United States 276 (2d

ed. 1872).'’ These decisions did not make review of this cat-

'© Each of the cases cited in the margin to Wiswall, 23 Wall. at 508

n.t, also supports the notion that mandamus was the proper remedy to

correct an erroneous dismissal. Ex parte Bradstreet, 7 Pet. (32 U.S.) 634,

647-650 (1833) (granting mandamus to correct District Court's erroneous

dismissal of action for lack of subject-matter jurisdiction); Ex parte New-

man, 14 Wall. (81 U.S.) 152, 165 (1872) (stating in dictum that man-

damus lies where lower court “refuses to hear and decide the

controversy”); The King v. Justices of Gloucestershire, 1 B. & A. 1, 109

Eng. Rep. 688 (K.B. 1830) (issuing mandamus to correct erroneous dis-

missal of appeal).

17 See. e.g.. Parker, petitioner, 131 U.S. 221 (1889) (mandamus

reversing dismissal of appeal for lack of jurisdiction), Ex parte Parker,

egory of decisions less accessible, but simply required use of

the correct writ: mandamus for a “refusal to hear and decide,”

error or appeal for a “final judgment.”'* If the lower court had

jurisdiction but decided not to proceed, mandamus issued as

a matter of course.'®

“It should be apparent that th[ese] antique decision[s] pro-

vide[ } little basis for determining what finality rules should

120 U.S. 737 (1887) (same); Harrington v. Haller, 111 U.S. 796 (1884)

(similar to Comstock, relying on Wiswall and Comstock), Ex parte Schol-

lenberger, 96 U.S. 369 (1878) (mandamus reversing order quashing ser-

vice for lack of personal jurisdiction); Ex parte Russell, 13 Wall. at

669-670 (mandamus reversing dismissal, for lack of subject-matter juris-

diction, of motion for new trial); Ex parte Bradstreet, 7 Pet. at 647-650.

‘8 See Wiswall, 23 Wall. at 508 (because remand order was “refusal

to hear and decide” rather than “final judgment,” remedy was “by man-

damus to compel action, and not by writ of error to review what has been

done”); Ex parte Russell, 13 Wall. at 670 (“Where a court declines to

hear a case or motion, alleging its own incompetency to do so, or that of

the party to be heard, mandamus is the proper remedy. A writ of error or

appeal does not lie; for what has the appellate court to review where the

inferior court has not decided the case, but has refused to hear it?”);

Comstock, 16 Wall. at 270 (mandamus, not error, was correct remedy

because Circuit Court never “passed upon the questions as to the cor-

rectness or incorrectness of the rulings of the District Court”); id. at 271

(“Mandamus being the proper remedy, error will not lie”); Phillips,

above, at 276 (quoting Ex parte Russell); see also Edson R. Sunderland,

The Problem of Appellate Review, 5 Tex. L. Rev. 126, 129-130 (1927)

(likening error, certiorari, mandamus, prohibition and appeal to common-

law forms of action).

19 See cases cited in note 17, above. In Comstock. the Court had

held that “every party” has a “right” to the judgment of the lower court,

that this Court “in such case will issue” mandamus “in a case where the

subordinate court had improperly dismissed the case,” and that the party

there “would be entitled” to a remedy if it had asked for the proper writ.

16 Wall. at 270 (emphasis added); see also Phillips, above, at 270 (“well

settled” that mandamus “is nothing more than the ordinary process of a

court of justice, to which every one is entitled, where it is the appropriate

process for asserting the right he claims,” quoting Kentucky v. Dennison,

24 How. (65 U.S.) 66, 97 (1860)).

be developed today.” ISA Charles A. Wright, Arthur R. Miller

& Edward H. Cooper, Federal Practice and Procedure

§ 3914.11 at 701 n.13 (2d ed. 1992) (referring to Comstock as

foundation for Wiswall). Under modern practice, a dismissal

of a case at the pleading stage, even if it “amounts to a refusal

to adjudicate the merits,” is final and appealable. Moses H.

Cone, 460 U.S. at 12; see also, e.g., NOPSI, 491 U.S. at 358;

Rosenberg Bros., 260 U.S. at 517. The District Court's

“refusal to hear and decide” this case, Wiswall, 23 Wall. at

508, should be no less appealable simply because the Court

chose to effect it by way of remand rather than dismissal.”°

Wiswall cannot survive Moses H. Cone and the modern prin-

ciples of finality it represents.*'

In short, there is no reason for this Court to follow super-

seded precedent based on “historical distinctions” that

“produce[ ] arb.trary and anomalous results.” Gulfstream

Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 285

(1988); see id. at 279-88 (repudiating Enelow-Ettelson inter-

pretation of 28 U.S.C. § 1292(a)(1)). Congress has created no

exception to § 1291 for reviewable remand orders, and this

Court should not do so.

20 See Corcoran v. Ardra Insurance Co., 842 F.2d 31, 34-35 (2d

Cir. 1988) (“Under the surrender-of-federal-jurisdiction test used in

Moses Cone, we wonder whether it can logically or prudently remain the

rule that a reviewable remand order . . . is not reviewable by direct

appeal”).

at Given the Comstock/Wiswall function of mandamus, the appli-

cation of Wiswall to reviewable remand orders today would require the

Court to make clear that the writ readily issues whenever a district court

improperly abstains. See Thermtron, 423 U.S. at 353 (“There is nothing

in our later cases dealing with the extraordinary writs that leads us to

question the availability of mandamus in circumstances where the district

court has refused to adjudicate a case, and has remanded it on grounds

not authorized by the removal statutes.”). There is simply no reason,

however, to permit 19th-century writ practice to interfere in that fashion

with the normal application of § 1291.

B. Even If the District Court’s Remand Order Were Not

Final in the Usual Sense, It Would Be Appealable as a

Final Collateral Order.

Even were Thermtron read to preclude treating the District

Court’s remand order as a “final judgment,” 423 U.S. at 352-

53, the collateral-order doctrine of Cohen v. Beneficial Indus-

trial Loan Corp., 337 U.S. 541 (1949), would provide a

separate and independent basis for treating the District

Court's remand order as final under § 1291. In Cohen, this

Court “carved out a narrow exception to the normal applica-

tion of the final judgment rule, which. . . considers as ‘final

judgments,’” certain decisions “even though they do not ‘end

the litigation on the merits,’ Midland Asphalt Corp. v. United

States, 489 U.S. 794, 798-99 (1989), quoting Cohen, 337 U.S.

at 546. To qualify as a “final collateral order,” an order must

(1) “conclusively determine the disputed question,”

(2) “resolve an important issue completely separate from

the merits of the action,” and (3) “be effectively unre-

viewable on appeal from a final judgment.”

Id. at 799, quoting Coopers & Lybrand v. Livesay, 437 U.S.

463, 468 (1978). The collateral order doctrine counsels the

Courts of Appeals to give § 1291 a “‘practical construction.’”

Digital Equipment Corp. v. Desktop Direct, Inc., 114 S. Ct.

1992, 1995 (1994), quoting Cohen, 337 U.S. at 546.

In Moses H. Cone, this Court held alternatively that the

abstention-based stay order there was also final under the

Cohen doctrine. 460 U.S. at 11-13. As the Court of Appeals

held here, the District Court’s order applying the Burford doc-

trine to remand this case to state court easily meets the Cohen

three-part test. 47 F.3d at 353-54, Pet. App. 4a-8a.”

22“ See also Karl Koch Erecting Co. v. N.Y. Convention Ctr. Devel-

opment Corp., 838 F.2d 656, 658-59 (2nd Cir. 1988) (remand on forum-

selection clause grounds appealable); Foster v. Chesapeake Ins. Co., 933

F.2d 1207, 1211 (3rd Cir. 1993) (same); McDermott Int'l, Inc. v. Lloyd's

Underwriters of London, 944 F.2d 1199, 1201-04 (Sth Cir. 1991) (same);

The Moses H. Cone decision demonstrates why. First, in

concluding there that the stay order conclusively determined

the disputed question of Colorado River abstention, this Court

held that the technical possibility that “every order short of a

final decree is subject to reopening at the discretion of the

district judge” did not deprive the stay order of finality. 460

U.S. at 12. Here, even that technical possibility is absent,

because the District Court has completely removed the case

from its control by remanding it to the state court. See 47 F.3d

at 353, Pet. App. 6a.

Second, as the Court held in Moses H. Cone, “|ajn order

that amounts to a refusal to adjudicate the merits plainly pre-

sents an important issue separate from the merits.” 460 U.S.

at 12. The remand order here, even more than the stay order

in Moses H. Cone, is not a “step toward final judgment,” but

a refusal of the federal court to proceed at all. /d. at 12 n.13;,

see 47 F.3d at 353, Pet. App. 6a-7a.

Finally, there can also be no dispute that the District

Court's remand order would be effectively unreviewable on

appeal from a final judgment. Moses H. Cone, 460 US. at 12;

Pet. App. 7a. Section 1291 concerns itself, of course, with

appeals to the federal Courts of Appeal. The Court of Appeals

here would have been powerless to review the remand order

as part of a final judgment, for the simple reason that any

final judgment would be rendered by a California state court.

For that reason, the case does not raise any concern “that

appellate review now” might “force the appellate court to

consider approximately the same .. . matter more than

once,” Johnson v. Jones, 115 S. Ct. 2151, 2155 (1995)

(emphasis in original). Appellate review of the abstention

decision must occur now or not at all.

Regis Associates v. Rank Hotels (Management) Lid., 894 F.2d 193, 194-

95 (6th Cir. 1990) (same); Pelleport Investors v. Budco Quality Theatres,

741 F.2d 273, 277-78 (9th Cir. 1984) (same); Milk 'N’ More, Inc. v.

Beavert, 963 F.2d 1342, 1344-45 (10th Cir. 1992) (same).

To avoid the application of the collateral order doctrine, the

Liquidator makes three arguments. First, the Liquidator

argues that the District Court's remand order was not suffi-

ciently conclusive because it did not resolve the issues of

arbitrability and setoff. Pet’r Br. 17, 23, 24-25. For purposes

of the Cohen doctrine, however, it matters not that the District

Court did not resolve other issues, such as arbitrability and

setoff, so long as the order sought to be appealed reflects a

“conclusive determination” on the matter it did decide—that

is, Burford abstention.”*

Second, the Liquidator suggests that Allstate's right to a

federal forum to hear this case is not sufficiently “important”

to qualify as a final collateral order. Pet’r Br. 29. But even

assuming that “importance” states an independent require-

ment of the Cohen doctrine, but see Digital Equipment, 114 S.

a To support his argument that the remand order did not conclu-

sively resolve the relevant questions, ‘he Liquidator relies on the Second

Circuit decision in Corcoran v. Ardra Ins. Co. 842 F.2d 31, 35 (2d Cir.

1988), which held that a remand order based on Burford abstention was

not conclusive where the District Court had left unresolved the appel-

lant’s motion to compel arbitration, and the First Circuit decision in

Doughty v. Underwriters at Lloyd's, London, 6 F.3d 856, 862-64 (1st Cir.

1993), which followed Corcoran. But the reasoning of those two cases

is flatly inconsistent with the holding of Moses H. Cone. There, the very

proceeding in which the District Court had abstained was a petition to

compel arbitration pursuant to § 4 of the Federal Arbitration Act. This

Court expressly held that the stay order “conclusively determined” the

issue sought to be appealed, which was not whether a court or an arbi-

trator would decide the contract dispute, but whether the state or the fed-

eral court would decide the arbitrability dispute. 460 U.S. at 12-13. Here

too, the issue on which Allstate sought appeal below was whether the

state or federal court would decide Allstate's motion to compel arbitra-

tion and, if necessary, the underlying liability issues. See McDermott, 944

F.2d at 1203 n.5 (“Corcoran is wrongly decided”); Travelers Ins. Co. v.

Keeling, 996 F.2d 1485, 1489 (2d Cir. 1993) (“Perhaps it would have

been possible in Corcoran to bring the remand ruling within the Cohen

doctrine by considering the district court to have conclusively determined

the threshold issue of which court (state or federal) would decide arbi-

trability”).

Ct. at 2001, a decision by a District Court to depart from its

“virtually unflagging” obligation to exercise its jurisdiction

implicates sufficiently important federal rights to satisfy any

such requirement, see id. at 2001-2003. Because the right

Allstate asserts was conferred by Congress, see 28 U.S.C.

§§ 1332, 1441, there is “little room for the judiciary to gain-

Say its ‘importance.’ ” /d. at 2001.

Third, the Liquidator argues that the rule mandated by

Moses H. Cone permits the “ ‘narrow exception’ ” of Cohen to

“ “swallow the general rule’” because “remands . . . rou-

tinely occur.” Pet’r Br. 24. The Liquidator misses the point.

Limiting the types of orders that qualify as final collateral

orders cannot be a goal in itself; the Cohen criteria them-

selves are designed to serve that function. Regardless of the

frequency with which abstention-based remands occur, Moses

H. Cone makes clear that a District Court’s refusal on absten-

tion grounds to adjudicate a matter within its jurisdiction

finally determines an important federal right so as to qualify

for appeal as a final collateral order.

THE EXTRAORDINARY CIRCUMSTANCES

JUSTIFYING BURFORD ABSTENTION CANNOT

ARISE IN AN ACTION AT LAW ON A CONTRACT.

Within constitutional bounds, Congress has sole authority

to define the jurisdiction of the federal courts. New Orleans

Public Service Inc. v. Council of the City of New Orleans

(“NOPSI”), 491 U.S. 350, 359 (1989); Kline v. Burke Con-

struction Co., 260 U.S. 226, 234 (1922). Congress has given

defendants in Allstate’s position a statutory right to remove

a case to United States District Court. 28 U.S.C. §§ 1332,

1441. From earliest days, this Court has emphatically stated

that “federal courts lack the authority to abstain from the

exercise of jurisdiction that has been conferred.” NOPSI, 491

U.S. at 358; see, e.g., Cohens v. Virginia, 6 Wheat. (19 U.S.)

264, 404 (1821) (Marshall, C.J.) (“to decline the exercise of

jurisdiction [or] usurp that which is not given. . . . would be

treason to the constitution”).

While the Court has recognized that the federal courts’

obligation to exercise their jurisdiction does not “eliminate

[their] discretion in determining whether to grant certain

types of relief” insofar as such discretion “was part of the

common-law background against which the statutes confer-

ring jurisdiction were enacted,” NOPS/, 491 U.S. at 359, cit-

ing David L. Shapiro, Jurisdiction and Discretion, 60 N.Y.U.

L. Rev. 543, 570-77 (1985), it has simultaneously cautioned

that that discretion is an “‘extraordinary ard narrow exception

to the duty of a District Court to adjudicate a controversy

properly before it.’” Colorado River Water Conservation Dist.

v. United States, 424 U.S. 800, 813 (1976), quoting County of

Allegheny v. Frank Mashuda Co., 360 U.S. 185, 188-189

(1959). Accordingly, the Court “ha[s] carefully defined. . .

the areas in which such ‘abstention’ is permissible, and it

remains * “the exception, not the rule.” ” NOPS/, 419 U.S. at

359, quoting Hawaii Housing Auth. v. Midkiff, 467 U.S. 229,

236 (1984), quoting Colorado River, 424 U.S. at 813. In the

absence of the “carefully defined” circumstances that might

justify the exercise of discretion not to decide a given con-

troversy, federal courts must remain faithful to their “virtually

unflagging obligation. . . to exercise the jurisdiction given

them.” Colorado River, 424 U.S. at 817.

The Liquidator’s action for money damages on a series of

contracts between Allstate and Mission presents no circum-

stance that might have justified the District Court’s decision

not to decide Allstate’s motion to compel arbitration under the

Federal Arbitration Act, 9 U.S.C. §§ 3-4, or, were that motion

denied, the underlying liability disputes. The Court of

Appeals correctly held that the District Court had no discre-

tion to abstain under the principles of Burford v. Sun Oil Co.,

319 U.S. 315 (1943), and therefore properly reversed the Dis-

trict Court’s order of remand.

A. The Burford Doctrine Applies Only to Actions

Seeking to Review State Administrative Proceedings

Where Such Review Would Interfere with State

Policymaking Processes On Matters of Distinctively

Local Concern.

The Court of Appeals’ holding that the District Court had

no discretion to decline to go forward with the action rests on

a limitation that inheres in the very purpose and justification

of the Burford doctrine. 47 F.3d at 354-56, Pet. App. 8a-1 2a.

In Burford, an oil company sued in United States District

Court to enjoin enforcement of an order of the Texas Railroad

Commission granting an oil-drilling permit to one of the com-

pany’s competitors. 319 U.S. at 317 & n. 1. This Court held

that “as a matter of sound equitable discretion,” the District

Court should “stay its hand.” /d. at 318, 334.

The Court relied on two features of the Texas regulatory

scheme at issue. First, given the local geological realities, the

grant of any one permit directly affected every other present

Or prospective permitholder, so that each case had to be

treated “as ‘one more item in a continuous series of adjust-

ments,’” id. at 332; see id. at 318-25 & nn.15-18. Second,

Texas had entrusted the Commission with “broad discretion”

in fulfilling its mandate to prevent waste in the Texas oil

fields, and had concentrated direct review of the Commis-

sion’s orders in a single county so that the state courts there

exercised “judicial supervision of Railroad Commission

orders,” acquired “specialized knowledge,” and became

“working partners with the Railroad Commission in the busi-

ness of creating a regulatory system for the oil industry.” /d.

at 326-27. The Court rested its decision squarely on the dis-

cretion of a “federal equity court” to “decline to exercise its

jurisdiction” when judicial restraint was “required by con-

siderations of general welfare.” /d. at 334, 333 n.29; see

NOPSI, 491 U.S. at 360.

The Court came to the same result for the same reason in

Alabama Public Service Commission v. Southern Railway Co.,

341 U.S. 341 (1951), the only other case in which this Court

has authorized a federal court to abstain in reliance on the

Burford doctrine. In Southern Railway, this Court held that,

“*as a matter of sound equitable discretion,’” the federal court

should decline to review an Alabama Public Service Com-

mission order refusing a railroad company permission to dis-

continue certain passenger service within the state. /d. at 345,

quoting Burford, 319 U.S. at 318.

The Court stressed the same facts as in Burford. First, the

Commission's order had required a balancing between the

costs to the railroad company and the need for the local ser-

vice. Southern Railway, 341 U.S. at 345-48. Second, the

Alabama scheme concentrated review of the Commission's

orders in a single county; appeals to the state court were

“supervisory in character,’” id. at 348 (citation omitted); and

the court's review of the “administrative order [was] based

upon predominantly local factors.” /d. at 349. As in Burford,

the Court stressed that, in declining to grant the injunction,

the federal court would not be abdicating its responsibility to

exercise its jurisdiction, but instead exercising the discretion

of “a federal court of equity” to “stay its hand in the public

interest when. . . private interests will not suffer. . . .” /d.

at 350-51; see NOPSI, 491 U.S. at 360-61.

In Lumbermen’s Mutual Casualty Co. v. Elbert, 348 U.S. 48

(1954), this Court confirmed the foundation of the Burford

doctrine in the exercise of equitable discretion to avoid inter-

ference with state policymaking processes. There, a plaintiff

in a tort action brought an action for money damages against

the alleged tortfeasor’s insurer under Louisiana's direct action

statute. The Court easily rejected an argument based on the

Burford doctrine that the case presented grounds for a “dis-

cretionary refusal to exercise jurisdiction” because of dif-

fering standards of review of jury verdicts in state and federal

courts, pointing out that

in Burford, jurisdiction was declined to avoid a potential

for conflict with a state’s policy-making process, a con-

sideration not present here. Moreover, traditional equi-

table authority, not available here, was relied upon to

justify the holding.

348 US. at 53.

Most recently, in NOPS/, the Court held that the Burford

doctrine did not bar a suit in which a public utility sought to

enjoin on federal preemption grounds the enforcement of the

utility rate order of a local regulatory body. The Court first

summarized the Burford doctrine:

Where timely and adequate state-court review is avail-

able, a federal court sitting in equity must decline to

interfere with the proceedings or orders of state admin-

istrative agencies: (1) when there are “difficult questions

of state law bearing on policy problems of substantial

public import whose importance transcends the result in

the case then at bar”; or (2) where the “exercise of fed-

eral review of the question in a case and in similar cases

would be disruptive of state efforts to establish a coher-

ent policy with respect to a matter of substantial public

concern.”

491 U.S. at 361, quoting Colorado River, 424 U.S. at 814.

Applying the doctrine, the Court held that, notwithstanding

the availability of state-court review of the order, the District

Court had erred by refusing to hear the utility’s claim. The

Court explained:

While Burford is concerned with protecting complex

state administrative processes from federal interference,

it does not require abstention whenever there exists such

a process, or even in all cases where there is a ‘potential

for conflict’ with state regulatory law or policy.

Id. at 362, quoting Colorado River, 424 U.S. at 815-816.

Where federal adjudication of the claim “would not disrupt the

State's attempt to ensure uniformity in the treatment of an

‘essentially local problem,’ ” id., quoting Alabama Pub. Serv.

Comm'n, 341 U.S. at 347, the resolution of which “demand{s]

significant familiarity with . . . distinctively local regulatory

facts or policies,” id. at 364, there could be no basis for Bur-

ford abstention.

These cases establish at least two essential predicates to

Burford abstention. First, the doctrine does not establish a

general discretion in a federal court to depart from its obli-

gation to decide cases whenever the court finds a sufficiently

weighty state interest involved. Instead, the court's authority

not to go forward is based on, and limited by, its discretion to

withhold particular types of relief in particular circumstances,

most importantly an equity court's discretion to withhold

injunctive relief when the public interest calls for restraint.

See, e.g., Weinberger v. Romero-Barcelo, 456 U.S. 305, 312-

313 (1982). Absent equitable discretion to withhold such

relief, there is no basis to apply the Burford doctrine.

Second, the Burford doctrine does not confer authority to

abstain in every case in which the plaintiff seeks equitable

relief from a state administrative order, but only in those rare

circumstances in which the request to restrain enforcement of

the order would require the federal court to displace the judg-

ment of a state court, equally available to entertain the federal

plaintiff's challenge, in an area that demands specialized

knowledge of a local problem and coordinated treatment of

interconnected cases. Absent a threat that federal injunctive

relief would override a state administrative determination on

a matter of peculiarly local concern, there is no basis to apply

the Burford doctrine.

1. The District Court Had No Discretion to Abstain

Because Allstate Sought No Injunctive Relief.

Allstate did not bring this lawsuit; the Liquidator did.

Allstate simply removed the case to federal court. See 28

U.S.C. §§ 1332, 1441. In removing, Allstate did not attempt

to restrain or interfere with the Liquidator's performance of

his duties in any way, let alone seek review of an order of the

Liquidator in any administrative capacity. Nor will Allstate's

defense of the action restrain the Liquidator in any way. All-

state intends simply to pursue its motion to compel arbitration

under the Federal Arbitration Act, 9 U.S.C. §§ 2-4, and to

pursue such defenses as are just and well-founded. The only

effect on the Liquidator of Allstate's assertion of its federal

right to remove the case is that a federal court, rather than the

state court in which the Liquidator originally filed the suit,

will adjudicate the motion to compel arbitration and, if nec-

essary, the Liquidator’s contract claims.

Thus, as the Court of Appeals held, the relief Allstate seeks

in defending the action—either a stay of the litigation so that

arbitration might be had or, failing that, setoff or denial of the

Liquidator’s contract claims on the merits—is alone dispos-

itive of the District Court's discretion to abstain on Burford

grounds. Because Allstate, the defendant here, seeks no

injunctive or other equitable relief to review or restrain the

conduct of an administrative agency on a matter of peculiarly

local concern, the District Court had no equitable discretion

to exercise in determining whether to go forward. See NOPSI,

491 U.S. at 360-62.** In other words, by definition, a funda-

4 See also Fragoso v. Lopez, 991 F.2d 878, 882 & n.6 (Ist Cir.

1993); Tribune Co. v. Abiola, 66 F.3d 12, 15-17 (2d Cir. 1995); Univer-

sity of Md. v. Peat Marwick Main & Co., 923 F.2d 265, 271-272 (3d Cir.

1991); Todd v. DSN Dealer Service Network, Inc., 861 F. Supp. 1531,

1541 (D. Kan. 1994); Costle v. Fremont Indem. Co., 839 F. Supp. 265,

270 (D. Vt. 1993); Duane v. Government Employees Ins. Co., 784 F.

Supp. 1209, 1223 (D. Md. 1992), aff'd, 37 F.3d 1036 (4th Cir. 1994),

cert. granted, 115 §. Ct. 1251, cert. dismissed, 115 S$. Ct. 2272 (1995).

mental requirement of the Burford doctrine cannot be met in

a contract action for money damages brought against a private

citizen.”

By making clear that the Burford doctrine is available only

to federal courts that are “sitting in equity” and therefore

must “determin{e] whether to grant certain types of relief,”

NOPSI, 491 U.S. at 359, this Court has not revived some anti-

quated distinction between legal and equitable forms of plead-

ing. See Pet'r Br. 19-21, 31-40. To the contrary, given that

“federal courts lack any discretion to abstain from the exer-

cise of jurisdiction that has been conferred,” NOPS/, 491 U.S.

at 358, the Court has simply instructed that a district court

must ground any decision not to entertain a claim in an iden-

tifiable source of authority to withhold relief.*°

a Nor does the Liquidator’s inclusion of a claim for declaratory

relief in his complaint confer any discretion on the District Court. Unlike

the situation in Wilton v. Seven Falls Corp., 115 S. Ct. 2137 (1995), in

which the defendant in a damages action had inverted the normal posture

of the parties by filing a separate action seeking a declaration of nonli-

ability, id. at 2139, the Liquidator’s request for a declaration of liability

simply recasts his request for damages in a different form. J.A. 51-53.

The discretion that the Declaratory Judgment Act, 28 U.S.C. § 2201,

gives a district court to withhold declaratory relief in appropriate cir-

cumstances, see 115 S. Ct. at 2143, surely does not authorize the court to

accede to a declaratory judgment plaintiff's request that the defendant not

be permitted to remove the action—including the claims at law for con-

tractual damages—to federal court. See id. (request for declaratory judg-

ment as exception to “the normal principle that federal courts should

adjudicate claims within their jurisdiction”). The Liquidator's contention

that a declaratory judgment action is always considered “equitable” is thus

irrelevant, in any event, he has waived the argument, see J.A. 171, which

is plainly wrong under both federal and California law, see J.A. 172-175.

26‘ The Liquidator’s discussion of the formal merger of law and

equity in the Federal Rules of Civil Procedure, Pet'r Br. 33-34, is there-

fore irrelevant. Those Rules are procedural only and have no effect on

substantive law. See 28 U.S.C. § 2072(b) (federal rules “shall not abridge.

enlarge or modify any substantive right”), Stainback v. Mo Hock Ke Lok

Po, 336 U.S. 368, 382 n. 26 (1949). For the same reason, the Liquidator

misses the point when he argues that a court that abstains should always

For that reason, the Liquidator undertakes a meaningless

task when he seeks support in several decisions of this Court

in which, he contends, the Court approved “abstention” in

actions at law. Pet'r Br. 35-40. None of these decisions pro-

vides the Liquidator any support.

The Liquidator first points to three cases applying the Pull-

man doctrine: Fornaris v. Ridge Tool Co., 400 U.S. 41 (1970)

(per curiam) (approving Pullman deferral without discussing

nature of action or relief sought); United Gas Pipe Line Co.

v. Ideal Cement Co., 369 U.S. 134 (1962) (per curiam)

(same); and Clay v. Sun Ins. Office, 363 U.S. 207 (1960) (sug-

gesting certification of question to state supreme court based

on Pullman-like reasoning). Under that doctrine, a district

court may defer consideration of a federal constitutional chal-

lenge to a State statute in order to give the state courts an

opportunity to give the statute a saving construction. See Rail-

road Comm'n v. Pullman 312 U.S. 496 (1941); Growe v. Emi-

son, 113 S.Ct 1075, 1080 n.1 (1993) (Pullman doctrine calls

for “deferral,” not “abstention”). The accomplishment of that

objective, unlike the Burford objective of avoiding interfer-

ence with administrative proceedings, does not depend on the

nature of the relief sought in the action in which the consti-

tutional issue arises. The absence of a request for equitable

relief is therefore not relevant to the scope of the Pullman

doctrine.

Similarly, in authorizing Pullman-like deferral in Louisiana

Power & Light Co. v. City of Thibodaux, 360 U.S. 25, 28-31

(1959) (citing Pullman but not Burford), this Court simply

recognized that principles of restraint prevailing in “con-

ventional equity suits” also applied in the context of an emi-

nent domain proceeding where necessary to allow the

Louisiana courts to settle the question whether the city that

be regarded as exercising its equitable jurisdiction in doing so. Pet'r Br.

40-42. The authority to abstain turns not on a label arbitrarily placed

upon that authority but on the relief in response to which the authority is

exercised.

had exercised eminent domain authority actually had such

authority under Louisiana law.”’ So too, in Fair Assessment in

Real Estate Association v. McNary, 454 U.S. 100, 111 (1981),

the Court held only that the longstanding principle of comity

that had “led federal courts of equity to refuse to enjoin the

collection of state taxes” and “require(d] a like restraint in the

use of the declaratory judgment procedure” also barred a suit

for damages under 42 U.S.C. § 1983 based on a claim that the

State's administration of its tax system was unconstitutional.

The McNary Court's extension of the principle against enjoin-

ing state tax collection to a § 1983 damages action was

expressly based on its conclusion that in order to award dam-

ages, the district court would effectively have to make a

“ ‘declaration’ ” of unconstitutionality that “would halt the

administration of the state tax system” and “would be fully as

intrusive” as the injunctive or declaratory relief barred under

2 The Court emphasized that an eminent domain proceeding.

while technically legal, was both “special and peculiar” and “intimately

involvec with sovereign prerogative.” 360 U.S. at 28. The basis—and

limited scope—of Thibodaux is made clear by this Court's reversal, on

the same day and on virtually identical facts, of an abstention order in a

case in which the county's power of eminent domain was clear under

state law. See County of Allegheny v. Frank Mashuda Co., 360 U.S. 185,

188-197 (1959).

In dictum in Ankenbrandt v. Richards, 504 U.S. 689, 705-706 & n.&

(1992), the Court speculated that it was “not inconceivable” that a fed-

eral court might stay a case before it to allow a state court to rule on a

question of state law, the “public import” of which “transcend{ed] the

case at bar,” if the relief sought by the federal! plaintiff required the court

to rule as if issuing a divorce, alimony, or child custody decree. The

Ankenbrandt Court's speculation about deferring on an issue relating to

the status of a domestic relationship provides no support for the sug-

gestion that Burford might apply to this contract action. Pet'r Br. 38-39

The Ankenbrandt dictum cautioned only against invading the realm of

divorce, alimony, and child custody decrees, each of which involves a

court's equitable powers and, as the Ankenbrand: Court itself held, falls

outside diversity jurisdiction. /d. at 693-704. And, of course, Anken-

brandt held that Burford abstention was inappropriate in the tort action

before it.

the principles of comity applicable to constitutional attacks on

state tax systems. /d. at 115, 113; see id. at 107-117.

The Liquidator also cites Langnes v. Green, 282 U.S. 531,

541-544 (1931), which was not at law but in admiralty. In

ordering the dissolution of an antisuit injunction in order to

allow a common-law claim to go forward in state court, the

Court expressly rested on the discretionary powers of an

admiralty court in a limitation-of-liability proceeding, which

is akin to a proceeding in equity to distribute a limited fund.

See Grant Gilmore & Charles L. Black, Jr., The Law of Admi-

ralty §§ 10-8, 10-17 to 10-19 (2d ed. 1975).

Finally, Congress's decision in the McCarran-Ferguson Act,

15 U.S.C. §§ 1011-1015, to allow states to regulate the busi-

ness of insurance, see Pet'r Br. 4, 45-47, provides no grounds

to apply Burford. As NOPSI makes clear, the mere presence

of state regulatory interests provides no grounds to abstain.

491 U.S. at 362; see Grode v. Mutual Fire, Marine & Inland

Ins. Co., 8 F.3d 953, 960 (3d Cir. 1993).**

“ Contrary to the Liquidator's suggestion, Pet'r Br. 47 n.87, the

reference to the McCarran Amendment, 43 U.S.C. § 666, in Colorado

River does not support reliance on the McCarran-Ferguson Act here. The

McCarran Amendment, which gave the consent of the United States to be

sued in state court where certain water rights were in issue, was designed

specifically to promote unified adjudication of water rights. Colorado

River, 424 U.S. at 819. The McCarran-Ferguson Act, by contrast, has

nothing at all to say about state-court jurisdiction, but only insulates cer-

tain state regulation of the business of insurance from federal preemption.

15 U.S.C. §§ 1011-1015.

As the District Court concluded, and the Liquidator has not since chal-

lenged, a Colorado River stay is unavailable here because there is no

concurrent litigation. Pet. App. 22a-23a. The Liquidator’s claims against

Allstate are not pending in the state court, and Allstate's potential defense

of setoff under Cal. Ins. Code § 1031 is a statutory right independent of

its primary contract claims in the liquidation proceeding.

The Liquidator has not suggested here or in the courts below that

the antipreemption provision of the McCarran-Ferguson Act, 15 U.S.C.

§ 1012(b), might apply of its own force to bar Allstate's removal. Nor

could he: the California Insurance Code does not purport to bar the lit-

igation of the Liquidator’s claims in federai court, see Part I1.B.1, below;

In short, none of the authorities on which the Liquidator

relies to establish that some species of “abstention” might be

available in an action at law provides any support for the Dis-

trict Court's decision here that the Burford doctrine afforded

discretion to refrais trom deciding a contract action for

money damages that the defendant had properly removed.*’

and in any event, § 1012(b) would not protect a law purporting to dis-

place diversity jurisdiction because, among other things, such a law

would be “logically and temporally unconnected to the transfer of risk”

under an insurance policy and therefore would not regulate the “business

of insurance.” United Labor Life Ins. Co. v. Pireno, 458 U.S. 119, 130

(1982), see also United States Dep't of Treasury v. Fabe, 113 S. Ct. 2202,

2209 (1993). In enacting the McCarran-Ferguson Act to protect state laws

regulating insurance from preemption, Congress did not intend to deprive

the federal courts of jurisdiction to apply those laws.

29 To the extent that the Liquidator's amici curiae The Council of

State Governments and others intend to suggest that the District Court

should have abstained on the authority of Thibodaux or McNary (Br. for

Amici Council of State Gov'ts et al. 10-14), this Court should not enter-

tain the suggestion. The Liquidator did not rely upon the analysis or hold-

ing of either case in either the District Court or the Court of Appeals, and

he should not be permitted to urge a new ground here. See, e.g., Taylor

v. Freeland & Kronz, 503 U.S. 638, 646 (1992).

In any event, neither Thibodaux nor McNary would support abstention

in the circumstances here. First, there is no state-law issue remotely anal-

ogous to that which justified deferral of federal proceedings pending a

State-court determination of state law in Thibodaux. See Part I1.B.2,

below, see also Part II.C, below. Equally, there is no principle of comity

applicable to insolvency proceedings remotely analogous to that barring

constitutional attacks on the administration of state tax systems found

dispositive in McNary. See Part II.B.1, below. The caution Thibodaux and

McNary reflect about challenges in federal court to core aspects of state

sovereignty, such as eminent domain and taxation, has no application

here. While the states undoubtedly have an important interest in insur-

ance regulation, the administration of an insolvent’s estate, unlike the

power to tax or take property, is not central to its sovereign power. This

case also differs from Thibodaux and McNary in that the authority of the

Liquidator to act as receiver of Mission, and the validity of the state

statutes authorizing him to act in that capacity, are not in question. This

Court has warned against “concoct[ing] absention doctrine[s} out of

whole cloth,” Ankenbrandt, 504 U.S. at 706 n.8, and there is no reason

to do so here.

2. The District Court Had No Discretion to Abstain

Because Allstate Did Not Seek to Interfere with

State Policymaking.

Allstate came to the District Court not to ask that it over-

ride an administrative determination made by the Insurance

Commissioner in his role as impartial regulator acting in the

public interest, but to defend itself against a commercial

claim initiated in a state court of general jurisdiction by the

Commissioner as Liquidator on behalf of private parties to

whom he owes a fiduciary’s duty of loyalty. Because the Liq-

uidator was not acting in a regulatory capacity, there could be

no prospect that Allstate's defense against the Liquidator’s

contract claims would interfere with state policymaking.

The character of the Liquidator’s activity here—and the

absence of circumstances giving rise to Burford’s concern for

protecting certain administrative proceedings—is reflected in

the nature of this action. To collect monies allegedly owed to

an insolvent insurer by a third paity, the Liquidator does not

conduct an administrative proceeding, but commences an

ordinary civil action. Kinder v. Superior Court (Market Ins.

Corp.), 78 Cal. App. 3d 574, 579, 144 Cal. Rptr. 291, 295

(1978); Maloney v. Rhode Island Ins. Co., 115 Cal. App. 2d

238, 249, 251 P.2d 1027, 1033-34 (1953); see Cal. Ins. Code

§ 1037(f).°° In that action, the Liquidator must prove facts and

make legal arguments like any other litigant.*' And the sub-

ject matter of such an action, which by the Liquidator’s own

30 - The Liquidator brought this suit against Allstate as an inde-

pendent action, and it bore a Superior Court docket number separate from

that of the liquidation proceedings. See J.A. 35 (Complaint). The under-

lying liquidation proceeding, a “special proceeding,” is also judicial, not

administrative. Cal. Ins. Code §§ 1011 et seq.; see also Cal. Code Civ.

Proc. §§ 22-23; Pet'r Br. 4.

m" The defendant in an action brought by the Liquidator is entitled

to all the protections of a plenary trial under California law, including the

right to trial by jury if the action is at law and to findings of fact and con-

clusions of law if the case is tried to the bench. Kinder, 78 Cal. App. 3d

at 581, 144 Cal. Rptr. at 296.

account might here have included claims against any one of

hundreds of domestic reinsurers, as well as foreign reinsurers

from at least 28 countries, Pet’r Br. 9-11 & n.25, 14 & n.33,

is certainly not “distinctively local.” NOPS/, 491 U.S. at 364.

Further, the Liquidator brings the action in pursuit of pri-

vate pecuniary interests. The California insurance insolvency

Statute expressly provides that “[i]n all proceedings under this

article, the commissioner shall be deemed to be a trustee for

the benefit of all creditors and other persons interested in the

estate” of the insolvent insurer. Cal. Ins. Code § 1057; see id.

§§ 1010-1062; Texas Commerce Bank—El Paso v. Garamendi,

28 Cal. App. 4th 1234, 1244, 34 Cal. Rptr. 2d 155, 161

(1994); see also Pet’r Br. 3, citing Anderson v. Great Repub-

lic Life Ins. Co., 41 Cal. App: 2d 181, 188, 106 P.2d 75, 79

(1940). The caption on the Liquidator’s papers confirms that

he brings this action “in His Capacity as Liquidator and

Trustee” of various trusts established in the stead of the insol-

vent Mission companies. Pet’r Br. 2 n.2. And the California

Court of Appeal has confirmed that “the commissioner is a

public official acting on behalf of the state when dealing with

insolvent insurers in general, but once appointed conservator

of a particular insolvent insurer, the commissioner steps into

the shoes of that insurer.” Texas Commerce Bank, 28 Cal.

App. 4th at 1245, 34 Cal. Rptr. 2d at 162.”

Regardless of the Liquidator’s status as fiduciary for pri-

vate interests, the Liquidator’s claim arises from a contract

+ Accord, e.g., Corcoran v. National Union Fire Insurance Co.,

143 A.D. 2d 309, 532 N.Y.S.2d 376, 378 (1988) (Superintendent of Insur-

ance acting as liquidator of insolvent insurance company “acts in a sep-

arate and distinct capacity from his role as regulator of the insurance

industry,” conducting insolvent’s operations “for the benefit of its cred-

itors and policyholders, as opposed to the benefit of the general public”);

Helvering v. Therrell, 303 U.S. 218, 225 (1938); Crawford v. Employers

Reins. Co., 896 F. Supp. 1101, 1102 (W.D. Okla. 1995); Eagle Life Ins.

Co. v. Hernandez, 743 S.W.2d 671, 672 (Tex. App. 1987); Matter of Kin-

ney (Miller), 257 A.D. 496, 501, 14 N.Y.S.2d 11, 16, aff'd, 281 N.Y. 840,

24 N.E.2d 494 (1939).

right belonging to Mission's estate, see Prudential Reins. Co.

v. Superior Court (Garamendi), 3 Cal. 4th 1118, 1136-37, 842

P.2d 48, 59, 14 Cal. Rptr. 2d 749, 760 (1992), and any

recovery on the Liquidator’s claim against Allstate will

accrue to the benefit of the liquidation estate and hence to

Mission's creditors.** The expenses of the liquidation, includ-

ing the salary of a deputy liquidator who may supervise liti-

gation and the fees of counsel who conduct it, are paid out of

the assets of the receivership estate. Cal. Ins. Code §§ 1033,

1035. Because he is pursuing private claims, the Liquidator is

treated as a private litigant. See Texas Commerce Bank, 28

Cal. App. 4th at 1245-46, 34 Cal. Rptr. 2d at 162."

3 The Liquidator’s suggestion, without citation to California

authority, that Mission's insolvency transformed its contracts into “reg-

ulatory agreements” with a state official, Pet'r Br. 49, is both irrelevant

and flatly contradicted by California law. See Prudential Reinsurance,

3 Cal. 4th at 1136-37, 842 P.2d at 60, 14 Cal. Rptr. 2d at 760 (rejecting

argument that insolvency transmuted reinsurance contracts into agree-

ments with regulator so as to defeat setoff rights).

- All fifty states have established statutory guarantee associations,

funded by the insurance industry, to protect policyholders from the effect

of insurance company insolvencies. See note 3, above. To the extent that

policyholder claims are covered by guarantee associations, recovery of

a claim by an insolvent insurance company benefits not its individual pol-

icyholders but the guarantee associations and the solvent insurance com-

panies that constitute their membership.

SI is plain that the Insurance Commissioner, as Liquidator and

Trustee pursuing the interests of the estate's creditors, could not simul-

taneously act as neutral regulator pursuing the general welfare of the peo-

ple of California. See Texas Commerce Bank, 28 Cal. App. 4th at 1244,

34 Cal. Rptr. 2d at 161 (liquidator owes estate's creditors “a duty of loy-

alty, which has been interpreted to mean that the trustee must adminis-

ter the trust solely in the interest of the beneficiary”) (emphasis added).

For example, a House subcommittee has concluded that the Liquidator

here, in effect, turned a blind eye to substantial evidence of fraud by for-

mer Mission management so as not to compromise his chances of recov-

ering against Mission's reinsurers. See Subcomm. on Oversight, supra

note 4, at 62-63, 74. Regardless of whether former Mission management

actually committed fraud or what conclusions the Liquidator reached on

The Burford doctrine provides a shield to protect state pol-

icymaking processes conducted by administrative agencies on

matters of local concern, not a sword to defeat diversity juris-

diction in private commercial litigation. Because Allstate's

defense of this action poses no risk of “interference with [Cal-

ifornia’s] administrative policy-making process,” Lumber-

men's Mutual, 348 U.S. at 53, the District Court had no

discretion to abstain. See NOPS/, 491 U.S. at 360-62; Tribune

Co. v. Abiola, 66 F.3d at 15-17; Fragoso v. Lopez, 991 F.2d at

882 & n.6.

B. Neither of the Interests the Liquidator Asserts Here

May Defeat Allstate’s Right to Invoke the District

Court’s Diversity Jurisdiction.

At bottom, the Liquidator’s position here rests not on the

carefully circumscribed Burford doctrine, but on an infinitely

broader notion that a District Court should be permitted to

abstain whenever the controversy before it arises in an area

affected by state regulation. Not only would such a notion

precipitate enormous amounts of wasteful litigation, as liti-

gants found cause to urge abstention in the faintest whiff of a

State interest, but it is flatly inconsistent with Congress's

grant of diversity jurisdiction to the federal courts. But even

if, as the Liquidator implicitly suggests, the Burford doctrine

permitted a District Court to replace this Court's precisely

delimited criteria with an ad hoc balancing of the state and

federal interests present in each case, there would be no basis

for abstention here.

the matter, the Subcommittee Report highlights the inconsistency

between a liquidator’s obligation vigorously to defend against such alle-

gations as representative of the insolvent insurer and the duty of an

impartial regulator to root out fraud.

1. The Liquidator’s Preference for Consolidated

Litigation Cannot Defeat Allstate’s Right to

Invoke Diversity Jurisdiction.

The Liquidator repeatedly argues that requiring him to pur-

sue his suit against Allstate in federal court would “disrupt[ }”

California’s statutory insolvency scheme, because, according

to the Liquidator, that scheme “clearly contemplates. . .

a single, integrated proceeding to devise and implement

rehabilitation plans, to marshal assets, accept and adjudicate

claims, and otherwise to protect policyholders.” Pet'r

Br. 21, 31. California law, however, could not and does not

require concentration of all litigation in the liquidation court.

And a long line of this Court’s cases squarely refutes the

notion that a liquidator or receiver has any reason to complain

about the adjudication of claims involving the insolvent out-

side the liquidation or receivership proceeding.

As an initial matter, California does not have the consti-

tutional authority to derogate from jurisdiction granted by

Congress by claiming exclusive authority over suits relating

to a given subject. Pennsylvania v. Williams, 294 U.S. 176,

180-82 (1935); Penn General Cas. Co. v. Pennsylvania, 294

U.S. 189, 197 (1935); see also Harrison v. St. Louis & S.F.R.

Co., 232 U.S. 318, 328-329 (1914). Equally, a state court does

not have the constitutional authority to enjoin a party from

pursuing an in personam claim in a federal court. General

Atomic Co. v. Felter, 434 U.S. 12, 17 (1977); Donovan v. City

of Dallas, 377 U.S. 408, 412-13 (1964).*°

” While the Liquidator refers to the liquidation court's injunction,

Pet'r Br. 8-9 & n.20, he does not argue that the injunction barred Allstate

from removing this action. In any event, the liquidation court's injunc-

tion does not, by its own terms, apply to this suit, which was initiated by

the Liquidator, see, e.g., J.A. 9, 24, and Allstate could not now be pre-

cluded from challenging the injunction if it did, see Martin v. Wilks, 490

U.S. 755 (1989); Underwriters Nat'l Assur. Corp. v. North Carolina Life

Ins. Guar Ass'n, 455 U.S. 691 (1982).

Unsurprisingly, then, the California statutory scheme does

not depend on the consolidation of all estate-related litigation

in the liquidation court. The California Insurance Code autho-

rizes the liquidator to “collect all debts due and claims

belonging to” the insurer in liquidation, id. § 1037(b); autho-

rizes him or her to “prosecute and defend any and all suits

and other legal proceedings” involving the insurer, id.

§ 1037(f); and establishes jurisdiction in the liquidation court

over any actions brought by or against the insurer, id. § 1058.

Nothing in the statute, however, purports to require that all

actions involving an insolvent insurer be brought in the same

court in which the liquidation proceeding was commenced.

See Webster v. Superior Court (Gillespie), 46 Cal.3d 338,

343-53, 758 P.2d 596, 598-603, 250 Cal. Rptr. 268, 271-78

(1988) (liquidation court not required to enjoin proceedings

against insolvent insurer in other courts); accord Fabe v.

Columbus Ins. Co., 68 Ohio App. 3d 226, 233, 587 N.E.2d

966, 970 (1990) (Ohio law). This case began in the same

court in which the liquidation proceeding is pending only

because the Liquidator, for his own convenience, chose to file

it there.

At the Liquidator’s own request, the Mission liquidation

court has entered a series of orders providing “([t}hat the Liq-

uidator is authorized to initiate such equitable or legal actions

or proceedings in this or other states as may appear to him

necessary to carry out his functions as Liquidator.” E.g., J.A.

10 (emphasis added). As conservator or liquidator of other

insurers, the Commissioner has frequently availed himself or

herself of the right to litigate in federal court and in courts of

states outside of California.*’ Indeed, allowing liquidators

37 ‘See, e.g., Gillespie v. Waite-Hill Assur. Ltd., No. 87-08504 RMT

(Kx) (C.D. Cal. 1987) (Commissioner as liquidator of insolvent insurers

sued to collect under reinsurance contract); Garamendi v. Caldwell,

[1992 Transfer Binder] Fed. Sec. L. Rep. (CCH) 996,861 (C.D. Cal.

1992) (Commissioner as liquidator of insolvent insurer sued for damages

for fraud, negligent misrepresentation, and RICO violations); Oakbrooke

Assocs., Ltd. v. Insurance Comm'r of Cal., 581 So. 2d 943 (Fla. App.

access to other states’ courts is one of the central purposes of

the Uniform Insurers Liquidation Act, which California has

adopted.**

Thus, the Liquidator’s argument boils down to an assertion

that in order to avoid interfering with the liquidation of an

insolvent insurer, federal courts should cede to the liquidation

court jurisdiction over any case involving that insurer. This

Court has repeatedly rejected that assertion, holding to the

contrary that the adjudication of ordinary contract claims

involving a company in receivership does not interfere with

the receiver's administration of the company’s assets or the

payment of its creditors. See, e.g., Coit Independence Joint

Venture v. FSLIC, 489 U.S. 561, 575-76 (1989); Morris v.

Jones, 329 U.S. 545, 548-50 (1947); United States v. Klein,

303 U.S. 276, 281-83 (1938); Riehle v. Margolies, 279 U.S.

218, 223-25 (1929); Bank of Bethel v. Pahquioque Bank, \4

Wall. (81 U.S.) 383, 401-02 (1872).

This Court has carefully delineated both the scope and lim-

its of the principle of reciprocal comity that applies when one

court, either federal or state, has taken jurisdiction in rem

over specific property, as has the liquidation court over Mis-

sion’s assets. “[T]he settled rule with respect to suits in equity

for the control by receivership of the assets of an insolvent

corporation,” which is “applicable to both federal and state

1991) (Commissioner as liquidator of insolvent insurer sued in Florida

state court to enforce assignment of rents and leases); Nassau Square

Assocs. v. Insurance Comm'r of Cal., 579 So. 2d 259 (Fla. App. 1991)

(similar).

3% See Prefatory Notes 92, in 13 U.L.A. 321, 322 (1986 ed.). The

Uniform Act also authorizes insurance commissioners in other states to

establish ancillary liquidation proceedings in which creditors can prove

claims against the insolvent insurer, see note 1, above, in order to spare

creditors residing in those states “the expense, annoyance and hardship

of proceeding in the courts of the domicile of the insurance company.” /d.

94, 13 U.L.A. at 323; see Cal. Ins. Code §§ 1064.3(b), 1064 .4(b). The

disposition of claims in such ancillary proceedings is binding on the Cal-

ifornia liquidation court. Cal. Ins. Code § 1064.4(b).

courts,” is that “the court first assuming jurisdiction over the

property may maintain and exercise that jurisdiction to the

exclusion of the other.” Penn General Cas. Co. v. Penn-

sylvania ex rel. Schnader, 294 U.S. 189, 195 (1935). But

“[w]here the judgment sought is strictly in personam, for the

recovery of money or for an injunction,” another court need

not yield. Penn General, 294 U.S. at 195; see Kline, 260 U.S.

at 230-31.

Applying this rule, this Court has held time and again that

a federal court may not surrender jurisdiction over an in per-

sonam claim involving an insolvent estate simply because, as

here, a state court has control over the res. For example, in

Morris v. Jones, the Court held that in light of the require-

ments of full faith and credit, the Illinois Supreme Court had

erred in upholding the disallowance of a claim in an insurance

liquidation proceeding that had been based on a judgment

rendered against the liquidator in a Missouri court. 329 U.S.

at 550-54. The Court explained that the “establishment of the

existence and amount of a claim against the debtor in no way

disturbs the possession of the liquidation court.” 329 U.S. at

549. Thus, the Court held, “the notion that. . . control over

" This rule of priority arises from practical necessity. When two

courts simultaneously assert in rem or quasi in rem jurisdiction over the

same property, one court must yield to the other with regard to an in rem

or quasi in rem claim if either is to “have possession or control of the

property which is the subject of the suit in order to proceed with the

cause and grant the relief sought.” Penn General, 294 U.S. at 195; see

Kline, 260 U.S. at 235. Contrary to the Liquidator's suggestion, Pet'r Br

7-8 n.18, a suit “to establish a debt” is strictly in personam, U.S. v. Bank

of N.Y., 296 U.S. 463, 478 (1935), and is therefore unlike a suit to “mar-

shal assets,” which involves the enforcement of liens against specific

property, see, ¢.g., Sowell v. Federal Reserve Bank, 268 U.S. 449, 456-

457 (1925), thus requiring the court to “control the property” in order “to

give effect to its jurisdiction,” Bank of N.Y., 296 U.S. at 477. The only

assets of Mission involved in this action are its contract claims. Allstate

does not dispute the Liquidator’s control over those claims, but merely

seeks to defend against them as an adverse party. See Kinder. 78 Cal.

App. 3d at 580-581, 144 Cal. Rptr. at 295-296.

proof of claims is necessary for the protection of the exclu-

Sive jurisdiction of the court over the property is a mistaken

one.” /d.*°

The Court relied on this principle in Coit Independence

Joint Venture, in which it held that a suit against the Federal

Savings and Loan Insurance Corporation in its capacity as a

receiver of an insolvent savings and loan association did not

“restrain or affect” the exercise of the FSLIC’s receivership

functions within the meaning of the applicable statute. 489

U.S. at 574-77. Examining the background against which the

statute had been enacted, the Court observed that “it was well

established at common law that suits establishing the exis-

tence or amount of a claim against an insolvent debtor did not

interfere with or restrain the receiver's possession of the

insolvent’s assets or its exclusive control over the distribution

of assets to satisfy claims. /d. at 575, citing Morris, 329 U.S.

at 549; Riehle, 279 U.S. at 224; and Bank of Bethel, 14 Wall.

at 401 -402.*!

against insurer in liquidation, unlike suit to recover possession of the res

in the control of the liquidation court, can be adjudicated “without dis-

turbing the control of the state court”); Riehle, 279 U.S. at 224 (“[t}here

is no inherent reason why the adjudication of the liability of the debtor

im personam may not be had in some court other than that which has con-

trol of the res”); see also Markham v. Allen, 326 U.S. 490, 494-95 (1946)

(in personam federal suits by and against probate administrator do not

interfere with state court's jurisdiction over estate or violate probate

exception to federal jurisdiction); Princess Lida v. Thompson, 305 U.S.

456, 467 (1938) (“an action in federal court to establish the validity or

the amount of a claim [against trust under state court control} constitutes

no interference with a state court's possession or control of a res”); Com-

monwealth Trust Co. v. Bradford, 297 U.S. 613, 617-620 (1936) (in per-

sonam federal suit by receiver of insolvent bank to establish right to

participate in trust does not disturb state court's in rem control over trust

assets).

*! Against this background, it is clear that the Liquidator reads too

much into Penn General and Pennsylvania v. Williams. See Pet'r Br.

43-45. In Penn General, a federal-court equity receivership had been

By complaining that federal adjudication of his action

against Allstate would unduly interfere with the conduct of

the liquidation proceeding, the Liquidator simply recasts in

Burford guise an argument that this Court has rejected in Coit,

Morris, and the long line of decisions they represent. If the

Liquidator could not have complained about defending a

claim against the Mission estate outside the liquidation court,

surely he cannot complain about having to pursue his own

claim against a third party there. As the Court said in Morris

with respect to the full faith and credit statute, so too with

respect to the diversity statute: neither contains an “exception

in case of liquidations of insolvent insurance companies.” 329

U.S. at 553. Simply put, the Liquidator’s argument from “con-

venience in administration,” id., cannot defeat Allstate's right

to invoke the diversity jurisdiction of the District Court.

2. The Presence of State-Law Issues Cannot Defeat

Allstate's Right to Invoke Diversity Jurisdiction.

The Liquidator also contends that the presence of important

state law issues justified the District Court's remand order.

Pet'r Br. 5-6. The Liquidator misconceives the role of state

law and policy in the Burford doctrine, which is concerned

not with preventing federal courts from deciding important

issues of state law, but with preventing them from displacing

state courts when they are providing specialized review of

commenced against an insolvent insurer. The Court held that the federal

court sitting im equity, “in the exercise of judicial discretion,” could relin-

quish control over the insurer's assets to a state court that had appointed

the state imsurance commissioner as statutory liquidator, even though the

federal court had acquired jurisdiction first. 294 U.S. at 194-99, see also

Pennsylvania v. Williams, 294 U.S. at 182-86 (companion case, liqui-

dation of building and loan society). But the Court stressed in Penn Gen-

eral that the jurisdiction of whichever court ended up with in rem contro!

of the assets was “exclusive only so far as its exercise is necessary for the

appropriate control and disposition of the property.” 294 U.S. at 198, see

Commonwealth Trust Co., 297 U.S. at 619-20 (doctrine of Penn General

and Pennsylvania v. Williams has no application to in personam claims)

State administrative policymaking on matters of peculiarly

local concern. See Part I1.A, above. The Liquidator's argu-

ment simply dresses up in Burford rhetoric an assumption

that, as this Court has repeatedly held, conflicts with the very

basis of diversity jurisdiction.

A federal court has a bedrock obligation to decide issues of

state law—easy or hard, settled or unsettled—arising in the

cases that come before it. Meredith v. City of Winter Haven,

320 U.S. 228, 236 (1943); see also McNeese v. Board of

Educ., 373 U.S. 668, 673 n.5 (1963); Propper v. Clark, 337

U.S. 472, 489-90 (1948). Indeed, “[t]he very essence of the

Erie doctrine is that the bases of state law are presumed to be

communicable by the parties to a federal judge no less than to

a State judge.” Salve Regina College v. Russell, 499 U.S. 225,

238 (1991), citing Erie R. Co. v. Tompkins, 304 U.S. 64

(1938).

Even setting aside the District Court's obligation to decide,

as a threshold matter, Allstate's motion to compel arbitration

under the Federal Arbitration Act, see Part II.C, below, this

case would do no more than require the District Court to ful-

fill that bedrock obligation. Even if the Court were to deny

the motion to compel arbitration and reach the underlying

issues of liability, it would have to apply only the common

law of contract; defenses based on contract language and prin-

ciples such as statutes of limitations; the statutory right of

setoff; or whatever other principles the parties might urge the

Court to apply. Decisions on such issues constitute the every-

day fare of a district court. See Grode v. Mutual Fire, 8 F.3d

at 959.”

While the Liquidator repeatedly refers to the supposed com-

plexity of the insurance insolvency provisions of the California Insurance

Code, he makes no attempt to explain why the District Court, if required

to do so, would be incapable of reaching “the correct application and

interpretation,” Pet'r Br. 6, of the setoff provision, Cal. Ins. Code § 1031,

or the California Supreme Court's recent construction of that provision

in Prudential Reinsurance, 3 Cal. 4th at 1136-37, 842 P.2d at 59-60, 14

Cal. Rptr. 2d at 761. Occupying less than a single page of text, the sec-

The Liquidator also argues that he has a right to protection

against “multiple litigation in multiple jurisdictions with

varying interpretations of California law and policy.” Pet’r Br.

48; see also id. at 9, 14, 47. He thereby echoes the District

Court, which based its Burford holding on a determination

that California's “overriding interest in regulating insurance

insolvencies and liquidation in a uniform and orderly manner

. . could be undermined by inconsistent rulings from the

federal and state courts” on “the hotly contested set-off

issue.” Pet. App. 34a. It is well settled, however, that “the

mere potential for conflict in the results of adjudications, does

not, without more, warrant staying exercise of federal juris-

diction.” Colorado River, 424 U.S. at 816. Were the rule oth-

erwise, any party facing repetitive litigation on identical

claims would be able to seek dismissal of suits in one or sev-

eral courts in favor of suits pending elsewhere involving sim-

ilar issues. Notwithstanding the Liquidator’s lament, the risk

of inconsistent adjudications on identical issues is a risk that

inheres in any multicourt system, including the multiple

courts of a single state, the independent judicial systems of

the several states, or the dual judicial systems of the state and

federal governments.

By trumpeting the objective of California law to protect

insurance policyholders, the Liquidator comes close to assert-

ing that California has an interest in the outcome of this suit.

Pet'r Br. 48; see also Pet. App. 15a. But the Liquidator can-

not mean to suggest that California would have any interest in

this dispute beyond ensuring its fair and just adjudication. By

diligently proceeding to resolve the case by deciding the

issues as they arose, the District Court would ensure the vin-

dication of any state policies reflected in applicable Cali-

fornia law.

tion is patterned after the setoff provision of the federal Bankruptcy Act

of 1898, codifies the common-law right of setoff, and contains no ref-

erences to arcane concepts of insurance regulation. See id. at 1123-24,

842 P.2d at 50, 14 Cal. Rptr. 2d at 751.

C. The District Court Had No Discretion to Abstain in

the Face of Allstate’s Motion to Compel Arbitration

Under the Federal Arbitration Act.

Immediately after removing this case to federal court, All-

state filed a motion to compel arbitration under the Federal

Arbitration Act, 9 U.S.C. §§ 2-4. J.A. 77-110. As this Court

has repeatedly explained, that Act reflects “an emphatic fed-

eral policy in favor of arbitral dispute resolution.” Mitsubishi

Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614,

631 (1985); see, e.g., Mastrobuono v. Shearson Lehman Hut-

ton, Inc., 115 S. Ct. 1212, 1215-16 (1995).*

Sections 3 and 4 of the Act give the federal policy teeth.

Those sections implement “Congress’ clear intent. . . to

move the parties to an arbitrable dispute out of court and into

arbitration as quickly and easily as possible.” Moses H.Cone

Memorial Hospital v. Mercury Construction Corp., 460 U.S.

1, 22 (1983). Thus, when faced with a motion to compel arbi-

tration, the court “may consider only issues relating to the

making and enforcement of the agreement to arbitrate.” Prima

Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 404

(1967). “By its terms, the Act leaves no place for the exercise

of discretion by a district court, but instead mandates that dis-

43 As the treaties at issue here reflect, J.A. 108-09, arbitration is

the virtually universal means of dispute resolution in the reinsurance

industry. Ronald A. Jacks, Arbitration and Insurer Insolvencies, in ABA,

Law and Practice of Insurance Company Insolvency 260 (1986). Believ-

ing strongly in the efficiency and fairness of industry arbitration, Allstate

has consistently and vigorously sought to vindicate its right under the

Federal Arbitration Act to ready enforcement of agreements to arbitrate.

See, e.g., Universal Reinsurance Corp. v. Allstate Ins. Co., 16 F.3d 125

(7th Cir. 1994) (enforcing right under reinsurance contract arbitration

Clause to appoint arbitrator upon adverse party's failure to do so in timely

manner); North River Ins. Co. v. Allstate Ins. Co., 866 F. Supp. 123

(S.D.N.Y. 1994) (holding arbitrable collateral estoppel issues pursuant

to arbitration clause in reinsurance contract); Ainsworth v. Allstate Ins.

Co., 634 F. Supp. 52 (W.D. Mo. 1985) (holding enforceable against liq-

uidator of insolvent insurer arbitration clause in reinsurance contract).

trict courts shall direct the parties to proceed to arbitration on

issues as to which an arbitration agreement has been signed.”

Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 218 (1985)

(emphasis in original). In short, courts must implement the

Act in a manner that prevents a party resisting arbitration

from generating the kind of “prearbitration litigation that

would frustrate the very purpose of the statute.” Allied-Bruce

Terminix Cos. v. Dobson, 115 S. Ct. 834, 843 (1995) (O’Con-

nor, J., concurring); see also id. at 841-42 (opinion of the

Court); Moses H. Cone, 460 U.S. at 23 (emphasizing “statu-

tory policy of rapid and unobstructed enforcement of arbi-

tration agreements”).

Even if the Burford doctrine might otherwise apply in an

action to collect money on a contract, it surely cannot apply

in the face of a motion to compel arbitration under the Federal

Arbitration Act. See Moses H. Cone, 460 U.S. at 23-26. Not

only does such a motion seek no restraint on the enforcement

of a state administrative order, but it is inconceivable that a

decision on such a motion by a federal court would disrupt

the development of uniform state policy in an area of pecu-

liarly local concern. See NOPS/, 491 U.S. at 361-62.

The Liquidator nevertheless suggests that the Burford doc-

trine might apply here because the post-liquidation enforce-

ability of agreements to arbitrate “is an unsettled question

under California law.” Pet’r Br. 5; see id. 26. The enforce-

ability of arbitration agreements, however, is a matter of fed-

eral law. Even if California law purported to render

agreements to arbitrate unenforceable against the liquidator

of an insolvent insurance company,“ it would remain a ques-

44 —_— Neither the California Insurance Code nor the California Arbi-

tration Act contains any provision purporting to have that effect, and the

Liquidator can point to no reported California decision holding that they

do. To the contrary, the California courts have held that a liquidator

“steps into the shoes of the insolvent insurer, taking the relevant claims

and defenses as he finds them,” Prudential Reinsurance, 3 Cal. 4th at

1136-37, 842 P.2d at 59, 14 Cal. Rptr. 2d at 760; see Texas Commerce

tion of federal law whether the antipreemption provision of

the McCarran-Ferguson Act, 15 U.S.C. § 1012(b), insulated

such a provision from the otherwise preemptive effect of the

Federal Arbitration Act. See Terminix, 115 S. Ct. at 838-39;

Perry v. Thomas, 482 U.S. te 489-90 (1987); Southland

Corp. v. Keating, 465 U.S. 1, 15-16 (1984).

As NOPSI makes clear, a federal court may not abstain

from deciding a question of federal preemption. 491 U.S. at

362-63; see Moses H. Cone, 460 U.S. at 23-26. At a mini-

mum, the District Court had no discretion to remand the case

to the state court without deciding Allstate’s motion to com-

pel arbitration under the Federal Arbitration Act

CONCLUSION

The judgment of the United States Court of Appeals for the

Ninth Circuit should therefore be affirmed.

Respectfully submitted,

JOSEPH D. LEE DONALD FRANCIS DONOVAN

Munger, Tolles & Olson (Counsel of Record)

CARL MICARELLI

Debevoise & Plimpton

JAMES G. SPORLEDER 875 Third Avenue

MARY KATHERINE D’AMORE New York, New York 10022

Allstate Insurance Company Telephone: (212) 909-6000

Attorneys for Respondent

Allstate Insurance Company

January 5, 1996

Bank, 28 Cal App 4th at 1245 1246, 34 Cal R ptr 2d at 162: HD

Roosen Co. v. Pacific Radio Pub. Co., 123 Cal. App. 525, 534, 11 P.2d

873. 876 (1932)

APPENDIX

28 U.S.C. § 1291 provides:

The courts of appeals (other than the United States Court

of Appeals for the Federal Circuit) shall have jurisdic-

tion of appeals from all final decisions of the district

courts of the United States, the United States District

Court for the District of the Canal Zone, the District

Court of Guam, and the District Court of the Virgin

Islands, except where a direct review may be had in the

Supreme Court. The jurisdiction of the United States

Court of Appeals for the Federal Circuit shall be limited

to the jurisdiction described in sections 1292(c) and (d)

and 1295 of this title.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.