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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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 GEORGE S. LOUIE, 12 Plaintiff, 13 14 v. 15 CALIFORNIA JUDICIAL COUNCIL, SACRAMENTO COUNTY SUPERIOR COURT, et al., 16 Defendants. 17 ) ) ) ) ) ) ) ) ) ) ) ) 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 18 19 Case to the United States Bankruptcy Court, Eastern District of 20 California (Doc. #23) presented by Alan S. Fukushima (“the Trustee” 21 or “Mr. Fukushima”), Chapter 7 Trustee in the bankruptcy case In re 22 Louie, United States Bankruptcy Court, Eastern District of 23 California, Case No. 11-25036-C-7. 24 Council and Sacramento County Superior Court (“Defendants”) oppose 25 the motion (Doc. #31).1 Defendants California Judicial 26 27 28 1 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. 1 1 2 1. FACTUAL AND PROCEDURAL BACKGROUND On September 20, 2010, Plaintiff George S. Louie (“The Debtor” 3 or “Mr. Louie”) filed the instant case. He alleges that Defendants 4 failed to accommodate his disability in violation of the Americans 5 with Disabilities Act (“ADA”) of 1990, California Civil Code 6 Sections 54 and 54.1, and the California Unruh Civil Rights Act. 7 On February 28, 2011, Mr. Louie was placed into involuntary 8 bankruptcy pursuant to Title 11 U.S.C. § 303: In re George S. 9 Louie, United States Bankruptcy Court, Eastern District of 10 California, Case No. 11-25036-C-7 (the “Involuntary Bankruptcy 11 Case”). 12 for relief. 13 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: 14 In re George Sing Louie, United States Bankruptcy Court, Eastern 15 District of California, Case No. 2011-28344 (the “Voluntary 16 Bankruptcy Case”). 17 On May 31, 2011, the Bankruptcy Court consolidated the 18 Involuntary Bankruptcy Case and the Voluntary Bankruptcy Case as 19 Case No. 11-250360C-7 (the “Bankruptcy Case”) and appointed Mr. 20 Fukushima as the Chapter 7 Trustee of the consolidated cases. 21 Through the Trustee’s investigation, he discovered that the 22 Debtor has more than 80 cases pending in various California state 23 courts and federal district courts. 24 allege that defendants failed to accommodate Mr. Louie’s disability 25 in violation of the ADA. 26 by the Trustee, this Court issued a related case order (Doc. #28) 27 relating eleven other ADA cases pending before the district court, 28 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 2 1 the Bankruptcy Court (Doc. #23). 2 Counsel and Sacramento County Superior Court oppose the motion 3 (Doc. #31). 4 Trustee’s Motion (Doc. #33). Lien Claimant Cable Gallagher does not oppose the 5 6 7 8 II. A. Defendants California Judicial OPINION Legal Standard 1. Referral to Bankruptcy Court 28 U.S.C. § 1334(b) provides that federal courts shall have 9 “original but not exclusive jurisdiction of all civil proceedings 10 arising under title 11, or arising in or related to a case under 11 title 11.” 12 Supreme Court described the scope of “related to” jurisdiction 13 under Section 1334(b): 14 15 16 17 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. 18 Where the cause of action is not property of the estate in 19 bankruptcy, courts in the Ninth Circuit utilize the Pacor test. 20 The Pacor test considers “whether the outcome of that [civil] 21 proceeding could conceivably have any effect on the estate being 22 administered in bankruptcy.” 23 994 (1984). 24 courts consider “the efficient use of judicial resources, delay and 25 costs to the parties, uniformity of bankruptcy administration, the 26 prevention of forum shopping, and other related factors” when 27 deciding whether to refer cases to the Bankruptcy Court. 28 Farms v. International Brotherhood Of Teamsters, Chauffeurs, Pacor, Inc. v. Higgins, 743 F.2d 984, Additionally, the Ninth Circuit suggests district 3 Security 1 Warehousemen & Helpers, an Unincorporated Ass’n., 124 F.3d 999, 2 1008 (9th Cir. 1997). 3 B. Claims for Relief 4 The Trustee asks the Court to refer this case to the 5 Bankruptcy Court because the instant case is property of the 6 bankruptcy estate pursuant to 11 U.S.C. § 541(a)(1). 7 case is also related to the bankruptcy case because the Trustee is 8 already prosecuting thirty-two other ADA cases in the Bankruptcy 9 Court filed by the Debtor. The instant Additionally, the estate has no cash so 10 it would be an extreme burden for the Trustee to prosecute many 11 cases in multiple courts. 12 Defendants counter by arguing that referring this case to the 13 Bankruptcy Court is not an efficient use of judicial resources 14 because it is a non-core proceeding that does not involve any issue 15 of bankruptcy law. 16 Court and if there is a jury trial, only a district court judge can 17 preside over the trial unless all the parties consent to the 18 bankruptcy judge. 19 before this Court is more efficient for the Court and more 20 economical for the parties. 21 referral of this case to the bankruptcy court could be interpreted 22 as forum shopping. 23 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 24 case is the legal interest of the debtor and is thus property of 25 the estate. 26 estate, the “close nexus” test of Pacor does not apply. 27 Furthermore, the Security Farm factors, 124 F.3d at 1008, support 28 referral of this case to the Bankruptcy Court. Because this case is property of the bankruptcy 4 Referral to the 1 Bankruptcy Court is an efficient use of judicial resources. As the 2 Trustee points out in his Reply (Doc. #34), bankruptcy courts 3 routinely handle adversary proceedings and both the Bankruptcy 4 Court judges and the District Court judges in this district are 5 under heavy caseloads. 6 result in an overall savings of judicial resources, as well as 7 convenience for the parties because it will result in the same 8 court handling the adversary proceedings and the overall 9 administration of the underlying Bankruptcy Case. Referral to the Bankruptcy Court will Additionally, 10 since this case is about alleged violations of the ADA and does not 11 involve bankruptcy law, uniformity of bankruptcy administration is 12 not an applicable factor. 13 shopping as the impetus of this motion is to organize numerous 14 cases in one forum. 15 Motion to Refer This Case to the United States Bankruptcy Court, 16 Eastern District of California. Finally, there is no evidence of forum Accordingly, the Court GRANTS the Trustee’s 17 18 III. ORDER 19 For the reasons set forth above, the Court GRANTS the Motion 20 to Refer This Case to the United States Bankruptcy Court, Eastern 21 District of California. 22 23 IT IS SO ORDERED. Dated: November 10, 2011 ____________________________ JOHN A. MENDEZ, UNITED STATES DISTRICT JUDGE 24 25 26 27 28 5

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