Ries v. Gustner
ORDER remand to Bankruptcy Court(Written Opinion). Signed by Judge Joan N. Ericksen on August 2, 2012. (slf)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Charles W. Ries,
No. 12-cv-1629 (JNE)
James D. Gustner,
This adversary proceeding was initiated in the United States Bankruptcy Court for the
District of Minnesota by a bankruptcy trustee asserting claims for fraudulent transfer under 11
U.S.C. §§ 548(a)(1)(B) and 550. See ECF No. 1-1. Defendant demanded a jury trial and withheld
his consent to trial of the matter by the Bankruptcy Court. The Bankruptcy Court therefore
ordered that the adversary proceeding be transferred to the District Court pursuant to Local Rule
5011-3(a).1 See ECF No. 1-17. On its own initiative, the Court remands this case to the
The transfer to the District Court is premature at this early stage in the adversary
proceeding. The interests of judicial economy are best served by returning the proceeding to the
Bankruptcy Court to utilize that court’s expertise until the proceeding is ready for trial. See
Sigma Micro Corp. v. Healthcentral.com (In re Healthcentral.com), 504 F.3d 775, 787-88 (9th
Cir. 2007) (collecting cases and finding a defendant’s Seventh Amendment right to a jury trial in
Local Rule 5011-3(a) states in relevant part:
On the [bankruptcy] judge’s own initiative or on motion of a party
in interest, the bankruptcy judge shall transfer to the district court:
(1) any proceeding in which the court has determined that there is a
right to trial by jury of the issues for which a jury has been timely
demanded, and the parties have not consented to the bankruptcy
judge conducting the jury trial.
district court does not require immediate transfer of the proceeding to the district court, and the
bankruptcy court’s retention of the proceeding until it is trial-ready promotes judicial economy
by utilizing the bankruptcy court’s specialized knowledge of Title 11 actions); Kelley v. Hofer
(In re Petters Co., Inc.), 440 B.R. 805, 810 (Bankr. D. Minn. 2010) (stating the bankruptcy
court’s retention of the proceeding for pre-trial matters “make[s] best use of the specialized
expertise of the bankruptcy judiciary”). Further, Defendant’s Seventh Amendment right to a jury
trial is not abridged in any way by the Bankruptcy Court hearing and deciding pretrial matters.
See Healthcentral.com, 504 F.3d at 787 (finding a bankruptcy court’s pre-trial management of
discovery matters and even decisions on dispositive motions “would not affect a party’s Seventh
Amendment right to a jury trial”).
Accordingly, IT IS HEREBY ORDERED THAT this case is remanded to the Bankruptcy
Court until the proceeding is ready for trial.
Dated: August 2, 2012
s/ Joan N. Ericksen
JOAN N. ERICKSEN
United States District Judge
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