Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_06-cv-02273/USCOURTS-caed-2_06-cv-02273-0/pdf.json

Nature of Suit Code: 423
Nature of Suit: Bankruptcy Withdrawal 28 USC 157
Cause of Action: 28:0157 Motion for Withdrawal of Reference

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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

 )

)

)

THOMAS ACEITUNO, Chapter 7 Trustee,)

and STEPHEN REYNOLDS, Chapter 7 )

Trustee, )

) 2:06-cv-2273-GEB-DAD

Plaintiffs, )

)

v. ) ORDER RE: Motion for

) Withdrawal of Reference

KBI NORCAL, INC., et al., )

)

Defendants. )

)

Defendants KBI Norcal, Tommy Belser, and David Moon

(collectively referred to as “Defendants”) move for withdrawal of the

reference of the above-captioned proceeding from the Bankruptcy Court. 

Plaintiffs only oppose withdrawing reference of the Third, Fourth, and

Seventeenth claims (collectively referred to as “severable claims”).

DISCUSSION

The Bankruptcy Court held the severable claims and two other

claims are “core” proceedings and the twelve remaining claims are

“non-core” within the meaning of 28 U.S.C. § 157. (Jan. 18, 2007,

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Not. of Entry of Oct. 24, 2006, Bankr. Ct. Order Determining the Core

Claims Stated in the First Am. Compl. at 2.) 

Plaintiffs argue the severable claims should not be

withdrawn to the District Court because Defendants are not entitled to

a jury trial on these claims, they are factually separate, and are

“core” claims under 28 U.S.C. § 157(b)(2). (Pls.’ Opp’n at 8, 11.) 

Defendants rejoin they are entitled to a jury trial on all claims and

that separate trials in the Bankruptcy Court and the District Court

would be an inefficient use of judicial resources. (Def. KBI’s Reply

at 5, 7.) 

The “authority for permissive withdrawal is governed by the

first sentence of 28 U.S.C. § 157(d): ‘The district court may withdraw

. . . any case or proceeding referred [to the bankruptcy court] on its

motion or on timely motion of a party, for cause shown.’” Sec. Farms

v. Int’l Bhd. of Teamsters, Chauffers, Warehousemen & Helpers, 124

F.3d 999, 1008 (9th Cir. 1997) (“Int’l Bhd.”) (emphasis in original). 

“In determining whether cause exists, a district court should consider

the efficient use of judicial resources.” Id. 

Plaintiffs argue that denying Defendants’ motion for

withdrawal of the severable claims “allows for a more efficient use of

judicial resources, in that the [B]ankruptcy [C]ourt will handle the

bankruptcy-related aspects of the case.” (Pl.’s Part. Opp’n at 12.) 

Plaintiffs contend that even though their bifurcation request will

result in “two trials [in different courts,] will . . . require more

work by the attorneys, and . . . increase the [litigation] expense,”

the severable claims should remain in the Bankruptcy Court. (Id. at

13.) Plaintiff concedes that “some witnesses will doubtless be

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required to testify at both trials” but argues the scope of their

testimony “should be limited to different time frames.” (Id.) 

Plaintiffs’ arguments against withdrawal are unpersuasive. 

Since fourteen of the seventeen claims undisputedly must be withdrawn,

“efficiency [will be] enhanced by withdrawing the reference because

non-core issues predominate.” Int’l Bhd., 124 F. 3d at 1008. 

Therefore, Defendants motion to withdraw reference of the above

captioned proceeding is granted.

IT IS SO ORDERED.

Dated: February 12, 2007

 

GARLAND E. BURRELL, JR.

United States District Judge

Case 2:06-cv-02273-GEB-DAD Document 5 Filed 02/12/07 Page 3 of 3