United States District Court, D. Oregon
Szanto, Plaintiff pro se.
Nicholas J. Henderson and Troy Garrett Sexton, Motschenbacher
& Blattner, LLP, Of Attorneys for Defendants Evye Szanto,
Victor Szanto, Nicole Szanto, Kimberley Szanto, Mariette
Szanto, Anthony Szanto, Austin Bell, and Barbara Szanto
L. Blacklidge, Jordan Ramis PC, 2 Centerpointe Drive, Of
Attorneys for the Trustee, Stephen P. Arnot.
OPINION AND ORDER
Michael H. Simon United States District Judge
the Court is Plaintiff pro se Peter Szanto's
motion to withdraw the reference to the bankruptcy court of
one of the proceedings involving Plaintiff. Plaintiff argues
that withdrawal is mandatory under 28 U.S.C. § 157(d),
and, alternatively, that the Court should exercise its
discretion and grant permissive withdrawal under the statute.
Defendants argue that withdrawal is not warranted. For the
reasons discussed below, the Court denies Plaintiff's
United States District Courts have original, but not
exclusive, jurisdiction over bankruptcy proceedings. 28
U.S.C. § 1334(b); Sec. Farms v. Int'l Bhd. of
Teamsters, Chauffers, Warehousemen & Helpers, 124
F.3d 999, 1008 (9th Cir. 1997). District courts also have the
authority to refer bankruptcy proceedings to the bankruptcy
judges in their district. 28 U.S.C. § 157(a). The U.S.
District Court for the District of Oregon has adopted a Local
Rule of Bankruptcy Procedure (“Local Rules”) that
automatically refers “all cases Under Title 11 and all
proceedings arising under Title 11 or arising in or related
to cases under Title 11” to the bankruptcy
court. LR 2100-1(a).
parameters of a bankruptcy court's jurisdiction to hear
and adjudicate cases and proceedings referred by the district
court are classified as either “core proceedings”
or “non-core proceedings.” 28 U.S.C. §
157(b). “In general, a ‘core proceeding' in
bankruptcy is one that invokes a substantive right provided
by title 11 or . . . a proceeding that, by its nature, could
arise only in the context of a bankruptcy case.” In
re Gruntz, 202 F.3d 1074, 1081 (9th Cir. 2000)
(quotation marks omitted) (alteration in original).
“‘Non-core proceedings' are those not
integral to the restructuring of debtor-creditor relations
and not involving a cause of action arising under title
11.” Id. The bankruptcy court may enter final
judgments in core proceedings. 28 U.S.C. § 157(b)(1). In
non-core proceedings, unless the parties consent, the
bankruptcy court may not enter a final judgment, but must
submit proposed findings of fact and conclusions of law to
the district court for de novo review. 28 U.S.C.
§ 157(c); Sec. Farms, 124 F.3d at 1008.
in an adversary proceeding retain the right to a jury trial
if that right would exist outside of bankruptcy. See
Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 58-64
(1989). A party, however, may be found to have waived that
right if it submitted a proof of claim in the bankruptcy
proceeding, subjecting itself to the bankruptcy court's
equitable power to disallow such claims and adjudicate any of
the debtor's opposing counterclaims. Langenkamp v.
Culp, 498 U.S. 42, 44-45 (1990). If there is an unwaived
right to a jury trial in a proceeding pending in bankruptcy
court, the bankruptcy judge may conduct the jury trial only
if all parties consent. 28 U.S.C. § 157(e). If the
parties do not consent, the Local Rules provide that the
bankruptcy judge may conduct pretrial proceedings up through
the lodging of the pretrial order. LR 2100-8(a).
28 U.S.C. § 157, a reference to the bankruptcy court is
subject to mandatory or permissive withdrawal, depending on
the circumstances. The statute provides:
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. The
district court shall, on timely motion of a party, so
withdraw a proceeding if 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).
permissive withdrawal, courts have identified several factors
to consider in determining whether “cause”
exists, including: (1) the efficient use of judicial
resources; (2) delay and costs to the parties; (3) uniformity
of bankruptcy administration; (4) the prevention of forum
shopping; and (5) other related factors. Sec. Farms,
124 F.3d at 1008. “Other related factors” might
include whether the issues are core or non-core proceedings,
as well as the right to a jury trial. See Rosenberg v.
Harvey A. Brookstein, 479 B.R. 584, 587 (D. Nev. 2012).
The party moving for withdrawal of the reference “has
the burden to show that withdrawal of the reference is
warranted.” Budsberg v. Spice, 2017 WL
3895701, at *2 (W.D. Wash. Sept. 6, 2017); see also In re
Ponce Marine Farm, Inc., 172 B.R. 722, 725 (D. P.R.
August 16, 2016, Plaintiff filed a voluntary petition under
Chapter 11 of the U.S. Bankruptcy Code. This commenced
Bankruptcy No. 16-bk-33185-pcm11 (the “Main Bankruptcy
Case”). On September 21, 2016, Plaintiff filed a
complaint against Defendants, commencing No. 16-ap-3114 (the
“Adversary Proceeding”), the case that is the
subject of this pending motion. Plaintiff expressly consented
to the entry of a final judgment by the Bankruptcy Court.
parties engaged in discovery and litigated discovery disputes
in the Adversary Proceeding. The parties filed cross motions
for summary judgment in the Adversary Proceeding. Defendants
moved against all of Plaintiff's claims and for judgment
on one of their counterclaims. Plaintiff moved against one of
Defendants' counterclaims. Plaintiff also filed motions
to exclude certain evidence from the Bankruptcy Court's
consideration while deciding the motions for summary
judgment. The Bankruptcy Court denied one such evidentiary
motion and reserved ruling on the other. Plaintiff filed a
notice of appeal of those two orders of the Bankruptcy Court.
September 6, 2017, Plaintiff filed a document purporting to
withdraw his consent to the entry of final judgment by the
Bankruptcy Court. On September 15, 2017, the Bankruptcy Court
issued a letter notifying the parties that because Plaintiff
did not file a motion or request any relief, the court would
take no action in response to Plaintiff's filing. On
April 16, 2018, Plaintiff filed another document purporting
to elect to have the U.S. District Court enter final
judgment. On April 25, 2018, the Bankruptcy Court denied
Plaintiff's request to withdraw his consent to the entry
of final judgment by the Bankruptcy Court. The Bankruptcy
Court explained that Plaintiff could not withdraw consent
because Plaintiff had previously given express consent, had
waived any objection pursuant to Local Bankruptcy Rule
7008-1, had demonstrated a willingness to proceed at length
with his litigation in the bankruptcy court, and had shown a
lack of any other compelling basis to allow a withdrawal of
17, 2018, the Bankruptcy Court denied Plaintiff's cross
motion for summary judgment against one of Defendants'
counterclaims. The Bankruptcy Court granted Defendants'
motion for summary judgment against all of Plaintiff's
claims and denied Defendants' motion on their second
counterclaim. The Bankruptcy Court dismissed Plaintiff's
claims against Defendants and found issues fact on
Defendants' counterclaims against Plaintiff, leaving