Louie v. California Judical Council et al

Filing 36

ORDER signed by Judge John A. Mendez on 11/10/11 ORDERING that the Court GRANTS the Motion to Refer This Case to the United States Bankruptcy Court, Eastern District of California. CASE CLOSED. (cc USBC)(Becknal, R)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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GEORGE S. LOUIE,

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Plaintiff,

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v.

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CALIFORNIA JUDICIAL COUNCIL,
SACRAMENTO COUNTY SUPERIOR
COURT, et al.,

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Defendants.

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Case No. 2:10-CV-02530 JAM-KJN (
ORDER GRANTING TRUSTEE’S
MOTION TO REFER THIS CASE TO
THE UNITED STATES BANKRUPTCY
COURT, EASTERN DISTRICT OF
CALIFORNIA

This matter comes before the Court as a Motion to Refer this

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Case to the United States Bankruptcy Court, Eastern District of

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California (Doc. #23) presented by Alan S. Fukushima (“the Trustee”

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or “Mr. Fukushima”), Chapter 7 Trustee in the bankruptcy case In re

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Louie, United States Bankruptcy Court, Eastern District of

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California, Case No. 11-25036-C-7.

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Council and Sacramento County Superior Court (“Defendants”) oppose

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the motion (Doc. #31).1

Defendants California Judicial

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This motion was determined to be suitable for decision without
oral argument. E.D. Cal. L.R. 230(g). The hearing was scheduled
for November 10, 2011.
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FACTUAL AND PROCEDURAL BACKGROUND

On September 20, 2010, Plaintiff George S. Louie (“The Debtor”

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or “Mr. Louie”) filed the instant case.

He alleges that Defendants

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failed to accommodate his disability in violation of the Americans

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with Disabilities Act (“ADA”) of 1990, California Civil Code

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Sections 54 and 54.1, and the California Unruh Civil Rights Act.

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On February 28, 2011, Mr. Louie was placed into involuntary

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bankruptcy pursuant to Title 11 U.S.C. § 303: In re George S.

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Louie, United States Bankruptcy Court, Eastern District of

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California, Case No. 11-25036-C-7 (the “Involuntary Bankruptcy

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Case”).

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for relief.

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On March 30, 2011, the Bankruptcy Court entered an order
Mr. Fukushima was appointed as Chapter 7 Trustee.

On April 1, 2011, Mr. Louie filed a voluntary bankruptcy case:

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In re George Sing Louie, United States Bankruptcy Court, Eastern

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District of California, Case No. 2011-28344 (the “Voluntary

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Bankruptcy Case”).

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On May 31, 2011, the Bankruptcy Court consolidated the

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Involuntary Bankruptcy Case and the Voluntary Bankruptcy Case as

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Case No. 11-250360C-7 (the “Bankruptcy Case”) and appointed Mr.

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Fukushima as the Chapter 7 Trustee of the consolidated cases.

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Through the Trustee’s investigation, he discovered that the

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Debtor has more than 80 cases pending in various California state

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courts and federal district courts.

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allege that defendants failed to accommodate Mr. Louie’s disability

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in violation of the ADA.

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by the Trustee, this Court issued a related case order (Doc. #28)

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relating eleven other ADA cases pending before the district court,

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all before this Court.

Most or all of the cases

On September 22, 2011, upon application

The Trustee now moves to refer this case to
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the Bankruptcy Court (Doc. #23).

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Counsel and Sacramento County Superior Court oppose the motion

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(Doc. #31).

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Trustee’s Motion (Doc. #33).

Lien Claimant Cable Gallagher does not oppose the

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II.
A.

Defendants California Judicial

OPINION

Legal Standard
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Referral to Bankruptcy Court

28 U.S.C. § 1334(b) provides that federal courts shall have

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“original but not exclusive jurisdiction of all civil proceedings

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arising under title 11, or arising in or related to a case under

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title 11.”

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Supreme Court described the scope of “related to” jurisdiction

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under Section 1334(b):

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In Celotex Corp. v. Edwards, 514 U.S. 300 (1995), the

Proceedings “related to” the bankruptcy include
(1) causes of action owned by the debtor which become
property of the estate pursuant to 11 U.S.C. § 541,
and (2) suits between third parties which have an
effect on the bankruptcy estate.
Celotex Corp., 514 U.S. at 308 n. 5.

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Where the cause of action is not property of the estate in

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bankruptcy, courts in the Ninth Circuit utilize the Pacor test.

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The Pacor test considers “whether the outcome of that [civil]

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proceeding could conceivably have any effect on the estate being

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administered in bankruptcy.”

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994 (1984).

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courts consider “the efficient use of judicial resources, delay and

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costs to the parties, uniformity of bankruptcy administration, the

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prevention of forum shopping, and other related factors” when

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deciding whether to refer cases to the Bankruptcy Court.

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Farms v. International Brotherhood Of Teamsters, Chauffeurs,

Pacor, Inc. v. Higgins, 743 F.2d 984,

Additionally, the Ninth Circuit suggests district

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Security

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Warehousemen & Helpers, an Unincorporated Ass’n., 124 F.3d 999,

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1008 (9th Cir. 1997).

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B.

Claims for Relief

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The Trustee asks the Court to refer this case to the

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Bankruptcy Court because the instant case is property of the

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bankruptcy estate pursuant to 11 U.S.C. § 541(a)(1).

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case is also related to the bankruptcy case because the Trustee is

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already prosecuting thirty-two other ADA cases in the Bankruptcy

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Court filed by the Debtor.

The instant

Additionally, the estate has no cash so

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it would be an extreme burden for the Trustee to prosecute many

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cases in multiple courts.

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Defendants counter by arguing that referring this case to the

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Bankruptcy Court is not an efficient use of judicial resources

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because it is a non-core proceeding that does not involve any issue

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of bankruptcy law.

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Court and if there is a jury trial, only a district court judge can

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preside over the trial unless all the parties consent to the

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bankruptcy judge.

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before this Court is more efficient for the Court and more

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economical for the parties.

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referral of this case to the bankruptcy court could be interpreted

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as forum shopping.

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It would be subject to de novo review by this

Thus, Defendants argue, a single proceeding

Finally, Defendants argue that

The Court finds that pursuant to 11 U.S.C. § 541, the instant

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case is the legal interest of the debtor and is thus property of

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the estate.

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estate, the “close nexus” test of Pacor does not apply.

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Furthermore, the Security Farm factors, 124 F.3d at 1008, support

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referral of this case to the Bankruptcy Court.

Because this case is property of the bankruptcy

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Referral to the

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Bankruptcy Court is an efficient use of judicial resources.

As the

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Trustee points out in his Reply (Doc. #34), bankruptcy courts

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routinely handle adversary proceedings and both the Bankruptcy

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Court judges and the District Court judges in this district are

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under heavy caseloads.

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result in an overall savings of judicial resources, as well as

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convenience for the parties because it will result in the same

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court handling the adversary proceedings and the overall

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administration of the underlying Bankruptcy Case.

Referral to the Bankruptcy Court will

Additionally,

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since this case is about alleged violations of the ADA and does not

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involve bankruptcy law, uniformity of bankruptcy administration is

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not an applicable factor.

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shopping as the impetus of this motion is to organize numerous

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cases in one forum.

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Motion to Refer This Case to the United States Bankruptcy Court,

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Eastern District of California.

Finally, there is no evidence of forum

Accordingly, the Court GRANTS the Trustee’s

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III. ORDER

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For the reasons set forth above, the Court GRANTS the Motion

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to Refer This Case to the United States Bankruptcy Court, Eastern

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District of California.

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IT IS SO ORDERED.
Dated: November 10, 2011

____________________________
JOHN A. MENDEZ,
UNITED STATES DISTRICT JUDGE

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