United States District Court, D. Oregon, Portland Division
FINDINGS AND RECOMMENDATIONS
January 14, 2019, plaintiff Mary Sharon Levin filed suit in
Multnomah County Circuit Court against manufacturers and
distributors of asbestos-containing talc and talcum powder
products to which she was exposed through personal use and
during her fifty-year nursing career. Plaintiff alleges that
as a result of that exposure, she developed mesothelioma, and
seeks damages pursuant to state law for strict liability
(First Claim) and negligence (Second Claim). ECF #1-1.
Johnson & Johnson and Johnson & Johnson Consumer Inc.
(collectively, “J&J”) removed the claims
against them to this court, citing Rule 9027 of the Federal
Rules of Bankruptcy Procedure and 28 U.S.C. §§ 1334
and 1452. Notice 2, ECF #1. The same day, J&J filed a
motion to fix venue in the United States District Court for
the District of Delaware, where its exclusive supplier of
cosmetic talc, Imerys Talk America, Inc. and two affiliates
Imerys Talc Vermont, Inc. and Imerys Talc Canada, Inc.
(collectively, the “Debtors”), has filed a
chapter 11 petition. ECF #1-3. Although the Debtors were not
named in the state court action filed by plaintiff in this
case, J&J removed on the ground that plaintiff “may
have claims against the Debtor's estates, ” and
therefore her claims are “related to cases under title
11.” Notice ¶¶ 4, 17, ECF #1. Alleging that
these claims “could conceivably have an effect
on the estate being administered in bankruptcy, ”
J&J avers that this court has “related-to”
jurisdiction over Levin's claims pursuant to 28 U.S.C.
§ 1334(b). Id. ¶¶ 16-18 (emphasis in
her declining health, plaintiff has filed an emergency motion
to remand. Mot. Remand 7, ECF #6. Even if this court
may have jurisdiction over this action, equitable grounds
support remand and plaintiff's motion to remand therefore
should be GRANTED.
courts are of limited jurisdiction, having subject matter
jurisdiction only over matters authorized by the Constitution
and Congress. See, e.g., Kokkonen v. Guardian
Life Ins. Co., 511 U.S. 375, 377 (1994). A “strong
presumption” against removal jurisdiction exists.
Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir.
1992). 28 U.S.C. § 1452(a) allows a party to
“remove any claim or cause of action in a civil action
to the district court for the district where such action is
pending” if the district court has jurisdiction of the
claim or cause of action under 28 U.S.C. § 1334. Section
1334(b) vests district courts with “original but not
exclusive jurisdiction of all civil proceedings arising under
title 11 or arising in or related to cases under title
11.” 28 U.S.C. § 1334(b). Under the Pacor
test, adopted by the Ninth Circuit, federal courts have
“related to” jurisdiction over any proceeding
where “the outcome could conceivably have any effect on
the estate being administered in bankruptcy.” In re
Pegasus Gold Corp., 394 F.3d 1189, 1193 (9th Cir. 2005)
(citing Pacor, Inc. v. Higgins, 743 F.2d 984, 994
(3rd Cir. 1984)).
28 U.S.C. § 1452(b), the district court may remand a
claim or cause of action removed to federal court arising
under Title 11, or arising in or related to a Title 11 case,
“on any equitable ground.” McDowell Welding
& Pipefitting, Inc. v. U.S. Gypsum Co., 285 B.R.
460, 475 (D. Or. 2002). Section 1452(b) has been understood
to permit remand based on general fairness and reasonableness
considerations. Things Remembered, Inc. v. Petrarca,
516 U.S. 124, 133 (1995) (defining “equitable” in
§1452(b) to mean appropriate, and not an effort to
distinguish between law and equity); see also
Christie v. Chong, No. C-02-0472 EDL, 2002 WL
598428, at *4 (N.D. Cal. Apr. 10, 2002) (noting that §
1452(b)'s reference to “equitable ground”
means one that is fair and reasonable).
Ninth Circuit applies a fourteen factor test, the
“Cedar Funding factors, ” for
determining whether equitable grounds support remand: (1) the
effect on the efficient administration of the estate; (2) the
extent to which state-law issues predominate; (3) the lack of
novelty or difficulty of applicable law; (4) the presence of
related state-court proceedings; (5) the lack of
jurisdictional bases for removal other than section 1334(b);
(6) the remoteness to the main bankruptcy case; (7) the
absence of any core proceeding; (8) the inapplicability of
severing claims; (9) the burden on the federal docket; (10)
the likelihood of forum shopping; (11) the right to a jury
trial; (12) the presence of non-debtor parties; (13) comity;
and (14) the possible prejudice to the plaintiff. In re
Cedar Funding, Inc., 419 B.R. 807, 820 (9th Cir. B.A.P.
2009); see also Machine Zone, Inc. v. Peak Web,
LLC, No. 3:16-cv-01832-SI, 2017 WL 517796, at *5 (D. Or.
Feb. 7, 2017); Slinde & Nelson, LLC v. Luneke,
No. 3:16-cv-1914-HZ, 2017 WL 721242, at *2 (D. Or. Feb. 22,
2017); Cox v. Holcomb Family Ltd. Partnership, Adv.
No. 14- 3260, 2015 WL 128001, at *1 (Bankr. D. Or. Jan. 8,
2015). Courts also have considered judicial
economy, the effect of bifurcating the claims and parties,
and the possibility of inconsistent results. Cox,
2015 WL 128001, at *1 (citing In re Sequoia
Village, LLC, Bankr. No. 11-64880-fra11, 2012 WL 478926
at *1 (Bankr. D. Or. Feb. 14, 2012)); see also
Western Helicopters, Inc. v. Hiller Aviation, Inc.,
97 B.R. 1, 2 (E.D. Cal. 1988) (finding equitable remand
appropriate after considering the effect of bifurcating the
claims and parties to an action and the possibilities of
inconsistent results). Given that 28 U.S.C. § 1452(b)
provides broad authority to remand “on any equitable
ground, ” any one of the factors discussed above may be
sufficient to support remand. Machine Zone, 2017 WL
517796, at *3; see also Slinde &
Nelson, 2017 WL 721242, at *5; Stichting
Pensioenfonds ABP v. Countrywide Fin. Corp., 447 B.R.
302, 211 (C.D. Cal. 2010).
in this circuit and elsewhere have remanded claims arising
from exposure to the talc used in Johnson & Johnson
products on the basis of equity. See, e.g., Lewis, et al.
v. Johnson & Johnson, et al., No. 1:19-mp-56001-RLM
(Bankr. S.D. Ind. May 20, 2019); Aitchison, et al. v.
Johnson & Johnson, et al., No. CV 19-0752-FMO (GJSx)
(C.D. Cal. May 2, 2019); Haggerty v. Johnson &
Johnson, et al., No. CV 19-3497-JFW (FFMx) (C.D. Cal.
May 2, 2019). In two orders dated May 21, 2019, the Central
District of California remanded a total of 150 such cases on
equity grounds. In re: Removed State Court Talc Actions
Against Johnson & Johnson, et al., No.
2:19-cv-03150-CJC-JC (C.D. Cal. May 21, 2019); In re:
Removed State Court Talc Actions Against Johnson &
Johnson, et al., No. 2:19-cv-03129-CJC-JC (C.D. Cal. May
21, 2019). Likewise, in this action, regardless of
whether the claims against J&J qualify as “related
to” the bankruptcy, the relevant factors for
consideration under section 1452(b) support an equitable
remand. In re Schwartz, No. 5:09-cv-05831 EJD, 2012
WL 899331, at *2 (N.D. Cal. Mar. 15, 2012) (“whether
the state court actions qualify as actions ‘related
to' the bankruptcy case is no longer the operative
question because the relevant factors for consideration under
§1452(b) each support an equitable remand”).
action will have limited effect on the administration of
bankruptcy proceedings. It is remote from any bankruptcy
proceeding-the debtor is not a party-and this action does not
present any bankruptcy issues. See Bally Total
Fitness v. Contra Costa Retail Ctr., 384 B.R. 566, 573
(N.D. Cal. Feb. 20, 2008); see also Slinde &
Nelson, 2017 WL 721242, at *4 (remanding where named
defendants were non-debtor parties); Parke v. Cardsystems
Sol., Inc., No. C 06-04857 WHA, 2006 WL 2917604, at *5
(N.D. Cal. Oct. 11, 2006) (considering that there are
non-bankruptcy related issues between non-debtors in deciding
to remand); In re Enron, 296 B.R. 505, 509 (C.D.
Cal. 2003) (favoring equitable remand where none of the
parties were debtors).
the removed state law claims against J&J are non-core. As
defined by the Ninth Circuit, “if the proceeding does
not invoke a substantive right created by the federal
bankruptcy law and is one that could exist outside of
bankruptcy[, ] it is not a core proceeding. . . .”
In re ACI-HDT Supply Co., 205 B.R. 231, 237 (9th
Cir. B.A.P. 1997) (quoting In re Eastport Assoc.,
935 F.2d 1071, 1076 (9th Cir. 1991)); see also
In re People's Choice Home Loan, No.
8:07-10765-RK, 2007 WL 9637067, at *4 (Bankr. C.D. Cal., Oct.
31, 2007) (finding the removed state court action was
non-core because it was based on California common and
statutory law and not dependent on bankruptcy law). Because
the claims do not qualify as a core proceeding,
“federal court is not a more appropriate forum than
state court for resolution of the dispute.” Estate
of Scott v. Cervantes, No. CV 08-03293 MMM (CWx), 2008
WL 11337657, at *5 (C.D. Cal. July 29, 2008); see
also Slinde & Nelson, 2017 WL 721242, at *4
(favoring remand where alleged claims are not intertwined
with “core” bankruptcy matters).
judicial economy weighs in favor of remanding non-core
proceedings. J&J's removal was based on a desire to
“centralize the adjudication of claims” by
ultimately transferring the claims against it to the federal
bankruptcy court in the District of Delaware. Notice 4, ECF
#1. However, “[s]ince the action is not a core
proceeding, the bankruptcy judge will be required to submit
proposed findings of fact and conclusions of law to a
district court for de novo review . . . . In other words, the
case ultimately would have to be determined outside of the
bankruptcy court, and thus judicial economy favors
remand.” Estate of Scott, 2008 WL 11337657, at
request for a jury trial also undermines any judicial
efficiency to be achieved by removal. The fact that a
plaintiff seeks a jury trial-which will prevent the
bankruptcy court from hearing the case-demonstrates that no
judicial efficiency will be achieved by removal, and that
equity supports a remand. Id. at *6; City of
Moreno Valley, No. EDCV02-1387-VAP (SGLX), 2003 WL
22126450, at *3 (C.D. Cal. Mar. 21, 2003) (noting that remand
was appropriate in part because “this is a case where
the parties are entitled to a jury trial”). Indeed,
“[c]ourts have granted equitable remand solely
on the basis of a party's entitlement to a jury trial
when that party's action was not a ‘core
proceeding.'” Fed. Home Loan Bank of Seattle v.
Barclays Capital, Inc., No. C10-0139 RSM, 2010 WL
3662345, at *7 (W.D. Wash. Sept. 1, 2010).
it is compelling that issues of state law predominate. Courts
consistently have exercised their discretion to remand under
section 1452(b) where a case is grounded exclusively in state
law. SeeParke, 2006 WL 2917604 at *4
(finding that remand was appropriate where “[a]ll seven
of plaintiff's claims were brought under California
common or statutory law”); In re Bay Area Material
Handling, Inc., No. C 95-01903 CW, 1995 WL 747954, *9
(N.D. Cal. Dec. 6, 1995) (“the predominance of state
law issues supports remand, given that a state court is
‘better able to hear and determine a suit involving
questions of state law than is a bankruptcy
court'”) (quoting Western Helicopters, 97
B.R. at 6). Here, there are no “difficult or unsettled
issues of federal law” presented by the two state law
claims alleged. MBIA Ins. Corp. v. Indymac ABS,
Inc., No. CV 09-07737 SJO (PJWx), 2009 WL 10675774, at
*2 (C.D. ...