                            PUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT


FIRST PENN-PACIFIC LIFE INSURANCE       
COMPANY,
                 Plaintiff-Appellant,
                 v.
WILLIAM R. EVANS, Chartered;
MARYLAND FIRST FINANCIAL SERVICES
                                               No. 01-2218
CORPORATION,
             Defendants-Appellees.
MARYLAND SECURITIES COMMISSION,
                   Amicus Curiae.
                                        
           Appeal from the United States District Court
            for the District of Maryland, at Baltimore.
           Alexander Harvey II, Senior District Judge.
                          (CA-01-680-H)

                         Argued: May 7, 2002

                      Decided: September 18, 2002

     Before WILKINSON, Chief Judge, and NIEMEYER and
                  LUTTIG, Circuit Judges.



Affirmed by published opinion. Chief Judge Wilkinson wrote the
majority opinion, in which Judge Niemeyer joined. Judge Luttig
wrote a dissenting opinion.


                              COUNSEL

ARGUED: Derek Barnet Yarmis, FUNK & BOLTON, P.A., Balti-
more, Maryland, for Appellant. Paul Stephen Caiola, GALLAGHER,
2                  FIRST PENN-PACIFIC LIFE v. EVANS
EVELIUS & JONES, L.L.P., Baltimore, Maryland, for Appellee
Maryland First Financial Services Corporation. Lucy Adams Car-
dwell, Assistant Attorney General, Baltimore, Maryland, for Amicus
Curiae. ON BRIEF: Lee Ann Lezzer, FUNK & BOLTON, P.A., Bal-
timore, Maryland, for Appellant. Thomas C. Dame, GALLAGHER,
EVELIUS & JONES, L.L.P., Baltimore, Maryland, for Appellee
Maryland First Financial Services Corporation. J. Joseph Curran, Jr.,
Attorney General of Maryland, Katharine M. Weiskittel, Staff Attor-
ney, Baltimore, Maryland, for Amicus Curiae.


                              OPINION

WILKINSON, Chief Judge:

   First Penn-Pacific Life Insurance Company sought rescission of a
life insurance policy, alleging fraud. Maryland First Financial Corpo-
ration intervened as the receiver for Answer Care, Inc., a viatical set-
tlement company, because the policy was a claimed asset of the
receivership estate. The receiver filed a motion to dismiss, arguing
that Burford abstention was appropriate to avoid interfering with the
receivership proceedings pending in state court. See Burford v. Sun
Oil Co., 319 U.S. 315 (1943). The district court agreed and dismissed
the case. Because the district court’s ruling was not an abuse of dis-
cretion, we affirm.

                                   I.

   First Penn-Pacific Life Insurance Company sued William R. Evans,
Chartered in federal district court, seeking rescission of a life insur-
ance policy. The insurer issued the policy to Stanley Moore in Janu-
ary 1998, and Moore assigned it to Evans two months later. First
Penn-Pacific alleged that in applying for the policy, Moore fraudu-
lently misrepresented material facts regarding his family circum-
stances, his health, and the amount of other life insurance that he
owned. The insurer further claimed that the policy was invalid
because it was not purchased to protect a legally insurable interest.
First Penn-Pacific asked the district court to declare the policy void
ab initio.
                   FIRST PENN-PACIFIC LIFE v. EVANS                    3
   Evans served as escrow agent for Answer Care, Inc. Answer Care
had been engaged in consummating "viatical settlements." It would
solicit investors to purchase interests in life insurance policies issued
to individual "viators" who were diagnosed as having terminal ill-
nesses after being issued the policies. Evans owned bank accounts
holding the funds of Answer Care’s investors, and owned the policies
purchased by the investors.

   Pending in the Circuit Court for Baltimore City is an action
brought by the Maryland Securities Commissioner against Answer
Care and Mark Massoni, its owner and president. See Lubin v. Answer
Care, Inc., Case No. 24-C-00-004710 (Cir. Ct. Balt. City). The Com-
missioner alleged that Answer Care: (1) sold securities in violation of
the Maryland Securities Act, Md. Code Ann., Corps. & Ass’ns, § 11-
101 et seq.; (2) committed fraud by selling interests in life insurance
policies that were obtained through fraudulent applications, and that
were canceled by insurers because of this fraud; and (3) had no inde-
pendent escrow agent to manage the policies sold to investors. The
Commissioner sought an injunction, the appointment of a receiver,
restitution, and civil penalties.

   The Circuit Court froze Answer Care’s assets, enjoined the com-
pany from selling interests in life insurance policies, and appointed
Maryland First Financial Corporation to be the receiver for Answer
Care. The court directed the receiver to manage Answer Care’s busi-
nesses for the purpose of protecting and distributing its assets. The
receiver was authorized to recover assets for investors by filing claims
against insiders, recipients of preferential treatment, and those who
illegitimately received investor funds.

   In addressing the question of the beneficial ownership of the life
insurance policies at issue, the Circuit Court appointed counsel to
represent the interests of Answer Care’s investors. Counsel was
directed to argue that the ownership of the policies, and the refunded
premium payments for canceled policies, should be apportioned
among the investors who had been promised a share of the policies’
death benefits. Likewise, the receiver argued below that the instant
policy’s $2,000,000 in death benefits (or its refunded premiums)
should go to Answer Care’s creditors, and to paying the expenses
associated with administering the estate.
4                   FIRST PENN-PACIFIC LIFE v. EVANS
   After the district court granted its motion to intervene, the receiver
filed a motion to dismiss, arguing that Burford abstention was neces-
sary to avoid interfering with the receivership proceedings in the Cir-
cuit Court. The receiver claimed that continuing this action would
undermine the integrity of several Circuit Court orders, and would
hinder its efforts to distribute Answer Care’s assets. It further asserted
that the state’s interests were paramount, that the instant policy was
a substantial asset of the receivership estate, and that the state had ini-
tiated a comprehensive scheme for administering all of Answer
Care’s assets.

   First Penn-Pacific responded that abstention was inappropriate
because Burford applied only when a federal case would interfere
with proceedings or orders of a state administrative agency. The
insurer asserted that the Commissioner’s action against Answer Care
was merely litigation between private parties, not a proceeding of a
state agency. It claimed that the district court was obligated to hear
the case because Maryland had yet to set up an administrative scheme
directly addressing viatical settlements.

  The district court agreed with the receiver that Burford abstention
was appropriate to avoid interfering with the state receivership pro-
ceeding. See Brandenburg v. Seidel, 859 F.2d 1179, 1192 n.16 (4th
Cir. 1988). It thus dismissed the complaint without prejudice. First
Penn-Pacific appeals.

                                    II.

                                    A.

   We may not disturb a district court’s decision to abstain under Bur-
ford unless we find an abuse of discretion. See Pomponio v. Fauquier
County Bd. of Supervisors, 21 F.3d 1319, 1324 (4th Cir. 1994); Rich-
mond, Fredericksburg & Potomac R.R. Co. v. Forst, 4 F.3d 244, 250-
51 (4th Cir. 1993); Brandenburg, 859 F.2d at 1195. That standard is
a deferential one. A district court ruling may be a permissible exercise
of discretion, even if an appellate court suspects that it might have
                    FIRST PENN-PACIFIC LIFE v. EVANS                    5
ruled otherwise in the first instance. Thus mindful of the standard of
review, we proceed to the analysis of the trial court’s decision.1

                                    B.

   As the district court recognized, a federal court’s exercise of discre-
tion in deciding whether to invoke Burford abstention "must reflect
principles of federalism and comity." Quackenbush v. Allstate Ins.
Co., 517 U.S. 706, 728 (1996) (internal quotation omitted). These
constitutional commitments require federal courts to "exercise their
discretionary power with proper regard for the rightful independence
of state governments in carrying out their domestic policy." Burford,
319 U.S. at 318 (internal quotation omitted). Courts should abstain
from deciding cases presenting "difficult questions of state law bear-
ing on policy problems of substantial public import whose importance
transcends the result in the case then at bar," or whose adjudication
in a federal forum "would be disruptive of state efforts to establish a
coherent policy with respect to a matter of substantial public con-
cern." New Orleans Pub. Serv., Inc. v. Council of New Orleans, 491
U.S. 350, 361 (1989) ("NOPSI") (quoting Colorado River Water Con-
servation Dist. v. United States, 424 U.S. 800, 814 (1976)). Absten-
tion is also "the exception, not the rule." Colorado River, 424 U.S. at
813.

   The Supreme Court’s decisions "do not provide a formulaic test for
determining when dismissal under Burford is appropriate." Quacken-
bush, 517 U.S. at 727. Nevertheless, the general concern that should
inform a federal court’s discretion is clear enough:

      Ultimately, what is at stake is a federal court’s decision,
      based on a careful consideration of the federal interests in
      retaining jurisdiction over the dispute and the competing
      concern for the "independence of state action," Burford, 319
      U.S., at 334, that the State’s interests are paramount and that
      a dispute would best be adjudicated in a state forum.
  1
   To read the dissent, one would think that Burford abstention was a
"require[ment]" in this case. Post at 10. Our holding is simply that the
district court did not abuse its discretion in abstaining here.
6                  FIRST PENN-PACIFIC LIFE v. EVANS
Id. at 728.

                                   III.

   In view of this governing law, we cannot conclude that the district
court abused its discretion in declining to exercise its jurisdiction over
this case. As in Brandenburg, this dispute implicates an entity placed
into receivership by order of a state court. In concluding that Bran-
denburg "present[ed] a classic situation for Burford abstention," we
relied upon the fact that Maryland had set up a comprehensive
scheme for liquidating insolvent state-chartered savings and loan
associations, and that rehabilitating the industry was indisputably a
matter of substantial state concern. 859 F.2d at 1191. Though Answer
Care was not a savings and loan, it nevertheless is subject to a highly
regulated state process involving the liquidation of its assets.

   The Commissioner is the principal executive officer of the Mary-
land Division of Securities. She is vested with the authority to enforce
the Maryland Securities Act. § 11-201. The Act authorizes the Com-
missioner to bring an action in state court whenever any person has
violated or is about to violate the Act or its implementing regulations.
The Commissioner may, as she did in the Circuit Court here, seek
injunctive relief, civil penalties, and the appointment of a receiver or
conservator for the defendant or the defendant’s assets. See § 11-702.
The Circuit Court’s decisions are appealable. See Md. Code Ann.,
Courts & Judicial Proceedings, § 12-101 et seq.

   When the Commissioner asks the state court to appoint a receiver,
she typically requests, as she did here, that the receiver be given all
of the powers and responsibilities set forth in Title 13 of the Maryland
Rules. Under Rule 13-101, the receiver is appointed by the court to
administer the debtor’s estate. Title 13 further provides that the
receiver: (1) shall mail a notice to creditors, Rule 13-202; (2) may set-
tle claims relating to the estate with the court’s approval, Rule 13-
403; (3) shall file reports with the court, Rule 13-501; and (4) shall
make a final distribution to creditors, Rule 13-503.

   The district court reasonably viewed this highly regulated state pro-
cess to be "a matter of substantial public concern." NOPSI, 491 U.S.
at 361 (quoting Colorado River, 424 U.S. at 814). The receivership
                    FIRST PENN-PACIFIC LIFE v. EVANS                       7
proceeding in the Circuit Court resulted from a securities fraud of sig-
nificant proportions. As stated in the order granting appointment of
a receiver, the Commissioner forced Answer Care into receivership
"to prevent the risk of further loss of investor funds, to protect the
public interest and to avoid the harm that will result from a continuing
violation of the Maryland Securities Act." The state has a substantial
interest in preventing further harm to the public, and in providing
investors with some compensation so that the scam does not leave
them completely high and dry.

   Allowing this action to continue in federal court would severely
complicate the efficient dissolution of Answer Care’s estate. We
would be inviting litigation in fora all around the country over other
Answer Care policies that may come under attack. Sprinkling these
disputes all over the place constitutes an inefficient way to handle the
significant public problem that Answer Care’s fraud has created. The
receiver’s funding to cover such litigation expenses comes from the
estate itself. And as the litigation and administrative costs mount, the
size of Answer Care’s assets shrinks. If the receiver is forced to
defend in fora around the nation, the time may come when the victims
of the company’s fraud will not be able to obtain their due.

   Our dissenting brother does not dispute the district court’s judg-
ment that major inefficiencies, inconsistencies, and depletions of the
receivership estate would be caused by litigating individual actions at
different points around the country. This economic reality informs our
view that "[t]he liquidation process in particular is one which would
be greatly impeded by the involvement of more than one decision-
making authority." Brandenburg, 859 F.2d at 1191.2 And it is a criti-
cal reason why federal courts have frequently abstained to avoid inter-
fering with state receivership proceedings. See Clark v. Fitzgibbons,
105 F.3d 1049, 1051 (5th Cir. 1997) ("[P]ermitting these plaintiffs to
proceed in federal court in Texas would start a race to the courthouse
in any jurisdiction where claims against ABC might have arisen. The
administrative structure established by Arizona to rehabilitate or liqui-
  2
    To extract from the rather specialized setting of state receivership pro-
ceedings the notion that Burford abstention would be "required in virtu-
ally every diversity case by today’s opinion," see dissenting opinion, post
at 10, goes beyond hyperbole.
8                  FIRST PENN-PACIFIC LIFE v. EVANS
date insolvent insurers would swiftly crumble."); cf. Charleston Area
Med. Ctr. v. Blue Cross & Blue Shield Mut. of Ohio, 6 F.3d 243, 250
n.5 (4th Cir. 1993) ("[A receivership case that implicates a complex
state statutory scheme] presents precisely the type of litigation in
which federal courts should carefully consider abstaining."). Such
cases are legion. See, e.g., Feige v. Sechrest, 90 F.3d 846 (3d Cir.
1996); Wolfson v. Mut. Ben. Life Ins. Co., 51 F.3d 141 (8th Cir.
1995); Grimes v. Crown Life Ins. Co., 857 F.2d 699 (10th Cir. 1988);
Law Enforc. Ins. Co. v. Corcoran, 807 F.2d 38 (2d Cir. 1986); Easter
v. Am. West Fin., 202 F. Supp. 2d 1150 (W.D. Wash. 2002); Rewerts
v. Reliance Ins. Co., 170 F. Supp. 2d 847 (C.D. Ill. 2001); In re Uni-
verse Life Ins. Co., 35 F. Supp. 2d 1297 (D. Kan. 1999).

   Federal courts also have abstained in such situations to allow for
the consistent dissolution of the receivership estate. The district court
permissibly concluded that continuing this action would be inappro-
priate because it would infringe upon orders previously entered by the
Circuit Court. See id. at 1192. The Circuit Court enjoined Answer
Care from impairing any assets obtained with funds that came from
the sale of viatical settlements. It further ordered the receiver to pro-
tect and recover Answer Care’s assets through whatever steps were
necessary. In addition, the court ordered all parties before it to brief
the issue of who had the beneficial ownership of the life insurance
policies at issue. And in a scheduling order, the receiver was directed
to file in the Circuit Court "any claims it intends to pursue related to
the pending receivership" because the court "intends to accept special
assignment of all claims related to the receivership."

   Further, the Commissioner brought to our attention in her Brief as
Amicus Curiae that a conflict between the Circuit Court and district
court proceedings has already arisen. First Penn- Pacific argued below
that the receiver had no legal interest in the policy in question and
thus no right to intervene. The Circuit Court later concluded, how-
ever, that the receiver was the beneficial owner of all policies sold
through Answer Care. Regardless of the resolution of this issue on
appeal, it shows that the present situation is rife with the potential for
conflict.

   More generally, litigants quite possibly could bring the same
claims controlled by the same state’s law, and yet come away with
                   FIRST PENN-PACIFIC LIFE v. EVANS                     9
different results, as various courts might see things differently. In
terms of the money that Answer Care’s investors hope to recover, it
matters a great deal whether a given policy is valid, in which case
they are entitled to the death benefits, or whether it is invalid, in
which case they will only obtain the refunded premium payments.
Thus, the district court acted within its discretion in abstaining to
avoid "disrupt[ing] the state’s efforts to provide a unified method for
. . . liquidation." Brandenburg, 859 F.2d at 1191; see also Quacken-
bush, 517 U.S. at 717-18.

   Relying upon NOPSI, First Penn-Pacific claimed below that Bur-
ford abstention should be invoked only to avoid interfering with an
ongoing state administrative proceeding. However, the Circuit Court
proceeding was brought by the Commissioner in her capacity as head
of a state administrative agency, and it resulted in orders being issued
against the company at her request. Assuming arguendo that Burford
abstention is limited to cases involving the proceedings and orders of
state administrative agencies,3 the Answer Care receivership case is
such a proceeding because it was brought by a state agency. First
Penn-Pacific sought to avoid Burford in the court below by mis-
characterizing the receivership action as a private dispute over a viati-
cal settlement company’s conduct. But as the district court found, that
action "is in fact a proceeding instituted by a state agency to enforce
state securities and insurance laws pertaining to the issuance, assign-
ment and sale of life insurance policies."

   Finally, it is relevant that the relief previously obtained by the
Commissioner was granted by the Circuit Court pursuant to state law,
and that relief is being administered in accordance with the Maryland
Securities Act and state receivership procedures. State law also con-
trols the instant dispute over the validity of a policy that may be a
substantial asset of the receivership estate. Similarly, Answer Care’s
business involved the insurance industry, which the states are primar-
  3
   The Supreme Court in NOPSI did discuss Burford abstention in the
context of state administrative proceedings, but the Court has since
addressed Burford abstention in the absence of a state administrative pro-
ceeding. See Quackenbush, 517 U.S. at 723-31. Indeed, the Quackenbush
Court omitted the reference to state administrative proceedings in quot-
ing the relevant passage from NOPSI. See id. at 726-27.
10                 FIRST PENN-PACIFIC LIFE v. EVANS
ily responsible for regulating. See 15 U.S.C. § 1011. Although hardly
dispositive in itself, the largely local and highly regulated character
of this industry further counsels us to respect the Circuit Court receiv-
ership proceeding. See, e.g., Burford, 319 U.S. at 318-20, 327-34.

                                  IV.

   In sum, the district court’s ruling here was not an abuse of discre-
tion. Its judgment is

                                                           AFFIRMED.

LUTTIG, Circuit Judge, dissenting:

   As I have written previously, I believe that in recent years our Cir-
cuit has progressively charted its own course in the area of federal
court abstention, a course quite different from that required of us by
congressional statute and by Supreme Court precedent. See Johnson
v. Collins Entertainment Co., 199 F.3d 710, 730 (1999) (Luttig, J.,
concurring in judgment) (explaining that the majority, though reach-
ing the correct result, worked a substantive change in the law of
abstention). This case, decided by the same panel that decided John-
son, highlights well just how far my colleagues have gone in convert-
ing what is intended as "an extraordinary and narrow exception" to
our duty to decide cases otherwise properly before us, Quackenbush
v. Allstate Ins. Co., 517 U.S. 706, 728 (1996) (internal citations omit-
ted), into almost a rule of obligatory federal abstention, independent
of whether there exists either an imperative or peculiar need for state
court adjudication. For, at least on a principled application, Burford
abstention would be required in virtually every diversity case by
today’s opinion, a result supported by no authority, not even those in
our Circuit, and certainly none of those relied upon by the majority.

   In the precedents that are relied upon by my colleagues, the pres-
ented issue was one already pending in some department within a
comprehensive state regulatory scheme comprised of "a variety of
legislative, administrative and judicial mechanisms," Johnson, 199
F.3d at 715, that was created in response to something like "as thorny
a problem as has challenged the ingenuity and wisdom of legisla-
                    FIRST PENN-PACIFIC LIFE v. EVANS                    11
tures," Burford v. Sun Oil Co., 319 U.S. at 318, 324 (1943) (grants
of permits for drilling of oil fields in Texas, where "an additional per-
mit may affect pressure on a well miles away"), to "a state of public
crisis," that necessitated an emergency legislative session, Branden-
burg (state’s savings and loan industry), or to "arguably . . . the most
hotly contested issue in [that particular state] in recent years," John-
son, 199 F.3d at 715 (video poker). And, in all of these cases, the
issue was "imbued with sufficient local character that the state courts
ought [have been] accorded comity from the federal courts with
respect to its regulation." Johnson, 199 F.3d at 731 (Luttig, J., concur-
ring in judgment). Neither of these sine qua non for federal abstention
exists in the case before us today. Indeed, this is as garden-variety a
diversity case as one could imagine, indisputably requiring, under
statute and established Supreme Court caselaw, federal court adjudi-
cation.

    Betraying the dearth of authority available to support the court’s
broad-gauged expansion of Burford’s limited exception, the majority
portrays this case as closely analogous to Brandenburg v. Seidel, 859
F.2d 1179 (4th Cir. 1988). The actual facts underlying our decision
in Brandenburg reveal that that case is anything but support for the
majority’s conclusion; indeed, if anything, Brandenburg is affirma-
tive authority for precisely the opposite conclusion from that reached
by the majority. As we explained in Brandenburg, there, the Gover-
nor of Maryland, in response to a panic that threatened to lead to the
collapse of the state’s savings and loan industry, literally declared a
state of public crisis; issued an executive order limiting withdrawals
to $1,000 per account per month from all Maryland Savings-Share
Insurance Corporation institutions; and called the Maryland General
Assembly into an emergency session. The Assembly in turn enacted
a package of legislation, establishing "a comprehensive framework
for the administration of conservatorship and receivership proceed-
ings for insolvent savings and loan associations." Brandenburg, 859
F.2d at 1182. That legislation created a state-operated deposit insur-
ance fund, the Maryland Deposit Insurance Fund, which had "exclu-
sive and plenary jurisdiction over all claims, actions, and proceedings
. . . brought by any person and . . . related to the assets, property, pow-
ers, privileges, duties and liabilities" of the savings and loan institu-
tion in question. As we observed, that legislation was "designed to
12                 FIRST PENN-PACIFIC LIFE v. EVANS
deal comprehensively with the crisis in the state’s savings and loan
industry." Id.

   By contrast, the receivership here is of the most unexceptional
kind. It did not arise out of a public crisis, though Maryland certainly
knows how to declare one, and it certainly is not the product of spe-
cial legislative session. Neither did it originate from a distinct and
comprehensive mechanism created to address the problem of viatical
settlement fraud that faces the Answer Care receivership. As the
majority correctly (though inconsistently with its own conclusion)
remarks, this receivership is governed by Title 13 of the Maryland
Rules of Court, which applies to virtually all receivership proceed-
ings, see Md. R. Ct. 13-102, legislation the like of which is common-
place in every state in the Union. And, unlike the threat represented
by the imminent collapse of the entire savings and loan industry,
which was addressed by the legislation in Brandenburg, viatical set-
tlement fraud, though no doubt a problem, has not prompted any
heated public debate at all, much less any of the type which, in turn,
gave rise to "the complex administrative system that [the state] had
established," in Burford, whose very purpose was being threatened by
parallel federal litigation. Compare with Burford, 319 U.S. at 332
("The whole cycle of federal-state conflict cannot be permitted to
begin again.").

   By holding that the receivership we consider in this case is, for pur-
poses of Burford abstention, analogous to the one in Brandenburg,
and hence, that abstention is warranted, the majority has, as I pre-
dicted in Johnson, all but completed its transformation of Burford’s
exception to decision into an exception to abstention, in open depar-
ture from our "virtually unflagging obligation . . . to exercise [the]
jurisdiction" conferred upon us by Congress, Colorado River Water
Conservation Dist. v. United States, 424 U.S. 800, 821 (1976). See
Johnson, 199 F.3d at 730 (Luttig, J., concurring) (noting that the
majority was affecting "a substantive change in the law of abstention
from a doctrine of exception to a doctrine of rule"). Such is the
ineluctable consequence of the elevation of a state’s everyday interest
in "preventing further harm to the public, and in providing investors
with some compensation so that the scam does not leave them com-
pletely high and dry" to a "substantial" interest for abstention pur-
poses, ante at 7, and of the countenance of abstention on nothing
                    FIRST PENN-PACIFIC LIFE v. EVANS                    13
more than the mere (and unidentified) potential for conflict with state
regulatory law or policy.

   As Congress has required by statute, and the Supreme Court has
required by decision, I would require the district court to decide this
dispute, which was properly before that court for decision. There is
no imperative or peculiar need for state court adjudication. Although
it has again fallen on deaf ears, I can only repeat what I said in John-
son: "It is not our[ duty] either to interpret the [jurisdictional] statute
narrowly or to expand our own judicial engraftations because we dis-
agree with the Congress that our doors should be open to such dis-
putes." Johnson, 199 F.3d at 729 (Luttig, J., concurring in judgment).
