### ProMed's motion to strike portions of Murff's brief an d 1 

### append ix is denied as moot in light of the fact that the matter s cont ained in the challenged materials are irrelevant to ou r 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 Mu rff appeals from the district court's order dismissing his claim under the Age D iscrimination in Employment Act (ADEA), 29 U.S.C. §§ 621 et seq. We reverse and remand. 1

I.

Murff's employer, Professional Medical Insurance Company an d Profe ssional Medical Risk Retention Group (collectively ProMed) demote d Murff on March 15, 1993, and then terminated him on February 15, 1994 , replacing him with a younger employee. On February 7, 1994, ProMed entere d rehabilitation under the

### A s tate court cannot, of course, enjoin federal cour t 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 8 78, 881 (1st Cir. 1993).
-2- supervision of the Circuit Court of Jackson County, Missouri, acting as th e receiv ership court. See Insurers Supervision, Rehabilitation an d Insolvency Act (Insolvency Act), Mo. Rev. Stat. §§ 375.1150 et seq. (1994)

. On February 17, 1994, Murff brought this action under the ADEA and th e Missouri Human Rights Act. When ProMed's rehabilitation was converted to a liquidation on Apri l 7, 1994, the state receivership court enjoined all persons fr om obtaining any judgment against ProMed. The Director of the 2 Missouri Department o f Insurance then appointed Cynthia Clark Campbell as Special Deputy Receiver of ProMed to effect liquidation proceedings.

The distr ict court dismissed Murff's claim pursuant to Federal Rule of Civ il Procedure 12(b)(1), finding that the McCarran-Ferguson Act, 1 5 U.S.C. §§ 1011 et seq ., precluded it from exercising jurisdiction because "the independent exer cise of jurisdiction over Murff's claim would impair Miss ouri's Insolvency Act." The court also ruled that "[s]hould th e liquidation court con clude 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 establishe s procedures for the liquidation of bankrupt insurance companies and sets priorities for their policyholder s 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). Th e Insolvency Act provides that no "existing

### -3-

action s be maintained or further presented after issuance of [ a liqu idation] order," § 375.1188, converts such actions to claims i n receivership court, § 375.1210, and establishes the priority o f 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 o f regu lating the business of insurance . . . unless such Ac t specifically relates to the business of insurance.

15 U.S.C. § 1012(b).

The McCarran-Ferguson Act allows states to regulate and tax th e bu siness of insurance free from barriers that broad-sweeping federa l 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 Unit ed States v. South-Eastern Underwriters Ass'n , 322 U.S. 533 (1944), which had held that the Sherman Act wa s applicable to insurance companies. The McCarran-Ferguson Act' s basic purposes were to allay doubts about states' power to tax and regulat e insurance companies, see F.T.C. v. Travelers Health Ass'n , 362 U.S. 293, 299 (1960), and to "protect state regulation pri marily 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 fe deral statute is inverse-preempted under the McCarran-Ferguso n Ac t if (1) it does not "specifically relate[] to the business o f insur ance"; (2) the state statute was enacted "for the purpose o f regulating the business of insurance"; and (3) the federal statute would "invalidate, impair or supersede" the state statute. Fabe , 508 U.S. a t 501.

### -4- A.
We agree with the district court tha t the ADEA does not specifically relate to the busines s of insurance. In Barnett Bank , the Court analyzed

a fed eral statute permitting a small-town national bank to " act as th e agent for any fire, life, or other insurance com pany ." 116 S. Ct. at 1106 (quoting 12 U.S.C. § 92 (1916)) (emphasis in original). Noting that the statut e explicitly referred to insurance, the Court held that i t specifically related to the business of insurance. Id. at 1111. The Cour t contrasted implicit r eferences 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 t o insur ance. The only reference to insurance companies is the ter m "employer," at best only an implicit reference to insurance. The ADEA thu s fails the Barnett Bank specificity test.

B.
We agree with the district court that the Missouri Insolvency A ct was enacted "for the purpose of regulating the business of insurance." A stat e statute regulates the business of insurance if i t "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] statut e furthers the interest s 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 Ohi o statute at issue in Fabe gave the claims of policyholder s 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 th e payment of [their] claims despite the insurance company's intervenin g ban kruptcy." The scheme safeguarded the performance of insuranc e contracts, "an essential part of the `business of insurance." Fabe , 508 U.S. at 505. The Ohio statute, therefore, was "a law `enacted for th e purpose of regulating the business of insurance.'" Id. at 505.

We conclude that the Missouri statut e purporting to stay all actions again st an insolvent insurer is "a law regulating the business o f insurance." It prote cts policyholders because it preserves the assets of the in solvent insurer's estate, thereby enhancing the ability of a n insolvent insurance company to perform its contractual obligations. 3

C.
In determining whether the federal s tatute will "impair, invalidate,
or supersede" the state statute, we must examine the interaction between the federal and state statutes and analyze wheth er 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 In solvency Act, nonetheless found that the exercise of jurisdictio n over Murff's ADEA claim would impair Missouri's Insolvency Act.

The M cCarran-Ferguson Act seeks to "protect state regulatio n primarilyagainst inadvertent federal intrusion," Barnett , 116 S. Ct. at 1112. Thus, the McCarran-Ferguson Act applies whenever Congress "i s attempting to regulat e" 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. 122 3 (1983), for the proposition that the McCarran-Ferguson Act d oes not apply to statutes such as the ADEA.
The McCarran Act was never meant to prevent, and coul d not prevent, Congress from explicitly imposin g requir ements on employers and their agents under th e civil rights statutes, the Nat ional Labor Relations Act, or a ny other statute that seeks to enforce complianc e 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 Famil y Mut. Ins. Co. , 978 F.2d 287, 2 93-97 (7th Cir. 1992), cert. denied , 508 U.S. 907 (1993). In light of our holding that the ADEA doe s not impair the Missouri Insolvency Act, we need not reach thi s issue

. We note that Congress could, of course, except the ADE A 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 Securiti es and Exchange Commission (SEC) attemp ted to unwind an allegedly fraudulent merger of two insuranc e comp anies that Arizona had approved. The Supreme Court rejected th e state' s argument that any SEC interference with the merger woul d "invalidate, impair, or supersede" the state's right to protec t pol icyholders, stating that "[w]e cannot accept this overly broa d 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 G overnment [sought] to prohibit." Id. at 462-63. See als o Villa fane-Neriz v. F.D.I.C. , 75 F.3d 727, 736 (1st Cir. 1996) (n o "impairment" of state statute if federal statute does not directly prohibi t state-allowed activity and influence on state co ntrol 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] expressl y prohibit[s] acts permitted by state law, or vice versa"), cert. denied , 11 6 S. Ct. 418 (1995). 4

### -7- When vie wed in the light of the principles and purposes underlyin g the Mc Carran-Ferguson Act, as explained in Barnett Bank and Nationa l Securiti es , there is no inherent conflict between the ADEA and th e Insolvency Act. The ADEA does not prohibit something that the Insolvency Act commands, nor does it command something that the Insolvency Ac t prohibits. The provisions of the ADEA itself, applied to insuranc e companies, are entirely compatible with the state's regulation of insuranc e law.

ProMe d does not dispute this point, but contends instead that th e exercise of federal jurisdiction over Murff's federal claim would impair the Insolvency Act's comprehensive scheme for efficiently and equitabl y liquidating insolvent insurance companies. As we see it, however, th e adjudication of an AD EA claim in federal court would not so substantially impair the deputy rec eiver'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 a t best appear to be a low-ra nked claim in the order of priorities established by section 375.1218. Likewise, any equitable relief in terms of reinstatemen t would be highly improbable in light of ProMed's soon-to-occur liquidation. There would, of course, be the administrative bo ther 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 poli cy 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 adjudicat e claims against the insolvent" was applicable. Id. at 145. The district court s tayed the beneficiary's claim, and we affirmed under the Burford 5 and C olorado River abstention doctrines. In affirming the stay, w e 6 implicitly acknowledged that the district court's jurisdiction ove r Wolfson's federal ERISA claim was proper. We also stated that "[t]h e district court properly protected Wolfson's claim for monetary relief unde r ERISA by staying rath er than dismissing" it, suggesting that surrendering jurisdiction over Wol fson's federal claim would have been erroneous. Id. at 147.

Wolfsonrecognized 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 no t transl ate into state preemption of federal jurisdiction or void ever y federal statute under which a plaintiff may sue an insolvent insurer i n fede ral court, but merely counsels that a federal court consider th e propriety of abstaini ng 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 , 103 8-39 (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 hav e dismissed the action but should instead have con sidered whether the action should be stayed. Al though 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 jud gment is reversed, and the case is remanded to the distric t court for further proceedings consistent with this opinion.

A true copy.

Attest:

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