Swygert, Chief Judge, Hastings, Senior Circuit Judge, and Sprecher, Circuit Judge.
The plaintiff sought to state a diversity claim for relief based upon abuse of process in connection with three civil actions presently pending in the state courts of Illinois, in each of which one or more of the defendants are parties.
On September 9, 1969, George F. Barrett and L. Williams, members of Prudence Mutual Casualty Company, a domestic mutual insurance company incorporated in Illinois ("Prudence"), brought a derivative and class action in the Circuit Court of Cook County in case No. 69 CH 3231, against more than 40 defendants, including present and former officers and directors, their alleged nominees, and insurance agencies of Prudence, alleging several acts of mismanagement and misappropriation of assets of Prudence. Included as a defendant in his capacity as a director and officer of Prudence was Thomas S. Barrett, Sr., a brother of the plaintiff George Barrett. Also added as a defendant on September 23, 1969, was James A. Baylor as Director of Insurance of the State of Illinois, who was charged with wrongfully approving the disposition of Prudence's accident and health insurance business to Maine Insurance Company.
On October 1, 1969, Prudence was placed in rehabilitation and Baylor was named rehabilitator pursuant to state statute. On February 7, 1970, Prudence was placed in liquidation and Baylor was appointed liquidator pursuant to state statute.
On October 29, 1969, Thomas S. Barrett, Sr., moved to dismiss the complaint on the ground that under the Illinois Insurance Code only the director of insurance had the right to file a complaint concerning the conduct and affairs of Prudence.
In the meantime, American United Cab Association, Radio Cab Company and Solly Breitowich, as taxicab owners and operators who held public liability and property damage policies issued by Prudence, filed a derivative and class action against Thomas S. Barrett, George F. Barrett and other officers and directors of Prudence as case No. 69 CH 3837 in the Circuit Court of Cook County alleging acts of mismanagement and misappropriation of Prudence.
On January 23, 1970, American United Cab Association, Radio Cab Company and Solly Breitowich sought to intervene in 69 CH 3231 on the ground that one of the plaintiffs, George F. Barrett, formerly chairman of the board of Prudence, would not adequately represent the interests of other members of Prudence.
The Circuit Court judge consolidated cases 69 CH 3231 and 69 CH 3837. Subsequently, he granted intervention in Case 69 CH 3231 by the plaintiffs in 69 CH 3837 and thereupon dismissed 69 CH 3837.
Thereafter in April, 1970, the state court judge denied the motion of Thomas S. Barrett, Sr., to dismiss 69 CH 3231 on the ground that under the Illinois Insurance Code only the director could bring the action.
On May 25, 1970, Thomas S. Barrett, Sr., filed a motion for leave to file a petition for writ of mandamus in the Supreme Court of Illinois, alleging that the director of insurance had the exclusive right to prosecute causes of action on behalf of Prudence. The Supreme Court denied the motion on May 27, 1970.
On May 15, 1970, Universal Mutual Casualty Company ("Universal") filed a complaint in the Circuit Court of Cook County as case No. 70 CH 2135, verified by Thomas S. Barrett, Sr., as Secretary-Treasurer of Universal, against James A. Baylor as insurance director, alleging that the director was wrongfully withholding assets belonging to Universal. Director Baylor counterclaimed, alleging that Prudence and Universal had common officers, directors and facilities, that Thomas S. Barrett, Sr., and other officers and directors of Universal had committed numerous acts of malfeasance in connection with their joint operation of Prudence and Universal, that Universal was insolvent, and praying for the appointment of a liquidator for Universal.
On June 12, 1970, Thomas J. Barrett, Sr., filed the present complaint in the federal district court, alleging that Baylor, George F. Barrett, L. Williams, American United Cab Association, Radio Cab Company and Solly Breitowich conspired to bring cases 69 CH 3231, 69 CH 3837 and to counterclaim in 70 CH 2135, "well knowing that no authority exists in law for the maintenance of any representative actions by any person other than the Director of Insurance as provided by Statutes of the State of Illinois" in order to deprive Thomas S. Barrett, Sr., of his livelihood and to bring him into disrepute. The complaint described the alleged wrongdoing as "tortious abuse of the judicial process to inflict injury upon the plaintiff."
On July 24, 1970, the state court judge consolidated cases 69 CH 3231 and 70 CH 2135. Universal appealed from this order to the Illinois Appellate Court but the appeal was ...