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INSURER'S COURT PLEA REJECTED

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AUSTIN, Texas-A federal district court judge in Austin, Texas, has refused to permit Regina, Saskatchewan-based Crown Life Insurance Co. to transfer a case involving an estimated $50 million jury award to federal court from state court.

The insurer had argued that its partial ownership by a Saskatchewan government agency as of October means it should be regarded as a foreign state, making it subject to federal court jurisdiction (BI, Nov. 6, 1995).

In the case, a Texas state court jury found the insurer used deceptive life insurance sales practices.

A multi-district litigation panel will decide whether other cases brought against Crown life will appear in state or federal court.

However, Judge Bam Spark of the U.S. District Court in Austin, Texas, said in his Dec. 21 ruling that the federal court does not have jurisdiction because the state court jury verdict was handed down in September, and Crown Life did not become a foreign state until more than a month afterward.