United States District Court, C.D. California
Tony Watson, et al.
Suzuki Motor Corporation, et al.
Present: The Honorable PERCY ANDERSON, UNITED STATES DISTRICT
CIVIL MINUTES - GENERAL
IN CHAMBERS - COURT ORDER
Court is in receipt of a Notice of Removal filed by defendant
Suzuki Motor of America, Inc. (“SMAI”) on August
15, 2019. SMAI asserts that this Court has subject matter
jurisdiction over the claims asserted against it by
plaintiffs Tony and Ellen Watson (“Plaintiffs”)
pursuant to the Court's bankruptcy removal jurisdiction
under 28 U.S.C. § 1452(a) because, according to SMAI,
Plaintiffs' claims against SMAI “arise in” or
“relate to” bankruptcy proceedings for purposes
of 28 U.S.C. § 1334. Specifically, according to the
Notice of Removal, the United States Bankruptcy Court for the
Central District of California entered an order on March 15,
2013, in No. 8:12-bk-22808-SC, approving the confirmation of
a bankruptcy plan in which SMAI acquired the assets of debtor
American Suzuki Motor Corporation (“ASMC”). The
Bankruptcy Court's confirmation order limited the
liability of SMAI to only those liabilities of ASMC that SMAI
expressly assumed, and that other than those
expressly-assumed liabilities, SMAI would not be considered a
legal successor of ASMC. The confirmation order included a
provision stating that “all Persons are forever
prohibited and enjoined from taking any action against [SMAI]
based on Successor Liability, including commencing or
continuing any action or other proceeding . . . against
[SMAI] with respect to any liens, claims, encumbrances and
interests against [ASMC] or [ASMC]'s property.”
courts are of limited jurisdiction, having subject matter
jurisdiction only over matters authorized by the Constitution
and Congress. See, e.g., Kokkonen v. Guardian
Life Ins. Co., 511 U.S. 375, 377, 114 S.Ct. 1673, 1675,
128 L.Ed.2d 391 (1994). A “strong presumption”
against removal jurisdiction exists. Gaus v. Miles,
Inc., 980 F.2d 564, 567 (9th Cir. 1992). In seeking
removal, the defendant bears the burden of proving that
jurisdiction exists. Scott v. Breeland, 792 F.2d
925, 927 (9th Cir. 1986).
U.S.C. § 1452(a) allows a party to “remove any
claim or cause of action in a civil action to the district
court for the district where such action is pending” if
the district court has jurisdiction of the claim or cause of
action under 28 U.S.C. § 1334. Section 1334(b) vests
district courts with “original but not exclusive
jurisdiction of all civil proceedings arising under title 11
or arising in or related to cases under title 11.” Once
a claim is removed pursuant to 28 U.S.C. § 1452(a), the
court to which the claim has been removed “may remand
such claim or cause of action on any equitable ground.”
28 U.S.C. § 1452(b). An order remanding an action
pursuant to § 1452(b) “is not reviewable by appeal
or otherwise by the court of appeals under section 158(d),
1291, or 1292 [of Title 28] of by the Supreme Court.”
Id. Section 1452(b)'s “‘any
equitable ground' remand standard is an unusually broad
grant of authority. It subsumes and reaches beyond all of the
reasons for remand under nonbankruptcy removal statutes. . .
. At bottom, the question is committed to the sound
discretion of the . . . judge.” McCarthy v.
Prince, 230 B.R. 414, 417 (B.A.P. 9th Cir. 1999).
assessing whether “equitable grounds” exist to
remand actions removed under § 1452, courts have looked
to a number of factors:
These factors have included, among other things, judicial
economy, comity and respect for state law decision-making
capabilities, the impact that remand would have upon the
orderly administration of the debtor's bankruptcy case,
the effect of bifurcating claims and parties to an action and
the possibilities of inconsistent results, the predominance
of state law issues and nondebtor parties, and the extent of
any prejudice to nondebtor parties.
In re TIG Ins. Co., 264 B.R. 661, 665-66 (Bankr.
S.D. Cal. 2001) (citing W. Helicopters, Inc. v. Hiller
Aviation, Inc., 97 B.R. 1, 2 (E.D. Cal. 1988)).
“Because Section 1452(b) affords ‘an unusually
broad grant of authority,' any one of the relevant
factors may provide a sufficient basis for equitable
remand.” Stichting Pensioenfonds ABP v. Countrywide
Fin. Corp., 447 B.R. 302, 310 (C.D. Cal. 2010) (quoting
In re Roman Catholic Bishop of San Diego, 374 B.R.
756, 761 (Bankr. S.D. Cal. 2007)).
Plaintiffs' Complaint alleges claims against SMAI, Suzuki
Motor Corporation, Johnson Controls, Inc., Adient U.S. LLC,
and Luan Trong Huynh, for strict liability, negligent product
liability, negligence, and loss of consortium, arising out of
a December 5, 2018, automobile accident. According to the
Complaint, Tony Watson was driving a 2000 Suzuki Swift when
his vehicle was struck from behind by a vehicle driven by
Luan Trong Huynh. Plaintiffs allege that the Suzuki Swift was
defective because the driver's seat back failed and
collapsed rearward, causing Mr. Watson's body to become
unrestrained, despite the fact that he was wearing a lap and
shoulder belt. The accident rendered Mr. Watson a paraplegic.
Notice of Removal alleges that the Court possesses bankruptcy
jurisdiction only over the claims asserted against SMAI.
“The ‘close nexus' test determines the scope
of bankruptcy court's post-confirmation ‘related to
jurisdiction.” In re Wilshire Courtyard, 729
F.3d 1279, 1287 (9th Cir. 2013) (citing Montana v.
Goldin (“In re Pegasus Gold
Corp.”), 394 F.3d 1189, 1194 (9th Cir. 2005)).
“The close nexus test ‘recognizes the limited
nature of post-confirmation jurisdiction but retains a
certain flexibility.'” Id. (quoting In
re Pegasus Gold Corp, 394 F.3d at 1194).
“[M]atters affecting ‘the interpretation,
implementation, consummation, execution, or administration of
the confirmed plan will typically have the requisite close
nexus.'” In re Pegasus Gold Corp., 394
F.3d at 1194 (quoting In re Resorts Int'l, Inc.,
372 F.3d 154, 166-67 (3d Cir. 2004)).
the Court may have jurisdiction over Plaintiffs' claims
against SMAI, the Court concludes that equitable grounds
support remand. Because the Court does not have original
jurisdiction over the claims asserted against the defendants
other than SMAI, those claims are subject to remand or
dismissal, see 28 U.S.C. § 1367(c), which could
result in Plaintiffs having to pursue their claims in two
forums, or otherwise poses a risk that Plaintiffs claims
against the remaining defendants would be delayed while the
Court resolves the bankruptcy-related issues concerning SMAI.
The Court also concludes that determining the scope of
SMAI's potential successor liability does not appear to
present a substantial question of bankruptcy law and that
none of the parties are the debtors in the underlying
bankruptcy proceeding. Nor does SMAI's potential
successor liability appear to threaten the implementation,
consummation, execution, or administration of a the
Bankruptcy Court's plan confirmation that occurred more
than six years ago. Moreover, because Plaintiffs assert only
California state law claims against defendants comity also
favors remand. See Estate of Scott v. Cervantes, No.
CV 08-03293 MMM (CWx), 2008 WL 11337657, at *4 (C.D. Cal.
July 29, 2008) (“Where issues of state law predominate,
comity . . . favors remand.”); see also
McCarthy, 230 B.R. at 418 (“State courts are, by
definition, fully competent to resolve disputes governed by
of the foregoing reasons, the equities favor remanding this
action. The action is hereby remanded to the Los Angeles
County Superior Court, ...