Safeguard Mut. Ins. Co. v. Comwlth. of Pa. ex rel. Maxwell, Civ. A. No. 42510.

• Decision Date: 30 June 1970
• Docket Number: Civ. A. No. 42510.
• Citation: 321 F. Supp. 996
• Parties: SAFEGUARD MUTUAL INSURANCE CO. v. COMMONWEALTH OF PENNSYLVANIA ex rel. David O. MAXWELL, Insurance Commissioner.
• Court: U.S. District Court — Eastern District of Pennsylvania

321 F. Supp. 996

SAFEGUARD MUTUAL INSURANCE CO. v. COMMONWEALTH OF PENNSYLVANIA ex rel. David O. MAXWELL, Insurance Commissioner.

Civ. A. No. 42510.

United States District Court, E. D. Pennsylvania.

June 30, 1970.

Malcolm W. Berkowitz, Philadelphia, Pa., Malcolm H. Waldron, Jr., Philadelphia, Pa., for plaintiff.

Frederick G. Antoun, Deputy Atty. Gen., Harrisburg, Pa., George F. Reed, Harrisburg, Pa., for defendant.

Before FREEDMAN, Circuit Judge, LORD, Chief District Judge and FULLAM, District Judge.

OPINION OF THE COURT

PER CURIAM.

On April 12, 1967, the Insurance Commissioner of Pennsylvania, acting pursuant to § 502 of the Insurance Department Act of 1921, as amended,¹ ordered the suspension of Safeguard Mutual Insurance Company and applied to the Common Pleas Court of Dauphin County for liquidation of the company. While the state court action was pending, the company brought the present action challenging the constitutionality of § 502 under the due process clause of the Fourteenth Amendment. This three-judge court was accordingly constituted.

On May 31, 1967, we entered an order staying proceedings in this case "until the final determination of the proceedings" in the state court. The Common Pleas Court on September 25, 1969, entered a nisi order in which it denied the Commonwealth's petition for the appointment of a statutory liquidator and granted the company's petition to vacate the suspension order. Commonwealth ex rel. Maxwell v. Safeguard Mutual Insurance Co., 91 Dauph. 305 (1969). Numerous exceptions were filed, which the court dismissed on April 14, 1970, 92 Dauph. 307. It did not rule on the constitutionality of the statute since it granted relief on factual grounds, and its decision is still subject to appeal.

Plaintiff has already filed five unsuccessful motions to dissolve our stay order, the last of which we denied on June 5, 1970.² At that time, we noted that the factual basis of the original complaint had been resolved in the company's favor and although the decision was subject to appeal by the Commonwealth, the possibility of reversal on appeal was not an adequate basis for the termination of our stay order. We also noted the company's added claim that the Insurance Commissioner was conducting a new examination of its business, which the Commissioner claimed was a regular one, but we pointed out that the Pennsylvania appellate courts might yet reach the issue of the constitutionality of the statute, so that our stay order...