Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Hupp v. Educational Credit Management Corp.

September 13, 2007

PAUL HUPP, PLAINTIFF,
v.
EDUCATIONAL CREDIT MANAGEMENT CORPORATION, UNITED STATES, DEFENDANTS.



The opinion of the court was delivered by: Hayes, Judge

ORDER DENYING PLAINTIFF'S MOTION TO WITHDRAW THE REFERENCE OF THE BANKRUPTCY COURT

Pending before the court is Plaintiff's motion to withdraw the reference of the United States Bankruptcy Court for the Southern District of California. (District Court Case No. 07cv1232, Doc. # 1) (Bankruptcy Court Case No. 06-90127, Docs. # 123, 144). On August 17, 2007, the parties appeared for oral argument before the Honorable William Q. Hayes, United States District Judge.

BACKGROUND

On February 8, 2006, Plaintiff Paul Hupp initiated an adversarial proceeding in the United States Bankruptcy Court to discharge his student loan debt. (Bankruptcy Case No. 06-90127, Doc. # 1). On July 24, 2006, the Bankruptcy Court substituted Defendant Educational Credit Management Corporation as the real party in interest. (Bankruptcy Case No. 06-90127, Doc. # 23).

On October 18, 2006, Plaintiff filed a notice of his intent to argue that 11 U.S.C. § 523(a)(8) was unconstitutional as applied to Plaintiff. (Bankruptcy Case No. 06-90127, Doc. # 44). On December 14, 2006, certification that the constitutionality of an Act of Congress affecting the public interest had been drawn into question was provided to the Attorney General of the United States pursuant to 28 U.S.C. § 2403(a). (Bankruptcy Case No. 06-90127, Doc. # 64). On April 17, 2007, the United States of America moved to intervene pursuant to 28 U.S.C. § 2403(a). (Bankruptcy Case No. 06-90127, Doc. # 110). On April 24, 2007, the Bankruptcy Court granted the motion to intervene. (Bankruptcy Case No. 06-90127, Doc. # 112).

On November 27, 2006, Plaintiff moved for summary judgment in the Bankruptcy Court. (Bankruptcy Case No. 06-90127, Doc. # 49). On April 27, 2007, Educational Credit Management Corp. filed its opposition to Plaintiff's motion for summary judgment. (Bankruptcy Case No. 06-90127, Doc. # 115). On May 11, 2007, Plaintiff filed a reply in support of summary judgment. (Bankruptcy Case No. 06-90127, Doc. # 120). The Bankruptcy Court calendared Plaintiff's motion for summary judgment for hearing and oral argument on June 22, 2007. (Bankruptcy Case No. 06-90127, Doc. # 124).

On May 18, 2007, Plaintiff moved to withdraw the reference of the Bankruptcy Court. (Bankruptcy Case No. 06-90127, Docs. # 123, 144). On May 30, 2007, Defendants Educational Credit Management Corp. and the United States filed oppositions to Plaintiff's motion to withdraw the reference. (Bankruptcy Case No. 06-90127, Docs. # 129, 130, 146). On July 3, 2007, the Bankruptcy Court transmitted the motion to withdraw the reference to the United States District Court for the Southern District of California. (Bankruptcy Case No. 06-90127, Doc. # 145) (District Court Case No. 07cv1232, Doc. # 1).

STANDARD OF REVIEW

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 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 first sentence of 28 U.S.C. § 157(d) provides a district court with permissive authority to withdraw the reference of a bankruptcy court on timely motion of any party and for cause shown.

Security Farms v. International Broth. of Teamsters, Chauffers, Warehousemen & Helpers, 124 F.3d 999, 1008 (9th Cir. 1997). "In determining whether cause exists [for permissive withdrawal], 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." Id. The second sentence of 28 U.S.C. § 157(d) requires a district court to withdraw the reference of a bankruptcy court upon timely motion from any party where "the [district] 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." 28 U.S.C. § 157(d). In determining whether a case satisfies 28 U.S.C. § 157(d)'s mandatory withdrawal provisions, a court should consider whether the case requires "material consideration of non-bankruptcy federal law." Security Farms, 124 F.3d at 1008; see also 28 U.S.C. § 157(b).

A motion for permissive or mandatory withdrawal under section 157(d) must be timely. 28 U.S.C. § 157(d); Security Farms, 124 F.3d at 1007, fn. 3; Stratton v. Vita Bella Group Homes, Inc., No. 07-0584, 2007 U.S. Dist. LEXIS 40562, *6-7 (E.D. Cal. May 24, 2007); In re First Alliance Mortgage Co., 282 B.R. 894, 902 fn. 6 (C.D. Cal. 2001). "A motion to withdraw is timely if it was made as promptly as possible in light of the developments in the bankruptcy proceeding." Security Farms, 124 F.3d at 1007 fn. 3 (citing In re Baldwin-United Corp., 57 B.R. 751, 754 (S.D. Ohio 1985)). "In essence, the courts have established a requirement that the motion to withdraw the reference be made at the first reasonable opportunity as evaluated within the specific factual context presented." Stratton, No. 07-0584, 2007 U.S. Dist. LEXIS 40562, *6 (E.D. Cal. May 24, 2007) (citing, In re Chateaugay Corp., 104 B.R. 622, 624 (S.D.N.Y.1989)); but see In re: TPI International, 222 B.R. 663, 667 (S.D. Ga. 1998) (finding that a motion to withdraw the reference can be filed at any time).

The burden of establishing the propriety of withdrawing the reference is on the party seeking withdrawal. FTC v. First Alliance Mortgage ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.