United States District Court, D. Maryland, Southern Division
J. HAZEL UNITED STATES DISTRICT JUDGE
Monica Graham Farmer originally filed this case as an
Adversary Proceeding against Defendants Macy's Inc. and
Macy's Retail Holdings. Inc. in the United States
Bankruptcy Court for the District of Maryland, see Farmer
v. Macy's Inc., AP No. LSS-16-0350. within her
Chapter 13 bankruptcy case, see In re Farmer. BK No.
LSS-14-15219. In the Adversary Complaint. Plaintiff alleges
various claims of employment discrimination based on age.
disability, and race against her former employer. Macy's.
Doc. 1. Now pending before this Court is
Plaintiffs Motion to Withdraw the Reference to the Bankruptcy
Court and Transfer Proceedings to the U.S. District Court for
the District of Maryland. ECF No. I. Defendants have not
entered an appearance in this matter. Upon consideration of
the Motion to Withdraw the Reference and relevant
authorities, the Motion shall be granted, and the action
transferred to the U.S. District Court for the District of
Maryland as a civil action.
general, the District Court has "original and exclusive
jurisdiction of all cases under title 11," the
Bankruptcy Code. In re TMST. Inc.. No. 09-17777 NYA.
2015 WL 408007.. at *3 (D. Md. July 6. 2015) (citing 28
U.S.C. Â§ 1334(a)). The District Court may. however, refer
"any or all cases under title II and any or all
proceedings arising under title II or arising in or related
to a case under title II ... to the bankruptcy judges for the
district." Id. (citing 28 I LS.C. * I57(a)::
see a/so Loc. R. 402 (D. Md. July J.
2(162. By the same token, the District Court can
withdraw the reference of the case to the Bankruptcy Court.
28 U.S.C. * 157(d) provides:
The district court may withdraw, in whole or in part, any
case or proceeding referred under this section, on its own
motion or 00 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 II and
other laws of the United States regulating organizations or
activities affecting interstate commerce.
28 U.S.C. Â§ 157 (d). If the proceeding in the bankruptcy
court comes under the second clause of * 157(d). "it
triggers mandatory withdrawal and. upon timely motion, the
proceeding must be removed to the district court."
Mooring Capital Fund LLC' v. Sullivan,
NO.3:16-CV-74. 2016 WL 4628572. at *4 (N.D. W.Va. Sept. 6.
2016.. If the proceeding comes under the first clause.
"it triggers permissive withdrawal and the district
court will conduct a review of six factors to determine
whether it should exercise its discretion to withdraw the
reference to the bankruptcy court.' Id.
respect to mandatory withdrawal. "[t]he great weight of
the case law interpreting Â§ 157(d) holds that this seemingly
broad language .. . should be narrowly read." In re
Merryweather Importers, Inc., 179 B.R. 61. 62 (D. Md.
1995) (compiling cases). Indeed. "mandatory withdrawal
should only be made where substantial and material
consideration of non-bankruptcy statutes is necessary in the
case." Id. Therefore. whereas cases involving
"federal questions that arc complex or arc of first
impression must be withdrawn from reference'" cases
that merely involve "straightforward application of
federal statutes to a particular set of facts" would not
come under the ambit of mandatory withdrawal, Id.
Although Plaintiffs Complaint alleges e1aims under various
federal employment discrimination statutes. the Court docs
not find mandatory withdrawal to be required. Nonetheless,
because the Court agrees that permissive withdrawal is
appropriate, it need not definitely resolve whether mandatory
withdrawal applies in this case.
permissive withdrawal., the District Court "has broad
discretion in deciding whether reference should be withdrawn
for cause shown." In re Millennium Studios, Inc..
286 B.R. 300. 303 (D. Md. 2002). In determining whether
cause exists for withdrawal., the Court considers "the
following factors: (I) whether the matter at issue between
the parties is 'core-within the meaning of Section
157(b)(2) of the Bankruptcy Code; (2) uniformity of
bankruptcy administration: (3) forum shopping: (4)
conservation of creditor and debtor resources: (5) expediency
of the bankruptcy proceeding: (6) the likelihood of a jury
trial." Albert r. Site Mgmt., Inc.. 506 B.R.
453.455 (D. Md. 2014): see also In re Merryweather
Importers. Inc.. 179 B.R. 61. 63 (D. Md. 1995) (noting
that with respect to the sixth factor. "the fact that
only equitable issues arc posed, not requiring a jury trial,
falling within the traditional equitable powers of a
bankruptcy judge as chancellor" would counsel in favor
of keeping the case in bankruptcy court). "It is the
movant's burden to show cause for the permissive
withdrawal of reference to bankruptcy court."
Albert, 506 B.R. at 455 (citing Millennium
Studios, 286 B.R. at 303).
response to the Court's Letter Order dated July 12.207, .
Plaintiff submitted her brief in support of the Motion to
Withdraw the Reference. ECF NO.5. The Court finds that,
applying the above-mentioned factors set forth in
Albert and In re MerryWeather, withdrawing
the reference to the Bankruptcy Court is appropriate. First,
the Adversary Proceeding, asserting solely employment
discrimination claims under the Americans with Disabilities
Act ("ADA"). Age Discrimination in Employment Act
("ADEA"). and 42 U.S.C. Â§ 1981. does not constitute
a "core" bankruptcy proceeding within the meaning
of Section 157(b)(2) of the Bankruptcy Code. "[C]ore
proceedings arc those matters integral to the core bankruptcy
function of restructuring debtor-creditor rights, including
all necessary aspects of a bankruptcy case." Edgcomb
Metals CO. v. Eastmet Corp.. 89 B.R. 5465 548 (D. Md.
1988) (internal citations and quotations marks omitted). Such
proceedings are "generally defined as a controversy that
'would have no practical existence hut for the
bankruptcy." Alber,, 506 B.R. at 456 (citing
Grausz v. Englander, 321 F.3d 467. 471 (4th Cir.
2003)) (emphasis in original). Plainiiff's employment
discrimination claims are plainly not integral to bankruptcy
functions and therefore are not core. Cf. In re
Millennium Studios, Inc.. 286 B.R. 300. 306 (D. Md.
2002) (withdrawing reference of Plaintiffs state contract and
tort claim:; reasoning that despite "the close and
significant relationship between Plaintiffs claims and its
bankruptcy case . . . with regard to the substantive law on
which Plaintiffs claims are based, this adversary proceeding
is not related enough to the Held of bankruptcy law to be
appropriately subject to the jurisdiction of and final
determination by a bankruptcy court."); In re
Commerce. LLC. No. AP 15-69-JFS. 2015 WL 405547.. at *2
(D. Md. July 1.2015) (withdrawing reference of Plaintff's
unjust enrichment claims and noting "[t]his action is
clearly not a 'core" proceeding.").
of the remaining factors also counsel in favor of withdrawing
the reference. The uniformity of bankruptcy administration
will not be negatively impacted, and it is more expedient to
try the ease in District Court, as the Adversary Proceeding
involves subject matter not typically handled by the
Bankruptcy Court. See Allen v. Nat'l C'ity
Mortg.. No. 2:04 MC I88, 2006 WL 389999, . at *2 (S.D.
W.Va, July 13.2006) (granting motion to withdraw and noting
that "[w]ithdrawing the reference certainly will not
affect the uniform administration of bankruptcy law because
the Amended Complaint raises issues governed by non-Title II
law."). The Court further finds that the risk of forum
shopping by the Plaintiff is low. as the Bankruptcy Court
itself recommended that Plaintiff tile a motion to withdraw
the reference or face dismissal of the Complaint.
See Doc. 20.
Fed. R, Civ. P. 38 provides that where the right to jury
trial is provided by the Constitution or statute, a party may
demand a jury trial. Once demanded. .trial on all issues so
demanded must be by jury unless . . . the court, on motion or
its own. finds that on some or all of those issues there is
no federal right to a jury trial'" Fed.R.Civ.P.
39(a.. In the Adversary Complaint. Plaintiff has requested
monetary damages and a jury trial. See Doc. I at 34.
Additionally, and for that reason, creditor and debtor
resources would likely be conserved by transferring the
action to the District Court sooner rather than later.
Accordingly, permissive withdrawal is proper.
reasons stated above. Plaintiffs Motion to Withdraw the
Reference. ECF No. I. is granted. The Court will address
Defendants" default in forthcoming ...