Ucarer v. ALA Turk, Inc. et al
MEMORANDUM AND ORDER: On November 30, 2020, this case was transferred to the Court from the Southern District of New York for referral to the United States Bankruptcy Court for the Eastern District of New York in connection with Case No. 20-42628 (Ba nkr. E.D.N.Y.). On December 11, 2020, Plaintiff was ordered to show cause as to why the case should not be referred to the Bankruptcy Court for the reasons stated in Judge Furman's November 30, 2020 memorandum and order 69 . On December 18, 2 020, Plaintiff filed a motion for withdrawal of the Court's referral to the Bankruptcy Court, which was premature as the case had not yet been referred. In any event, this case is REFERRED to United States Bankruptcy Court for the Eastern Distr ict of New York in connection to Case No. 20-42628 (Bankr. E.D.N.Y.). For the reasons stated in the attached memorandum and order, the motion for withdrawal of the referral is DENIED. Ordered by Judge LaShann DeArcy Hall on 2/17/2021. (Williams, Erica)
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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
ALA TURK, INC. (D/B/A A LA TURKA),
SULEYMAN SECER, HUSEYIN SECER (A/K/A
ERSIN SECER), AND UTKU SECER,
MEMORANDUM AND ORDER
LASHANN DEARCY HALL, United States District Judge:
On June 25, 2019, Plaintiff Akin Ucarer filed a complaint against Defendants Ala Turk,
Inc. (D/B/A A La Turka), Suleyman Secer, Huseyin Secer (A/K/A Ersin Secer), and Utku Secer
bringing claims for inter alia, unpaid minimum wages, overtime wages, misappropriated tips,
spread of hours pay, notice violations, and retaliation in violation of the Fair Labor Standards
Act (“FLSA”), 29 U.S.C. § 201 et seq. (“FLSA”), and New York Labor Law (“NYLL”), §§ 190
et seq. and 650 et seq. (“NYLL”). (Compl., ECF No. 1.) On December 9, 2020, this case was
transferred from the Southern District of New York for referral to the United States Bankruptcy
Court for the Eastern District of New York in connection to Case No. 20-42628 (Bankr.
E.D.N.Y.). (ECF No. 69.) Plaintiff was ordered to show cause by December 18, 2020 as to why
the case should not be referred to the Bankruptcy Court for the reasons stated in Judge Furman’s
November 30, 2020 memorandum and order. Plaintiff filed a response to the order to show
cause arguing why referral to the Bankruptcy Court should be withdrawn. (ECF No. 72.) Such
arguments are premature as referral has not occurred yet. However, even if Plaintiff were to
properly raise these arguments after referral, Plaintiff’s motion would be denied.
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I. Mandatory Withdrawal
Section 157(d) provides that withdrawal of the bankruptcy reference is mandatory where
“the court determines that resolution of the proceeding requires consideration of both title 11 and
other laws of the United States regulating organizations or activities affecting interstate
commerce.” 28 U.S.C. § 157(d). The Second Circuit has cautioned that this provision should be
construed “narrowly,” and withdrawal of a referral “is not available merely whenever nonBankruptcy Code federal statutes will be considered in the Bankruptcy Court proceeding, but is
reserved for cases where substantial and material consideration of non-Bankruptcy Code federal
statutes is necessary for the resolution of the proceeding.” In re Ionosphere Clubs, Inc., 922 F.2d
984, 995 (2d Cir. 1990). A proceeding requires “substantial and material consideration” of nonbankruptcy federal laws when the court must engage in “significant interpretation, as opposed to
[the] simple application” of those laws. City of N.Y. v. Exxon Corp., 932 F.2d 1020, 1026 (2d
Cir. 1991). “The burden of establishing a right to mandatory withdrawal is more easily met
where matters of first impression are concerned.” In re Joe's Friendly Serv. & Son Inc., No. 14BK-70001(REG), 2019 WL 6307468, at *4 (E.D.N.Y. Nov. 25, 2019) (citation omitted)
(collecting cases). Here, Plaintiff brings claims for, inter alia, unpaid minimum wages, overtime
wages, misappropriated tips, spread of hours pay, notice violations, and retaliation under FLSA
and NYLL. (Compl., ECF No. 1.) Plaintiff argues that FLSA and “employment law in general”
are “very complicated” areas of law, with “several layers of state and federal statutes, state and
federal regulations, along with state and federal case law.” (ECF No. 72 at 4.) The Court
Merely stating that a statute is “very complicated” is not a legally sufficient basis for
mandatory withdrawal. Plaintiff has made no arguments to support a finding that this case
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involves simple application, rather than significant interpretation, of FLSA and NYLL. This
case is not analogous to In re Horizon Air, Inc., 156 B.R. 369 (N.D.N.Y. 1993), cited by
Plaintiff, in which the referral was withdrawn. There, the district court found that to decide the
motion at issue, the bankruptcy court would have been required to interpret several provisions of
the Federal Aviation Act, including how the statute interacts with FAA regulations. Id. at 374.
Here, nothing before this Court suggests that the claims require any significant interpretation of
the FLSA or NYLL statutes. Nor does Plaintiff does argue that the complaint raises matters of
first impression, or otherwise unsettled areas of law. And, as one court in this district observed
in deciding for motion for attorney’s fees in a FLSA case, “FLSA and New York Labor Law are
both straightforward statutes.” Castellanos v. Deli Casagrande Corp., No. CV 11-245 JFB
AKT, 2013 WL 1207058, at *10 (E.D.N.Y. Mar. 7, 2013), report and recommendation
adopted, No. 11-CV-0245 JFB ARL, 2013 WL 1209311 (E.D.N.Y. Mar. 25, 2013).
Accordingly, the Court finds that mandatory withdrawal is not appropriate.1
The Court had discretion to withdraw the reference “for cause shown.” 28 U.S.C.
§157(d). The Second Circuit has instructed that “a district court considering whether to
withdraw the reference should first evaluate whether the claim is core or non-core, since it is
Plaintiff’s one other cited case provides no support for his position that mandatory withdrawal is warranted.
Plaintiff cites In re Chateaugay Corp., 193 B.R. 669, 673 (S.D.N.Y. 1996), for the proposition that referral is only
appropriate where the “only issues to be litigated in the adversary proceeding ar[i]se under the Bankruptcy Code.”
(ECF 72 at 3.) To start, that is a misstatement of the law. Referrals can be made where a case is found to be
“related to” a Bankruptcy Proceeding, even where they do not arise in a bankruptcy proceeding. See 28 U.S.C. §
157(a) (“Each district court may provide that any or all cases under title 11 and any or all proceedings arising under
title 11 or arising in or related to a case under title 11 shall be referred to the bankruptcy judges for the district.”
(emphasis added)). And, in any event, In re Chateaugay is a case that dealt with a body of case law regarding the
Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), not relevant here, and
Plaintiff has failed to make any compelling arguments as to why the Court should consider In re Chateaugay
persuasive authority. See id. at 674 (describing and applying Second Circuit caselaw regarding when a claim
accrues under CERCLA).
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upon this issue that questions of efficiency and uniformity will turn.” In re Orion Pictures
Corp., 4 F.3d 1095, 1101 (2d Cir. 1993). Then, the court may consider additional factors such
as, “questions of efficient use of judicial resources, delay and costs to the parties, uniformity of
bankruptcy administration, [and] the prevention of forum shopping.” Id. Courts applying In re
Orion, have considered the following factors in determining whether to withdraw a reference for
cause shown: “(i) whether the proceeding is a ‘core’ proceeding under 28 U.S.C. § 157(b); (ii)
whether the action is legal or equitable; (iii) interests of judicial economy; (iv) interests of
uniform bankruptcy administration; (v) reduction of forum shopping; (vi) economical use of
debtors' and creditors' resources; (vii) interests of expediting the bankruptcy process; and (viii)
the presence of a jury demand.” Oneida Ltd. v. Pension Ben. Guar. Corp., 372 B.R. 107, 111
(S.D.N.Y. 2007) (citing In re Orion Pictures Corp., 4 F.3d 1095, 1101 (2d Cir.1993)).
Here, Plaintiff does not dispute that he filed a proof of claim against Ala Turk in
Bankruptcy Court. (ECF No. 72 at 6.) By filing a proof of claim in bankruptcy court, Plaintiff
acknowledges that the bankruptcy court will determine whether his claim against Ala Turk
should be allowed or disallowed, and at what amount, as part of a Chapter 11 Plan. (ECF No. 72
at 6.) As the Second Circuit has observed, “nothing is more directly at the core of bankruptcy
administration . . . than the quantification of all liabilities of the debtor.” In re S.G. Phillips
Constructors, Inc., 45 F.3d 702, 705 (2d Cir. 1995). For this reason, the Second Circuit has held
that “the determinative factor as to the bankruptcy court’s jurisdiction in this case is that the
[plaintiff] filed a proof of claim . . . [and] in so doing, the [plaintiff] necessarily became a party
under the [bankruptcy] court’s core jurisdiction.” Id. Nevertheless, Plaintiff makes several
arguments in support of a discretionary withdrawal of the referral to the bankruptcy court. None
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First, Plaintiff asks the Court to set aside the question of core versus non-core claims and
consider the other factors first. (ECF No. 72 at 5.) That is not the law. As Court determines that
the claim against Ala Turk is a core proceeding, the discretionary factors, such as efficiency,
weigh in favor of declining to withdraw the referral.
Second, Plaintiff contends that the claims against the individual defendants are non-core,
which weighs in favor of withdrawal. (ECF No. 72 at 6.) To be sure, if the claims against the
individual defendants are non-core, the bankruptcy court is prohibited from holding a jury trial
on those claims. See In re Orion Pictures Corp., 4 F.3d 1095, 1101 (2d Cir. 1993) (“[T]he
constitution prohibits bankruptcy courts from holding jury trials in non-core matters.”).
Plaintiffs have demanded a jury trial on all claims, which does weigh in favor of withdrawal.
(See Compl.) However, assuming, without deciding, that the claims against the individual
defendants are non-core, judicial efficiency still supports the reference to the bankruptcy court.
Should Plaintiff’s claims against Ala Turk be disallowed as part of the Chapter 11 plan, Plaintiff
may choose not to pursue further action against the individual defendants. Accordingly, judicial
efficiency mandates that the referral stand, even though Plaintiff has requested a jury trial as to
Third, Plaintiff asks that he first be able to litigate Defendants’ liability in the district
court before any reference. He cites to no caselaw in which a Court agreed to such an
arrangement, particularly for a core claim, and the Court declines his request.
Fourth, Plaintiff argues that the Court should view the proof of claim as merely a
“defensive proof of claim,” which means that Plaintiff does not consent to any “‘core’ status” of
his claim. (ECF No. 74 at 6 (citing In re Kamine/Besicorp Allegany, L.P., 214 B.R. 953, 972
(Bankr. D.N.J. 1997).) While Plaintiff does not articulate this theory any further, the Court
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presumes that Plaintiff is asking the Court to find that Plaintiff’s lack of consent to core status
support withdrawal of the reference. That is not the law of this circuit. As the Second Circuit
has explained, in rejected a similar argument, “[i]nvoking equitable jurisdiction in the
bankruptcy context might be analogized to invoking a court’s jurisdiction by filing a complaint.”
In re S.G. Phillips Constructors, Inc., 45 F.3d 702, 707 (2d Cir. 1995). For this reason, in filing
a proof of claim in the bankruptcy court, Plaintiff has submitted himself to the bankruptcy
court’s equitable jurisdiction as to those claims. See id. (finding same); see also Tallo v.
Gianopoulos, 321 B.R. 23, 27 (E.D.N.Y. 2005) (“That [plaintiff] may have been forced by
procedural rules to file his claim to avoid losing it is irrelevant.”).
For the foregoing reasons, this case is REFERRED to United States Bankruptcy Court for
the Eastern District of New York in connection to Case No. 20-42628 (Bankr. E.D.N.Y.). The
motion for withdrawal of the referral is DENIED.
Dated: Brooklyn, New York
February 17, 2021
LASHANN DEARCY HALL
United States District Judge
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