Abrams v. PG&E Corporation

Opinion

In re: Case No. 25-cv-06026-HSG

PG&E CORPORATION, et al., ORDER DENYING MOTION TO TRANSFER ADVERSARY Debtors. PROCEEDING Re: Dkt. No. 1

Plaintiff, v.

PG&E CORPORATION, et al., Defendants.

Pending before the Court is a motion filed by pro se Plaintiff William B. Abrams to transfer his adversary proceeding from Bankruptcy Judge Dennis Montali to another judge within the United States Bankruptcy Court for the Northern District of California. See Dkt. No. 1. For the reasons detailed below, the Court DENIES the motion. Plaintiff initially filed the adversary proceeding in June 2025 against PG&E Corporation and Pacific Gas and Electric Company (collectively, “PG&E”), the Fire Victim Trust, and the Trust’s oversight committee and current and former trustees. See Dkt. No. 1-5. Plaintiff alleges that the Fire Victim Trust, which was created as part of the confirmed bankruptcy Plan, suffers generally Dkt. No. 1-4, Ex. A. Plaintiff contends that as a result, he and other fire victims have been undercompensated for their losses. Id. Although styled as a motion to transfer the adversary proceeding to another judge, Plaintiff’s pending motion relies on 28 U.S.C. § 157(d), the statute governing a district court’s authority to withdraw the reference of a proceeding to bankruptcy court. District courts have “original but not exclusive jurisdiction” over all bankruptcy proceedings. See 28 U.S.C. § 1334(b). Such proceedings fall into one of two categories: “core proceedings, in which the bankruptcy court may enter appropriate orders and judgments,” and “non-core proceedings, which the bankruptcy court may hear but for which it may only submit proposed findings of fact and conclusions of law to the district court for de novo review.” Sec. Farms v. Int’l Bhd. of Teamsters, Chauffers, Warehousemen & Helpers, 124 F.3d 999, 1008 (9th Cir. 1997) (quoting 28 U.S.C. § 157). “Actions that do not depend on bankruptcy laws for their existence and that could proceed in another court are considered ‘non-core.’” Id. In the Northern District of California, all bankruptcy cases are automatically referred to the bankruptcy court. See B.L.R. 5011-1(a) (referring all bankruptcy cases in the Northern District of California to its bankruptcy court); see also 28 U.S.C. § 157(a) (“Each district court may provide that any or all cases under title 11 and any or all proceedings arising under title 11 or arising in or related to a case under title 11 shall be referred to the bankruptcy judges for the district.”). On a timely motion, however, any party may seek to withdraw that reference under 28 U.S.C. § 157(d). Under Section 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. 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. The statute creates two bases for withdrawal: mandatory and permissive. Under either, “[t]he withdrawn.” In re Heller Ehrman LLP, 464 B.R. 348, 351–32 (N.D. Cal. 2011) (citing In re Larry’s Apartment, LLC, 210 B.R. 469, 472 (Bankr. D. Ariz. 1997)). Withdrawal is mandatory where “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). “Overwhelmingly courts and commentators agree that the mandatory withdrawal provision cannot be given its broadest literal reading, for sending every proceeding that required passing ‘consideration’ of non-bankruptcy law back to the district court would eviscerate much of the work of the bankruptcy courts.” In re Vicars Ins. Agency, Inc., 96 F.3d 949, 952 (7th Cir. 1996) (quotation omitted). Courts in the Ninth Circuit have concluded that withdrawal is mandatory under Section 157(d) “when [non-title 11] issues require the interpretation, as opposed to mere application, of the non-title 11 statute, or when the court must undertake analysis of significant open and unresolved issues regarding the non-title 11 law.” See In re Tamalpais Bancorp, 451 B.R. 6, 8–9 (N.D. Cal. 2011). Under this approach, the moving party “must do more than merely suggest that novel issues of law could possibly arise in a bankruptcy proceeding.” Id. Withdrawal is permissive “for cause shown.” 28 U.S.C. § 157(d). “In determining whether cause exists, a district court should consider the efficient use of judicial resources, delay and costs to the parties, uniformity of bankruptcy administration, the prevention of forum shopping, and other related factors.” Sec. Farms, 124 F.3d 1008. Despite citing § 157(d), Plaintiff makes no effort to explain why either mandatory or permissive withdrawal is appropriate here. And the Court finds that Plaintiff has not met his burden of establishing that withdrawing the reference is appropriate. The adversary proceeding will not require the interpretation—rather than application—of non-bankruptcy laws, and permissive withdrawal would be an inefficient use of judicial resources, and would harm the uniformity of bankruptcy administration. In his reply brief, Plaintiff appears to criticize Defendants and Judge Montali for 1 Plaintiff urges that it is necessary to reassign the adversary proceeding to another judge to 2 “preserve the appearance of impartiality.” See Dkt. No. 1-1 at 3. Specifically, Plaintiff suggests 3 that because he raises concerns about how the Plan was confirmed and conduct that has occurred 4 in the years since then, it would be problematic for Judge Montali—who confirmed the Plan—to 5 oversee his case. See id. at 5—6. Plaintiff also appears to reiterate allegations that he raised in a 6 motion to recuse Judge Montali back in 2022.' Plaintiff states that he “accepts” Judge Montali’s 7 denial of the prior recusal motion and “does not seek reconsideration or further recusal at this 8 time.” Dkt. No. 1-1 at 3. However, Plaintiff suggests that Judge Montali is somehow biased 9 based on professional relationships with attorneys and parties in the bankruptcy case and that he 10 has “prejudged” the adversary proceeding. See, e.g., Dkt. No. 5 at 7-11; Dkt. No. 8 at 2. Having 11 reviewed the materials in detail, the Court is simply not persuaded. At bottom, Plaintiff appears to 12 disagree with Judge Montali’s prior rulings and would prefer that another judge hear his case. 13 This is not a proper basis for withdrawal of reference or even transfer to another judge (assuming 14 the Court had such authority). 15 Iv. CONCLUSION 16 Plaintiff DENIES the pending motion to transfer the adversary proceeding, Dkt. No. 1, and 3 17 TERMINATES AS MOOT the emergency motion to stay the adversary proceeding, Dkt. No. 6. 18 The Clerk is directed to close the case. 20 Dated: 8/26/2025 21 Asipord 5 bbl HAYWOOD S. GILLIAM, JR. United States District Judge 23 24 25 26 27 28 Plaintiff previously sought to recuse Judge Montali in November 2022 under 28 U.S.C. § 455(a), which Judge Montali denied. See Dkt. No. 4-1, Exs. D-E.