The opinion of the court was delivered by: ROVNER
ILANA DIAMOND ROVNER, UNITED STATES DISTRICT JUDGE
This is an interpleader action involving rights to the proceeds of a state court judgment obtained against the stakeholder, General Railway Signal Company ("General Railway"), by American Fidelity Fire Insurance Company ("AFFI"). AFFI now is in liquidation and is represented by James P. Corcoran, the Superintendent of Insurance of the State of New York (the "Superintendent"). The claimants named in plaintiff's original complaint were the Superintendent and the United States Small Business Administration ("SBA"). In its opinion of October 1, 1990, the Court granted the motion of Antonow & Fink, a Chicago law firm, to intervene as a third defendant and claimant to the proceeds of the state court judgment. See General Railway Signal Co. v. Corcoran, 748 F. Supp. 639, 647-48 (N.D. Ill. 1990).
This interpleader action was originally brought pursuant to 28 U.S.C. § 1335, which provides the Court with jurisdiction over interpleader cases in which at least two claimants are of diverse citizenship. 28 U.S.C. § 1335(a)(1). On December 19, 1989, the Court granted General Railway's motion for a temporary restraining order pursuant to 28 U.S.C. § 2361 and enjoined the Superintendent from attempting to collect the Illinois judgment.
On March 21, 1990, the Court denied the Superintendent's motion to dismiss the case on the basis that the requirements of diversity jurisdiction were not satisfied. General Railway Signal Co. v. Corcoran, 735 F. Supp. 265 (N.D. Ill. 1990). The Court found that the SBA was a citizen of the District of Columbia and that, therefore, diversity jurisdiction existed pursuant to 28 U.S.C. § 1335.
The Superintendent filed an interlocutory appeal of the Court's March 21 order which found that the diversity of citizenship requirement of 28 U.S.C. § 1335 had been satisfied. The Seventh Circuit issued its ruling in that appeal on January 3, 1991. General Railway Signal Co. v. Corcoran, 921 F.2d 700 (7th Cir. 1991). The Court of Appeals reversed this Court and held that the SBA was not a citizen of any state, and that, accordingly, this Court lacked diversity jurisdiction pursuant to 28 U.S.C. § 1335. Id. 748 F. Supp. at 702. The Court of Appeals did find, however, that this Court has jurisdiction pursuant to 15 U.S.C. § 634(b)(1), which creates specific federal question jurisdiction over contract claims against the SBA. Id. 748 F. Supp. at 705.
Because the Court of Appeals held that this Court has jurisdiction pursuant to 15 U.S.C. § 634(b)(1) and because this Court currently finds that it again has diversity jurisdiction pursuant to 28 U.S.C. § 1335 after the intervention of Antonow & Fink, this case theoretically can proceed. Indeed, the issues which the Court of Appeals proceeded to determine were apparently moot when the case was appealed in light of Antonow & Fink's presence in the case. In the course of its opinion, however, the Court of Appeals also discussed at some length the abstention issue which this Court had decided in its October 1, 1990 opinion. The Court of Appeals' discussion of that issue caused this Court to reconsider on its own motion the Superintendent's motion for summary judgment on the grounds of abstention. It is the abstention issue which is currently before the Court.
This Court is somewhat perplexed by the Court of Appeals' discussion of the abstention issue. The Court of Appeals emphasized that abstention involves factual determinations which it was not in a position to make based upon the appellate record, and that it therefore would not rule on abstention. For example, the Court of Appeals stated that the abstention issue "necessitates a fact-specific inquiry" and that the Court did "not have the benefit of facts or briefs which might allow it to come to a reasoned decision on the abstention issue." General Railway, 921 F.2d at 705. However, the Court of Appeals then proceeded to clearly indicate that this Court should abstain. Accordingly, in view of its duty to follow the law of this Circuit, this Court has no choice but to vacate that portion of its October 1, 1990 opinion which addresses the abstention issue and to dismiss the case on the ground of abstention.
With respect to the first factor set out above, the Court of Appeals stated that "this case involves questions of contract interpretation which are governed by state law." General Railway, 921 F.2d at 709. Although the Court of Appeals recognized that federal issues may also be involved, it noted that "a federal court may abstain even from a case posing mixed federal and state law issues." Id. Although the Court of Appeals purported to "leave it to the district court to weigh the relative importance of federal and state law issues in this interpleader action" ( id. at 709), this Court had already performed that weighing in its October 1, 1990 opinion. The Court of Appeals was aware of that fact because it cited to this Court's opinion in its own opinion. Id. at 707-08. Thus, the Court can only infer from the Court of Appeals' comments that it disagrees with the result of the weighing process conducted by this Court.
With respect to the second factor, the extent of the intrusion on the state liquidation proceedings, the Court of Appeals recognized that "one could argue [as this Court had held] that a federal court action in which the bankrupt insurer is interpled is less intrusive on the state liquidation proceedings than a direct claim against the assets of the insurer" because an interpleader action "does not involve taking an existing asset of the insurer." Id. at 709. The Court of Appeals indicated, however, that it disagreed with this theory. Specifically, the Court of Appeals doubted whether "any distinction between existing assets of the insurance company, over which litigation must be carried out in a ...