ProMed's motion to strike portions of Murff's brief and

1

appendix is denied as moot in light of the fact that the matters

contained in the challenged materials are irrelevant to our

disposition of the appeal.

___________

No. 95-3489

___________

G. Thomas Murff, *

*

Appellant, *

* Appeal from the United States

v. * District Court for the

* Western District of Missouri.

Professional Medical Insurance *

Company; Professional Medical *

Risk Retention Group, In *

Liquidation, *

*

Appellees. *

___________

 Submitted: May 16, 1996

 Filed: October 4, 1996

___________

Before BOWMAN, HEANEY, and WOLLMAN, Circuit Judges.

___________

WOLLMAN, Circuit Judge.

Thomas Murff appeals from the district court's order dismissing his

claim under the Age Discrimination in Employment Act (ADEA), 29 U.S.C. §§

621 et seq. We reverse and remand.1

I.

Murff's employer, Professional Medical Insurance Company and

Professional Medical Risk Retention Group (collectively ProMed) demoted

Murff on March 15, 1993, and then terminated him on February 15, 1994,

replacing him with a younger employee. On February 7, 1994, ProMed entered

rehabilitation under the
 A state court cannot, of course, enjoin federal court

2

actions. General Atomic Co. v. Felter, 434 U.S. 12 (1977); Donovan

v. Dallas, 377 U.S. 408 (1964); Fragoso v. Lopez, 991 F.2d 878, 881

(1st Cir. 1993).

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supervision of the Circuit Court of Jackson County, Missouri, acting as the

receivership court. See Insurers Supervision, Rehabilitation and

Insolvency Act (Insolvency Act), Mo. Rev. Stat. §§ 375.1150 et seq. (1994).

On February 17, 1994, Murff brought this action under the ADEA and the

Missouri Human Rights Act. When ProMed's rehabilitation was converted to

a liquidation on April 7, 1994, the state receivership court enjoined all

persons from obtaining any judgment against ProMed. The Director of the 2

Missouri Department of Insurance then appointed Cynthia Clark Campbell as

Special Deputy Receiver of ProMed to effect liquidation proceedings.

The district court dismissed Murff's claim pursuant to Federal Rule

of Civil Procedure 12(b)(1), finding that the McCarran-Ferguson Act, 15

U.S.C. §§ 1011 et seq., precluded it from exercising jurisdiction because

"the independent exercise of jurisdiction over Murff's claim would impair

Missouri's Insolvency Act." The court also ruled that "[s]hould the

liquidation court conclude that a separate tribunal should hear the case,

then jurisdiction may become proper here." The district court's dismissal

of Murff's complaint presents a question of law that we review de novo.

See Furrer v. Brown, 62 F.3d 1092, 1093 (8th Cir. 1995), cert. denied, 116

S. Ct. 1567 (1996).

II.

Missouri's Insolvency Act establishes procedures for the liquidation

of bankrupt insurance companies and sets priorities for their policyholders

and other creditors. See State ex rel Missouri Property & Casualty Ins.

Guar. Ass'n v. Brown, 900 S.W.2d 268, 270 (Mo. Ct. App. 1995). The

Insolvency Act provides that no "existing
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actions be maintained or further presented after issuance of [a

liquidation] order," § 375.1188, converts such actions to claims in

receivership court, § 375.1210, and establishes the priority of

distribution of such claims. § 375.1218.

Section 2(b) of the McCarran-Ferguson Act provides:

No Act of Congress shall be construed to invalidate, impair, or

supersede any law enacted by any State for the purpose of

regulating the business of insurance . . . unless such Act

specifically relates to the business of insurance.

15 U.S.C. § 1012(b).

The McCarran-Ferguson Act allows states to regulate and tax the

business of insurance free from barriers that broad-sweeping federal

statutes might inadvertently impose on insurance companies. United States

Dep't of Treasury v. Fabe, 508 U.S. 491, 500 (1993). The Act was Congress'

response to the Supreme Court's decision in United States v. South-Eastern

Underwriters Ass'n, 322 U.S. 533 (1944), which had held that the Sherman

Act was applicable to insurance companies. The McCarran-Ferguson Act's

basic purposes were to allay doubts about states' power to tax and regulate

insurance companies, see F.T.C. v. Travelers Health Ass'n, 362 U.S. 293,

299 (1960), and to "protect state regulation primarily against inadvertent

federal intrusion" similar to that threatened by the Sherman Act. Barnett

Bank of Marion County, N.A. v. Nelson, 116 S. Ct. 1103, 1112 (1996). 

A federal statute is inverse-preempted under the McCarran-Ferguson

Act if (1) it does not "specifically relate[] to the business of

insurance"; (2) the state statute was enacted "for the purpose of

regulating the business of insurance"; and (3) the federal statute would

"invalidate, impair or supersede" the state statute. Fabe, 508 U.S. at

501.
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A.

We agree with the district court that the ADEA does not specifically

relate to the business of insurance. In Barnett Bank, the Court analyzed

a federal statute permitting a small-town national bank to "act as the

agent for any fire, life, or other insurance company." 116 S. Ct. at 1106

(quoting 12 U.S.C. § 92 (1916)) (emphasis in original). Noting that the

statute explicitly referred to insurance, the Court held that it

specifically related to the business of insurance. Id. at 1111. The Court

contrasted implicit references to insurance made by general language such

as "business activity" with the words "finance, banking, and insurance,"

which make such a reference explicitly and specifically. Id.

The ADEA does not contain a specific, explicit reference to

insurance. The only reference to insurance companies is the term

"employer," at best only an implicit reference to insurance. The ADEA thus

fails the Barnett Bank specificity test.

B.

We agree with the district court that the Missouri Insolvency Act was

enacted "for the purpose of regulating the business of insurance." A state

statute regulates the business of insurance if it "affects the relation of

insured to insurer and the spreading of risk." Barnett Bank, 116 S. Ct.

at 1112. "[F]ederal law must yield to the extent the [state] statute

furthers the interests of policyholders." Fabe, 508 U.S. at 501-02. See

also Union Labor Life Ins. Co. v. Pireno, 458 U.S. 119, 129 (1982); Group

Life & Health Ins. Co. v. Royal Drug Co., 440 U.S. 205, 211-212 (1979);

S.E.C. v. National Securities, Inc., 393 U.S. 453, 460 (1969). 

The Ohio statute at issue in Fabe gave the claims of policyholders

priority over those of the federal government. The
 For an example of a state statute that has been held not to 3

regulate the business of insurance, see International Ins. Co. v.

Duryee, 1996 WL 536678 (6th Cir. Sept. 24, 1996).

-5-

Court found that the scheme protected policyholders "by ensuring the

payment of [their] claims despite the insurance company's intervening

bankruptcy." The scheme safeguarded the performance of insurance

contracts, "an essential part of the `business of insurance." Fabe, 508

U.S. at 505. The Ohio statute, therefore, was "a law `enacted for the

purpose of regulating the business of insurance.'" Id. at 505. 

We conclude that the Missouri statute purporting to stay all actions

against an insolvent insurer is "a law regulating the business of

insurance." It protects policyholders because it preserves the assets of

the insolvent insurer's estate, thereby enhancing the ability of an

insolvent insurance company to perform its contractual obligations.3

C.

In determining whether the federal statute will "impair, invalidate,

or supersede" the state statute, we must examine the interaction between

the federal and state statutes and analyze whether this interaction is one

the McCarran-Ferguson Act was intended to address. The district court,

identifying no conflict between the substantive provisions of the ADEA and

the Insolvency Act, nonetheless found that the exercise of jurisdiction

over Murff's ADEA claim would impair Missouri's Insolvency Act.

The McCarran-Ferguson Act seeks to "protect state regulation

primarily against inadvertent federal intrusion," Barnett, 116 S. Ct. at

1112. Thus, the McCarran-Ferguson Act applies whenever Congress "is

attempting to regulate" broadly and that regulation would intrude "in the

sphere reserved primarily to the States by
 Murff cites Spirt v. Teachers Ins. & Annuity Ass'n, 691 F.2d 4

1054 (2d Cir. 1982), vacated on other grounds, 463 U.S. 1223

(1983), for the proposition that the McCarran-Ferguson Act does not

apply to statutes such as the ADEA.

The McCarran Act was never meant to prevent, and could

not prevent, Congress from explicitly imposing

requirements on employers and their agents under the

civil rights statutes, the National Labor Relations Act,

or any other statute that seeks to enforce compliance

with federal policies in such fields as civil rights,

labor and other areas of national concern.

Id. at 1066. As the Seventh Circuit has pointed out, however,

Spirt stands on doubtful ground. N.A.A.C.P. v. American Family

Mut. Ins. Co., 978 F.2d 287, 293-97 (7th Cir. 1992), cert. denied,

508 U.S. 907 (1993). In light of our holding that the ADEA does

not impair the Missouri Insolvency Act, we need not reach this

issue. We note that Congress could, of course, except the ADEA

from the reach of the McCarran-Ferguson Act, just as it has the

National Labor Relations Act, the Fair Labor Standards Act, and the

Merchant Marine Act. 15 U.S.C. § 1014.

-6-

the McCarran-Ferguson Act." National Securities, 393 U.S. at 463. 

In National Securities, the Securities and Exchange Commission (SEC)

attempted to unwind an allegedly fraudulent merger of two insurance

companies that Arizona had approved. The Supreme Court rejected the

state's argument that any SEC interference with the merger would

"invalidate, impair, or supersede" the state's right to protect

policyholders, stating that "[w]e cannot accept this overly broad

restriction on federal power." Id. at 462-63. The Court explained that

the federal government sought to regulate an area entirely distinct from

insurance law and that Arizona law did "not command[] something that the

Federal Government [sought] to prohibit." Id. at 462-63. See also

Villafane-Neriz v. F.D.I.C., 75 F.3d 727, 736 (1st Cir. 1996) (no

"impairment" of state statute if federal statute does not directly prohibit

state-allowed activity and influence on state control is merely indirect);

Merchants Home Delivery Service, Inc. v. Frank B. Hall & Co., 50 F.3d 1486,

1492 (9th Cir.) (a federal law "will be precluded only where [it] expressly

prohibit[s] acts permitted by state law, or vice versa"), cert. denied, 116

S. Ct. 418 (1995).4
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When viewed in the light of the principles and purposes underlying

the McCarran-Ferguson Act, as explained in Barnett Bank and National

Securities, there is no inherent conflict between the ADEA and the

Insolvency Act. The ADEA does not prohibit something that the Insolvency

Act commands, nor does it command something that the Insolvency Act

prohibits. The provisions of the ADEA itself, applied to insurance

companies, are entirely compatible with the state's regulation of insurance

law. 

ProMed does not dispute this point, but contends instead that the

exercise of federal jurisdiction over Murff's federal claim would impair

the Insolvency Act's comprehensive scheme for efficiently and equitably

liquidating insolvent insurance companies. As we see it, however, the

adjudication of an ADEA claim in federal court would not so substantially

impair the deputy receiver's ability to effect ProMed's liquidation under

the Insolvency Act as to run afoul of the proscriptions of the McCarranFerguson Act.

Any money judgment that Murff may obtain against ProMed would at best

appear to be a low-ranked claim in the order of priorities established by

section 375.1218. Likewise, any equitable relief in terms of reinstatement

would be highly improbable in light of ProMed's soon-to-occur liquidation.

There would, of course, be the administrative bother and expense of having

to defend against the ADEA action, but this is a factor that the district

court can weigh in deciding whether to stay Murff's action.

In Wolfson v. Mutual Ben. Life Ins. Co., 51 F.3d 141 (8th Cir. 1996),

a life insurance policy beneficiary sued an insurer for benefits under an

ERISA plan. The insurer then became insolvent,
 Burford v. Sun Oil, 319 U.S. 315 (1943). 5

 Colorado River Water Cons. Dist. v. United States, 424 U.S. 6

800 (1976).

-8-

with the result that the state's "mandatory special procedure to adjudicate

claims against the insolvent" was applicable. Id. at 145. The district

court stayed the beneficiary's claim, and we affirmed under the Burford5

and Colorado River abstention doctrines. In affirming the stay, we

6

implicitly acknowledged that the district court's jurisdiction over

Wolfson's federal ERISA claim was proper. We also stated that "[t]he

district court properly protected Wolfson's claim for monetary relief under

ERISA by staying rather than dismissing" it, suggesting that surrendering

jurisdiction over Wolfson's federal claim would have been erroneous. Id.

at 147.

Wolfson recognized that the McCarran-Ferguson Act reflects "a strong

federal policy of deferring to state regulation of the insurance industry,"

including insolvency statutes. Id. at 147. This policy, however, does not

translate into state preemption of federal jurisdiction or void every

federal statute under which a plaintiff may sue an insolvent insurer in

federal court, but merely counsels that a federal court consider the

propriety of abstaining from or staying the federal action. See Hartford

Cas. Ins. Co. v. Borg-Warner Corp., 913 F.2d 419, 426-27 (7th Cir. 1990);

Lac D'Amiante du Quebec v. American Home Assurance Co., 864 F.2d 1033,

1038-39 (1988), cert. denied, 493 U.S. 842 (1989); Law Enforcement Ins.

Co., Ltd. v. Corcoran, 807 F.2d 38, 44 (2d Cir. 1986), cert. denied, 481

U.S. 1017 (1987).

We conclude, therefore, that the district court should not have

dismissed the action but should instead have considered whether the action

should be stayed. Although the statement "jurisdiction may become proper

here" may have the overtones of a stay, still and all the order was that

of a dismissal and not a
-9-

stay.

The judgment is reversed, and the case is remanded to the district

court for further proceedings consistent with this opinion.

 A true copy.

Attest:

CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.