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UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

MARIA LOBATO-HIDALGO and LUIS 

HIDALGO,

Plaintiffs,

v.

AMERICAN AIRLINES, INC., and AMR 

CORPORATION,

Defendants.

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: OPINION

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: Civ. No. 2:10-cv-03212 (WHW)

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Walls, Senior District Judge

Plaintiffs Maria Lobato-Hidalgo and Luis Hidalgo (“Plaintiffs”) move to reinstate their 

case against Defendants American Airlines, Inc. and AMR Corporation (“Defendants”). The 

motion is granted.

FACTUAL AND PROCEDURAL BACKGROUND

On June 23, 2010, Plaintiffs filed suit against Defendants for an injury Maria LobatoHidalgo allegedly suffered when disembarking from a flight at Newark Liberty Airport. ECF No. 

1 at 2-3, ¶5. In December 2011, Defendants notified the Court that they had recently entered 

bankruptcy proceedings. ECF No. 17. Those proceedings have been consolidated in the United 

States Bankruptcy Court for the Southern District of New York under the docket number 11-

15463-shl. Id. In February 2012, because of the bankruptcy proceedings, this Court dismissed 

this action without prejudice and with leave to reopen “for good cause shown for the entry of any 

stipulation of [sic] order, or for any other purpose required to obtain a final determination of the 

litigation.” ECF No. 19. On February 1, 2013, Plaintiffs’ counsel asked the Court to lift the stay 

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according to an agreement the parties had entered. ECF No. 20. In that agreement, Defendants 

agreed to modify the automatic stay with respect to Plaintiffs’ Injury & Damage claims, allowing 

them to go forward subject to the Bankruptcy Court’s order and “solely to the extent of Available 

and Collectible [insurance] Coverage.” ECF No. 20-1 at 3. On April 30, 2013, Plaintiffs filed this 

motion to reinstate their cause of action. ECF No. 21. Defendants do not oppose it.

STANDARD OF REVIEW

Filing for bankruptcy triggers an “automatic stay” of any judicial action commenced

against the debtor before the bankruptcy filing. 11 U.S.C. § 362(a)(1) (Westlaw 2010). The 

parties may modify the stay “for cause” under 11 U.S.C. § 362(d)(1). The statute “does not 

define ‘cause,’ leaving courts to consider what constitutes cause based on the totality of the 

circumstances in each particular case.” In re Stone Res., Inc., 482 F. App’x 719, 722 (3d Cir. 

2012) (citation omitted). That discretion lies with the bankruptcy court: “Only the bankruptcy 

court with jurisdiction over a debtor’s case has the authority to grant relief from the stay of 

judicial proceedings against the debtor.” Mar. Elec. Co., Inc. v. United Jersey Bank, 959 F.2d 

1194, 1204 (3d Cir. 1991).

DISCUSSION

The Bankruptcy Court in the Southern District of New York determined that there was 

just cause to grant relief from the automatic stay. Order Pursuant to 11 U.S.C. § 362(d)(1), In re 

AMR Corp., No. 11-15463-shl (Bankr. S.D.N.Y. Jan. 27, 2012), ECF No. 908 at 2. That order 

provides a form agreement for parties to use, id. Ex. A, and the parties’ agreement relies upon it 

as a model. The agreement provides that Plaintiffs’ case may proceed subject to the Bankruptcy 

Court’s order and only to the extent of the Available and Collectible Coverage. ECF No. 20-1 at 

4 ¶ 4.

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The Bankruptcy Court’s order granting relief from the automatic stay constitutes a 

legitimate “purpose required to obtain a final determination of the litigation.” This Court agrees 

with Plaintiffs that “[r]einstatement of this matter is justified in that it would be a more effective 

use of judicial resources than filing the complaint anew.” Pls.’ Mem. of Law, Apr. 30, 2012,

ECF No. 21.

CONCLUSION

Plaintiffs’ motion to reinstate is granted. 

s/ William H. Walls 

United States Senior District Judge

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