United States District Court, E.D. Louisiana
ORDER AND REASONS
ZAINEY UNITED STATES DISTRICT JUDGE
the Court is a Motion to Transfer (Rec. Doc.
6) submitted by Defendant Waterman Steamship
Corporation (“Waterman”). Plaintiff Jack McElveen
(“McElveen”) opposes this motion (Rec. Doc. 9)
and Defendant has replied. (Rec. Doc. 11). Also before the
Court is a Motion to Remand or, Alternatively, for
Abstention (Rec. Doc. 10) submitted by Plaintiff
McElveen. Defendant opposes this motion (Rec. Doc. 11) and
Plaintiff has replied. (Rec. Doc. 21). The motions, both set
for submission on September 20, 2017, are before the Court on
the briefs without oral argument. The Court will address and
rule on both motions in this Order and Reasons. Having
considered the motion and memoranda of counsel, the record,
and the applicable law, the Court finds that Plaintiff's
motion to remand is GRANTED for the reasons
set forth below. Having granted Plaintiff's motion to
remand, this Court denies Defendant's motion to transfer.
to his state court Petition, Plaintiff worked as a Jones Act
seaman aboard the M/V Maersk Alabama. (Rec. Doc. 1-2, p. 2).
On or about July 24, 2012, Plaintiff was instructed to clean
out the ship's freezer. Id. Plaintiff allegedly
fell twisting his knee and hitting his back while moving a
box out of the freezer. Id. Plaintiff's injuries
allegedly occurred from this accident and Plaintiff seeks
damages for his injuries, as well as maintenance and cure
benefits, and attorney's fees. Id. at p. 5.
October 11, 2013, Plaintiff filed suit against Waterman and
ABC Insurance Company. (Rec. Doc. 10-1). Plaintiff's
suit seeks damages from Waterman pursuant to the Jones Act
and general maritime law, unseaworthiness, and maintenance
and cure. Id. On November 5, 2013, Waterman answered
Plaintiff's Petition for Damages generally denying the
allegations of Plaintiff. Id. at p. 3.
several years of litigation, Waterman filed for bankruptcy
under Chapter 11 of the U.S. Bankruptcy Code in the U.S.
Bankruptcy Court for the Southern District of New York on
July 31, 2016. (Rec. Doc. 6-1, p. 2). On March 2, 2017, the
U.S. Bankruptcy Court for the Southern District of New York
issued a “Findings of Fact, Conclusions of Law and an
Order Confirming First Amended Modified Joint Chapter 11 Plan
of Reorganization for International Shipholding Corporation
and Its Affiliated Debtors.” Id. at pp. 1-2.
On July 3, 2017, Waterman emerged from bankruptcy. (Rec. Doc.
6-1, p. 2).
August 2, 2017, Waterman removed this action from state court
to this Court. (Rec. Doc. 1). Waterman removed pursuant to 28
U.S.C. §§ 1441(a) and 1452(a), as well as Rule 9027
of the Federal Rules of Bankruptcy Procedure and alleges
jurisdiction pursuant to 28 U.S.C. §§ 157(b), 1331,
and 1334(b). (Rec. Doc. 1, p. 2).
on August 22, 2017, Waterman filed a Motion to Transfer Case
to the U.S. Bankruptcy Court for the Southern District of New
York or Alternatively, to Refer to the U.S. Bankruptcy Court
for the Eastern District of Louisiana. (Rec. Doc. 6). On
August 31, 2017, Plaintiff filed a Motion to Remand or,
Alternatively, for Abstention. (Rec. Doc. 10). Both parties
have filed their respective oppositions and replies. The
Court has consolidated its analysis of each motion, and will
rule on each motion in this Order and Reasons.
defendant may remove a civil action filed in a state court if
it at least relates to a bankruptcy case. See 28
U.S.C. §§ 1334, 1452(a). “The removing party
bears the burden of establishing that federal jurisdiction
exists” at the time of removal. De Aguilar v.
Boeing Co., 47 F.3d 1404, 1408 (5th Cir. 1995); see
also Allen v. R & H Oil & Gas Co., 63 F.3d 1326,
1335 (5th Cir. 1995) (“[T]he jurisdictional facts that
support removal must be judged at the time of removal . . .
.”). A district court must act on a timely motion to
remand based on a defect in removal procedure. 28 U.S.C.
§ 1447(c); see also Butcher v. F.D.I.C., 981
F.2d 816, 819 (5th Cir. 1993). A district court also must
remand an action if at any time before final judgment it
appears that the court lacks subject matter jurisdiction.
Law and Analysis
motion first argues that this matter should be transferred to
the U.S. Bankruptcy Court for the Southern District of New
York. (Rec. Doc. 6-1, p. 2). This argument initially relies
on 28 U.S.C. § 1409 which specifies the proper venue for
civil proceedings that arise during the course of a title 11
case and are brought in bankruptcy court. 1-4 Collier on
Bankruptcy ¶ 4.03 (16th ed. 2017). Defendant then cites
28 U.S.C. § 1412 as the proper procedural mechanism to
transfer the case to the proper venue. (Rec. Doc. 6-1, p. 2).
28 U.S.C. § 1412 states that “[a] district court
may transfer a case or proceeding under title 11 . . . to a
district court for another district, in the interest of
justice or for the convenience of the parties.”
Defendant finds additional support for transfer in 28 U.S.C.
§ 157(a). Defendant contends that this case is
related to the bankruptcy proceeding because Plaintiff is
seeking to recover from a party who went through Chapter 11
bankruptcy, and therefore any of Defendant's potential
obligations may have an effect on the administration of the
estate. (Rec. Doc. 6-1, p. 3).
Defendant argues this Court should refer the matter to the
U.S. Bankruptcy Court for the Eastern District of Louisiana
for eventual transfer to the U.S. Bankruptcy Court for the
Southern District of New York. (Rec. Doc. 6-1, p. 4). In
support, Defendant relies on Local Rule 83.4 read in
conjunction with 28 U.S.C. § 157(b)(5) of the Bankruptcy
Code to argue that ...