BGC Partners, Inc. v. Avison Young (Canada), Inc., 2:15-cv-00531

Background

Plaintiffs BGC Partners and affiliates acquired Grubb & Ellis (G&E) assets after G&E’s 2012 bankruptcy sale and allege Avison Young engaged in a campaign to steal commissions, personnel, offices, trade secrets and business opportunities from G&E during and after the bankruptcy.
Plaintiffs assert 13 state-law claims (e.g., tortious interference, Nevada RICO, trade secret theft, conversion, unjust enrichment) and allege violations of the automatic stay and criminal theft of bankruptcy assets.
Defendants removed the action to federal court under federal bankruptcy jurisdiction; Plaintiffs moved to remand to state court.
Defendants argue federal jurisdiction exists because the claims are related to the G&E bankruptcy, require interpretation of the Asset Purchase Agreement (APA) and raise bankruptcy-law questions; Plaintiffs contend any impact on the closed bankruptcy is speculative.
The district court held a hearing, analyzed related-to and arising-under jurisdiction and abstention doctrines, and denied Plaintiffs’ motion to remand.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
1. Related-to bankruptcy jurisdiction	Claims do not depend on bankruptcy law or on interpretation of APA; any estate impact is speculative	Claims require interpretation of APA and bankruptcy rulings; allegations include stay violations and theft from the estate	Court: Related-to jurisdiction exists because resolution will likely require interpreting the APA and resolving bankruptcy-law questions
2. Arising-under (core) jurisdiction	Claims are state-law and do not arise under Title 11	Alleged automatic-stay violations and potential effect on estate liquidation invoke Title 11	Court: No arising-under jurisdiction — claims are not core proceedings implicating administration of the estate
3. Mandatory abstention under 28 U.S.C. §1334(c)(2)	Mandatory abstention applies because this is a state-law action related to a bankruptcy that can be timely adjudicated in state court	If federal jurisdiction (arising-under) or removal occurred, mandatory abstention does not require remand	Court: Mandatory abstention does not apply where defendants removed the state action and no parallel state proceeding remains; denial of remand warranted
4. Permissive abstention / equitable remand	Even if not mandatory, court should abstain or remand in interest of comity	Removal was proper; factors do not require equitable remand	Court: Declines to abstain or remand under discretionary standards; keeps case in federal court

Key Cases Cited

Hawaii ex rel. Louie v. HSBC Bank Nevada, N.A., 761 F.3d 1027 (9th Cir. 2014) (removal burden and strict construction of removal statutes)
Merrell Dow Pharm., Inc. v. Thompson, 478 U.S. 804 (U.S. 1986) (when a claim "arises under" federal law)
Empire Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677 (U.S. 2006) (Grable four-part test for federal-question jurisdiction over state law claims)
Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308 (U.S. 2005) (special-and-small-category federal-question jurisdiction)
In re Wilshire Courtyard, 729 F.3d 1279 (9th Cir. 2013) (post-confirmation close nexus test for related-to jurisdiction)
In re Pegasus Gold Corp., 394 F.3d 1189 (9th Cir. 2005) (claims requiring interpretation of plan/settlement confer related-to jurisdiction)
In re Fietz, 852 F.2d 455 (9th Cir. 1988) (related-to jurisdiction when outcome could affect estate)
In re Ray, 624 F.3d 1124 (9th Cir. 2010) (limits on related-to jurisdiction where claims could exist apart from bankruptcy)
Celotex Corp. v. Edwards, 514 U.S. 300 (U.S. 1995) (statutory core/noncore distinction under Title 11)
Schultze v. Chandler, 765 F.3d 945 (9th Cir. 2014) (post-petition state-law claims against trustees are core proceedings)
In re Tucson Estates, Inc., 912 F.2d 1162 (9th Cir. 1990) (multi-factor test for permissive abstention)
In re Lazar, 237 F.3d 967 (9th Cir. 2001) (abstention/remand rules where case removed from state court)
Security Farms v. Int’l Bhd. of Teamsters, 124 F.3d 999 (9th Cir. 1997) (related-state proceedings and abstention/remand principles)
In re Eastport Associates, 935 F.2d 1071 (9th Cir. 1991) (abstention analysis pre-dating Lazar)