Houston Baseball Partners LLC v. Comcast Corp. (In re Houston Regional Sports Network, L.P.)

514 B.R. 211
CourtUnited States Bankruptcy Court, S.D. Texas
DecidedJuly 23, 2014
DocketBankruptcy No. 13-35998; Adversary No. 13-03325
StatusPublished
Cited by15 cases

This text of 514 B.R. 211 (Houston Baseball Partners LLC v. Comcast Corp. (In re Houston Regional Sports Network, L.P.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, S.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Houston Baseball Partners LLC v. Comcast Corp. (In re Houston Regional Sports Network, L.P.), 514 B.R. 211 (Tex. 2014).

Opinion

MEMORANDUM OPINION

MARVIN ISGUR, Bankruptcy Judge.

This Memorandum Opinion concerns whether the Court should remand this adversary to the state court from which it was removed. Subject to the opportunity for appellate review, the Court will abstain under 1334(c)(1) and remand the case to state court under § 1452(b).

Factual Background

On November 21, 2013, Houston Baseball Partners filed this lawsuit in the 80th Civil District Court, Harris County. Case No. 13-03325, ECF No. 1-4. Houston Baseball Partners sues for fraud, fraudulent inducement, fraud by nondisclosure, negligent misrepresentation or omission, breach of contract and civil conspiracy. ECF No. 1-4 at 21-38.

On November 29, 2013, Comcast filed its Notice of Removal to this Court. ECF No. 1. On March 14, 2014, Houston Baseball Partners filed its Motion for Remand, or Alternatively for Abstention. ECF No. 40. On May 22, 2014, the Court issued its Memorandum Opinion determining that it had subject matter jurisdiction over all the claims in this adversary proceeding, except for the breach of contract claim against McLane Champions, LLC. ECF No. 83. On the same date, the Court issued its Order setting a hearing for June 23, 2014, to determine whether the remaining [214]*214causes of action should be remanded along with the breach of contract claim. On May 30, 2014, Comcast filed its Motion to Withdraw the Reference. ECF No. 87. The McLane Entities joined Comcast’s Motion on June 2, 2014. ECF No. 88. This Court issued an Order on June 4, 2014 denying emergency consideration of the motion and stating that a hearing on withdrawal of the reference will be held after the issues of abstention and remand are decided. ECF No. 90. For the purposes of this opinion, the Court will assume the facts in the light most favorable to the non-moving parties, and accordingly assumes that the reference will be withdrawn.

Analysis

When a party files bankruptcy, suits involving claims relating to the bankruptcy may be removed to the bankruptcy court. See, e.g., Khan v. Hakim, 201 Fed. Appx. 981, 982 (5th Cir.2006). However, once before the bankruptcy court, Congress has provided multiple avenues for a party to have the proceeding remanded to state court. Parties may petition for mandatory abstention under 28 U.S.C. § 1334(c)(2), permissive abstention under 28 U.S.C. § 1334(c)(1), or equitable remand under 28 U.S.C. § 1452(b). See In re Mugica, 362 B.R. 782, 790 (Bankr.S.D.Tex.2007).

Mandatory Abstention under 28 U.S.C. § 1334(c)(2)

Section 1334(c)(2) provides that:

Upon timely motion of a party in a proceeding based upon a State law claim or State law cause of action, related to a case under title 11 but not arising under title 11 or arising in a case under title 11, with respect to which an action could not have been commenced in a court of the United States absent jurisdiction under this section, the district court shall abstain from hearing such proceeding if an action is commenced, and can be timely adjudicated, in a State forum of appropriate jurisdiction.

28 U.S.C. § 1334(c)(2).

Fifth Circuit courts determining whether mandatory abstention is appropriate have parsed this statute into a four part test: (1) the claims have no independent basis for federal jurisdiction other than § 1334(b); (2) the claims are non-core; (3) an action has been commenced in state court; and (4) the action can be timely adjudicated in state court.” In re Rupp & Bowman Co., 109 F.3d 237, 239 (5th Cir.1997); see also In re Gober, 100 F.3d 1195, 1206 (5th Cir.1996); In re Mugica, 362 B.R. 782 (Bankr.S.D.Tex.2007).

The movants here have met 3 of the 4 requirements. The action could not have been commenced in federal court without bankruptcy jurisdiction. The proceeding is related-to the bankruptcy and not a core matter. The action may be timely adjudicated in state court, as the local rules in Harris County District Court presume that a trial in every civil action will be completed within eighteen months of filing.

However, the third factor has not been satisfied. Section 1334(c)(2) requires that a state court action be commenced prior to the bankruptcy proceedings. See Special Value Continuation Partners, L.P. v. Jones, 2011 WL 5593058, at *2 (Bankr. S.D.Tex. Nov. 10, 2011). The involuntary bankruptcy petition was filed on September 27, 2013. The complaint was filed in 80th Civil District Court, Harris County on November 21, 2013. Case No. 13-35998, ECF No. 1. Because the state-court action was filed post-petition, mandatory abstention is not warranted.

[215]*215Permissive Abstention under 28 U.S.C. § 1334(c)(1)

Although the Court is not required to abstain under § 1334(c)(2), it may discretionarily decline to hear the proceeding under § 1334(c)(1). Similarly, this court may choose to remand a cause of action on any equitable ground. See In re Gober, 100 F.3d 1195 (5th Cir.1996); In re Wood, 825 F.2d 90 (5th Cir.1987). Courts consider a number of factors in deciding whether to abstain or remand. Special Value Continuation Partners, L.P. v. Jones, 2011 WL 5593058, at *7-8 (Bankr.S.D.Tex.2011). These include:

(1) Effect or lack thereof on the efficient administration of the estate if the court recommends [remand or] abstention;
(2) Extent to which state law issues predominate over bankruptcy issues;
(3) Difficult or unsettled nature of applicable law;
(4) Presence of related proceeding commenced in state court or other non-bankruptcy proceeding;
(5) Jurisdictional basis, if any, other than § 1334;
(6) Degree of relatedness or remoteness of proceeding to main bankruptcy case;
(7) The substance rather than the form of an asserted core proceeding;
(8) The feasibility of severing state law claims from core bankruptcy matters to allow judgment to be entered in state court with enforcement left to the bankruptcy court;
(9) The burden of the bankruptcy court’s docket;
(10) The likelihood that the commencement of the proceeding in bankruptcy court involves forum shopping by one of the parties;
(11) The existence of a right to a jury trial;

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514 B.R. 211, Counsel Stack Legal Research, https://law.counselstack.com/opinion/houston-baseball-partners-llc-v-comcast-corp-in-re-houston-regional-txsb-2014.