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UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF OREGON

In Re:

Rebecca Campos,

Debtor.

Rebecca Campos,

 Plaintiff,

v.

Bluestem Brands, Inc., and

WebBank,

 Defendants.

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Bankruptcy Case

No. 14-33295-rld7

Adv. Proc. No. 14-03241-rld

REPORT AND RECOMMENDATION

RE: WITHDRAWAL OF THE

REFERENCE

Chapter 7 Debtor, Plaintiff herein, filed an adversary proceeding

seeking damages pursuant to § 362(k) for Defendants’ alleged willful

violation of the automatic stay in attempting to collect a debt that

debtor contends is the subject of her discharge previously entered in her

chapter 7 bankruptcy case. Plaintiff seeks class action status for this

litigation pursuant to Fed. R. Civ. P. 23.

Defendants have filed a motion to compel arbitration as provided by

Page 1 - REPORT AND RECOMMENDATION RE: WITHDRAWAL OF THE REFERENCE

Below is the Court's Report and Recommendation.

_______________________________________

RANDALL L. DUNN

U.S. Bankruptcy Judge

DISTRICT OF OREGON

F I L E D

February 18, 2015

Clerk, U.S. Bankruptcy Court

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the credit agreement which forms the basis of the relationship between

the parties. Alternatively, Defendants seek dismissal of the adversary

proceeding complaint. 

Defendants’ motion raises issues regarding substantial and

predominant state law and federal law issues independent of any

bankruptcy issues raised in the adversary proceeding complaint. First,

the motion raises state law questions regarding the scope of the

arbitration clause, which is purely a matter of state contract law. See

Northern Pipeline Construction Co. v. Marathon Pipe Line Co. (In re

Marathon Pipeline Co.), 458 U.S. 50 (1982). Second, although the scope

and application of § 362 of the Bankruptcy Code raised by the Plaintiff

is a fundamental bankruptcy issue within my core jurisdiction pursuant to

28 U.S.C. § 157(b)(2), the scope and application of the Federal

Arbitration Act, 9 U.S.C. § 1, et seq., raised by the Defendants is a

fundamental issue of federal law that is not within my core jurisdiction.

Defendants’ have expressly refused to consent to the entry by the

bankruptcy court of any final order in this adversary proceeding. 

If only legal issues are implicated in the adversary proceeding, any

determination I might make would require two levels of appeal to reach

the Ninth Circuit. In light of Defendants’ explicit unwillingness to

consent to my entry of any final order in this adversary proceeding, any

findings of fact I might make would be subject to de novo determination

at the district court level. Additionally, Stern v. Marshall, 564 U.S. 2

(2011), raises ambiguity even as to any core jurisdiction I might have in

these circumstances.

I therefore recommend pursuant to LBR 9033-1 and LR 2100-4 that the

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reference be withdrawn, based upon principles of judicial economy. See

Security Farms v. Int’l Brotherhood of Teamsters, 124 F.3d 999, 1008-09

(9th Cir. 1997).

 # # #

Michael Fuller

Kelly Donovan Jones

Brandy A. Sargent

Aaron D. Van Oort

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