Opinion
Bankruptcy No. 02-20637, Adversary No. 03-2198, Case No. 2:03-CV-672 TC.
June 15, 2004
ORDER
Pursuant to 28 U.S.C. § 1292(b), Plaintiff and Debtor-In-Possession Beneco Enterprises, LLC ("Beneco") filed a motion seeking interlocutory appeal certification of the court's earlier order granting withdrawal of the bankruptcy reference and transfer of venue. Beneco also seeks an order staying the withdrawal and transfer pending resolution of an interlocutory appeal. Defendant Electrical Power Control Corporation ("EPC") opposes the motion. For the reasons set forth below, Beneco's Motion is DENIED.
The court orally granted Defendant Electrical Power Control Corporation's Motion for Withdrawal of Reference and Transfer of Venue at the close of the hearing on the motion. A proposed written order, approved as to form by both parties, was prepared and submitted to the court. That Order has now been signed and will be filed simultaneously with this Order.
ANALYSIS
The details of this case are set forth in the pleadings, and the court will not repeat them here.
For a non-final order to be certified for interlocutory appeal, three criteria must be established: (1) the order involves a controlling question of law; (2) as to which there is substantial ground for difference of opinion; and (3) immediate appeal may materially advance the ultimate termination of the litigation. 28 U.S.C. § 1292(b).
The parties do not dispute that the court's order withdrawing reference and transferring venue is not a final appealable order.
Beneco contends that the court's order involves a controlling question of law. The court disagrees. A "controlling question of law" is one where "resolution of the issue on appeal could materially affect the outcome of the litigation in the district court." In re Cement Antitrust Litig., 673 F.2d 1020, 1026 (9th Cir. 1982).
Beneco generally characterizes the "controlling question of law" as whether the court had cause to withdraw reference of the adversary proceeding from the bankruptcy court. More specifically, Beneco contends that the correct standard for establishing cause was whether the adversary proceeding concerned core or non-core issues, and if the adversary proceeding concerned a core issue, cause did not exist. Here, Beneco argues that the adversary proceeding concerned the allowance or disallowance of a claim in the bankruptcy court, that such an issue is a core issue, and therefore cause did not exist. (See Beneco's Mem. in Supp. at 5.) Also, although Beneco's brief focuses mostly on its desire to appeal the court's withdrawal of the bankruptcy reference, it is apparent that Beneco ultimately seeks to attack the decision that the case be litigated in the District of Arizona. Regardless, under either scenario, certification for interlocutory appeal is not warranted.
The court disagrees with Beneco's characterization of the adversary proceeding as simply involving the allowance or disallowance of a claim in the bankruptcy court. Similarly, the court disagrees with Beneco's characterization of the matter as a core matter within the exclusive expertise of the Bankruptcy Court. But whether the proceeding is core or non-core is not the determinative factor in deciding whether to withdraw the reference for cause.
Permissive withdrawal of the bankruptcy reference is within the court's discretion and does not turn on the question of whether the adversary proceeding involves a core or non-core issue. 28 U.S.C. § 157(d) ("The district court may withdraw, in whole or in part, any case or proceeding referred under this section, on its own motion or on timely motion of any party, for cause shown") (emphasis added); American Community Servs., Inc. v. Wright Marketing, Inc., 86 B.R. 681, 686 (D. Utah 1988);Enviro-Scope Corp. v. Westinghouse Elec. Corp.,, 57 B.R. 1005, 1008 (E.D. Pa. 1985) ("A district court is not foreclosed from withdrawing a reference to a bankruptcy court because a matter is found to be a core proceeding. . . . Accordingly, a district court is given broad discretion in determining whether to withdraw a matter [under 28 U.S.C. § 157"). Also, the court's decision whether to transfer venue is discretionary. See, e.g., 28 U.S.C. § 1404(a), 1412.
Many courts have held that discretionary orders, such as the one at issue (whether it be the order to withdraw reference or the order to transfer venue), typically do not involve controlling questions of law. See, e.g., American Coal Co. v. Enron North America Corp., 2003 WL 22481030, No. 03 CIV. 1727 LTS (S.D.N.Y. 2003) (holding that court's discretionary decision whether to withdraw reference was not controlling question of law under 28 U.S.C. § 1292(b)); Todd v. Richmond, 877 F. Supp. 1485, 1493 (D. Kan. 1995) (refusing to certify court's decision to remand based on Burford abstention doctrine and noting that "[a]n immediate appeal only to decide which one of two qualified courts should decide the dispute would simply mean more delay"); K-Mart Corp. v. Swann Ltd. Partnership, 128 B.R. 138, 141 (D. Md. 1991) (refusing to certify court's discretionary decision regarding change of venue and noting that "courts have regularly found that discretionary venue decisions are not open to interlocutory appeal"); In re Wyoming Tight Sands Antitrust Cases, 715 F. Supp. 307, 309 (D. Kan. 1989) (refusing to certify court's discretionary decision on motion to transfer venue); In re Manville Forest Products Corp., 47 B.R. 955, 957 (S.D.N.Y. 1985) ("A decision to deny a transfer motion is discretionary and does not involve a controlling question of law as to which there is substantial ground for difference of opinion"). See also Coopers Lybrand v. Livesay, 437 U.S. 463, 477 n. 30 (1978) (noting that allowing appeal of inherently non-final order tentatively resolved on an individual factual basis — that is, a discretionary order — is "plainly inconsistent with the policies promoted by § 1292(b)");Dalton v. United States, 733 F.2d 710, 714 (10th Cir. 1984) ("withdrawal of reference and transfer of venue orders merely involve the selection or designation of the forum in which final decisions will ultimately be reached"). The order at issue is no different than the discretionary orders discussed in the above-cited cases. Accordingly, the court finds that the order does not involve a controlling question of law.
As EPC notes, Beneco's citation of In re Kaiser Steel Corp., 911 F.2d 380 (10th Cir. 1990), is not persuasive. Kaiser Steel does not stand for the proposition for which it is cited.
Also, there is not substantial ground for difference of opinion on the question of law governing withdrawal of the reference or on the question of law governing transfer of venue. While Beneco may disagree with the court's discretionary decision based on the facts of the situation, the governing law is settled. Here, the appellate court would simply be reviewing the court's discretionary application of the accepted standards under the abuse of discretion standard.
Finally, as noted by the Defendant EPC, an appeal would not conclusively decide substantive issues. All that would be decided is the forum. That would not advance the ultimate termination of the litigation.
As EPC noted in its brief, Beneco's reliance on Kerr-McGee Corp. v. Farley, 88 F. Supp.2d 1219 (D.N.M. 2000), is unavailing. (See EPC's Opp'n Mem. at p. 5 n. 1.) InKerr-McGee, the court was faced with the question of whether exclusive federal jurisdiction existed. The Kerr-McGee court was concerned that in the absence of interlocutory relief, the parties might advance to trial in the wrong forum. Here, the existence of jurisdiction is not an issue.
ORDER
For the foregoing reasons, Beneco's Motion to certify the case for interlocutory appeal and to stay all proceedings and the transfer pending appeal is DENIED.