Quackenbush v. Allstate Insurance Company

517 U.S. 706 (1996)

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Nature of the Case

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Facts

Quackenbush (P) was the insurance commissioner for the State of California. P was appointed trustee over the Mission companies and in an effort to gather the assets of those companies, P sued Allstate (D) seeking contract and tort damages for an alleged breach of D's reinsurance agreements with Mission. D moved the action to federal court on diversity grounds. P moved for remand in that the Burford case was controlling and that the viability of D's setoff claims was a hotly disputed question of state law and that this same issue was pending before a state court in another case arising out of the Mission insolvency. The District Court remanded. D appealed, and the Ninth Circuit vacated and ordered the case set for arbitration; Burford applied only when the relief sought is equitable in nature, and as P was only seeking legal relief, abstention was inappropriate.