Quackenbush

OVERVIEW

California Insurance Commissioner Chuck Quackenbush brought this action in his role as liquidator of the Mission Group of Insurance Companies (“Mission”) against Allstate Insurance Company (“Allstate”) to recover monies owed by Allstate to Mission under a number of reinsurance agreements. The core dispute between the parties centers on whether, under California insurance law, Allstate should be allowed to offset its obligations to Mission with debts owed by Mission to Allstate under other reinsurance agreements, or instead should be forced to pay its debts to Mission in full and then pursue its claims against Mission in ongoing state liquidation proceedings. For the last six years, however, the parties have been litigating to determine who will be permitted to decide the underlying questions of California state law. Allstate seeks arbitration pursuant to an arbitration clause in the insurance agreements. It therefore removed this action to federal court and asked the district court to order the parties to proceed to arbitration under the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1-14 . Quackenbush, however, wants the California courts to decide the dispute. Thus, he…