In re PW Supermarkets, Inc.

Filing 9

ORDER Adopting Recommendation of Bankruptcy Court and Denying Motion to Withdraw Reference. Signed by Judge Phyllis J. Hamilton on 7/24/2015. (pjhlc3, COURT STAFF) (Filed on 7/24/2015)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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In re PW SUPERMARKETS, INC.,

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Debtor.

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Bankr. Ct. Adv. Case. No. 14-4150
UFCW & EMPLOYERS BENEFIT
TRUST FUND, et al.,
Plaintiffs,

United States District Court
Northern District of California

Case No. 15-cv-02615-PJH

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v.

ORDER ADOPTING
RECOMMENDATION OF
BANKRUPTCY COURT AND DENYING
MOTION TO WITHDRAW REFERENCE

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JOY LYNN BELLI, et al.,
Defendants.
The court hereby adopts the recommendation of the bankruptcy court regarding

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withdrawal of the bankruptcy reference and DENIES the motion of defendants Pahl &

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McCay and Stephen D. Pahl (collectively “Pahl & McCay”) for an order withdrawing

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reference of the bankruptcy adversary proceeding pursuant to 28 U.S.C. § 157(d).

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Pahl & McCay have not demonstrated that the legal malpractice and breach of

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fiduciary claims asserted against them in this adversary proceeding require mandatory

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withdrawal pursuant to the second sentence of 28 U.S.C. § 157(d), which provides as

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follows: “The district court shall, on timely motion of a party, so withdraw a proceeding if

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the court determines that resolution of the proceeding requires consideration of both title

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11 and other laws of the United States regulating organizations or activities affecting

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interstate commerce.” Nor is immediate withdrawal of the reference warranted pursuant

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to the first sentence of § 157(d) governing permissive withdrawal: “The district court may

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withdraw, in whole or in part, any case or proceeding referred under this section, on its

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own motion or on timely motion of any party, for cause shown.” 28 U.S.C. § 157(d).

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Though Pahl & McCay have made a jury demand, which the bankruptcy court has

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determined was timely, the court does not find cause for immediate withdrawal of the

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non-core claims against them, considering the efficient use of judicial resources in light of

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the bankruptcy court’s familiarity with this litigation and ability to resolve pretrial disputes.

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See In re Healthcentral.com, 504 F.3d 775, 787 (9th Cir. 2007) (“a Seventh Amendment

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jury trial right does not mean the bankruptcy court must instantly give up jurisdiction and

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that the case must be transferred to the district court. Instead, the bankruptcy court is

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permitted to retain jurisdiction over the action for pre-trial matters.”) (citations omitted).
Pursuant to Bankruptcy Local Rule 9015-2(b), the bankruptcy court is authorized to retain

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United States District Court
Northern District of California

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the claims against Pahl & McCay until all pretrial matters, including motions for summary

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judgment for which the bankruptcy court may submit proposed findings of fact and

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conclusions of law, are resolved. Accordingly, the motion of Pahl & McCay to withdraw

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the reference is DENIED as premature.

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IT IS SO ORDERED.
Dated: July 24, 2015
__________________________________
PHYLLIS J. HAMILTON
United States District Judge

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