forum could adequately protect the rights of all parties. General Railway, 748 F. Supp. at 646. This Court noted that although any of the above factors, taken alone, may be insufficient to compel the exercise of federal jurisdiction, "their combination in one case makes abstention inappropriate." Id.
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 state-created liquidation process, and possible claims of the company to assets in the hands of others, over which litigation can proceed in any federal district court, can be supported." Id.
Moreover, the Court of Appeals held that this case presents an even "stronger rationale for abstention" because of the possibility that the SBA would be entitled to the fund only after it becomes an asset of the insurer -- an argument which this Court had rejected in its October 1, 1990 opinion. Id. at 709-10; see also General Railway, 748 F. Supp. at 648-49. The Court of Appeals emphasized that there is "a comprehensive New York state scheme for insurance regulation and liquidation" ( General Railway, 921 F.2d at 708), that this litigation "arguably threatens to frustrate the Superintendent's efforts to collect the assets of the now-bankrupt insurance company" (id.), and that "to deprive the Superintendent of the power to have his claims against others litigated in the New York liquidation proceeding would prevent the Superintendent from executing half of his job." Id. at 709. It is clear, therefore, that the Court of Appeals disagreed with the second factor relied upon by this Court and that it in fact believed that the present interpleader action interfered with the New York liquidation proceeding.
In light of the Court of Appeals' express disagreement with the majority of this Court's reasoning in refusing to abstain, the Court now finds that it must abstain. As the Court of Appeals noted, this Court may "choose either to dismiss the case outright or stay the federal proceeding so as to preserve the court's ability to resolve any federal law issues which are not addressed by the state court." Id. at 709-10. At this stage, the Court sees no purpose in retaining jurisdiction. If federal issues arise which are not resolved by the state court, a new action may be brought. The case shall be dismissed on the ground of abstention.
The Court, having reconsidered on its own motion the Superintendent's motion for summary judgment on the grounds of abstention, grants the Superintendent's motion for the reasons set forth above. This Court will abstain. Accordingly, the case will be dismissed without prejudice.