443 B.R. 560
Bankr. D.P.R.2010Background
- BP removed eight Commonwealth Court actions to the bankruptcy court under 28 U.S.C. § 1452(a); Chartis moved to remand under § 1452(b).
- Actions concern CAPECO explosion and environmental/personal injury claims arising under Puerto Rico law, filed before CAPECO’s Chapter 11 petition.
- CAPECO’s bankruptcy stayed the Commonwealth Court Action under § 362, pending whether the stay includes non-debtor parties.
- Court must determine whether removal is proper (core/related-to) and whether abstention/remand is warranted.
- The court ultimately concludes the matter is non-core related and permissive abstention supports remand to Puerto Rico state court.
- Final remand to the Commonwealth of Puerto Rico Superior Court Bayamon Part.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the action is related to CAPECO’s bankruptcy | BP argues related-to jurisdiction exists; outcome affects estate | CHARTIS contends abstention/remand preferable; limited related-to scope | Related-to jurisdiction exists; action tied to estate administration |
| Core vs. non-core characterization | BP asserts core status due to estate administration | CHARTIS argues non-core mass tort pre-petition claims | Non-core related proceeding; final judgment by district court absent consent |
| Mandatory abstention applicability | BP claims festival for mandatory abstention | CHARTIS argues mandatory abstention applies | Mandatory abstention not applicable (28 U.S.C. § 157(b)(4) excludes core matters) |
| Discretionary abstention and comity | BP seeks abstention to state court for state-law claims | CHARTIS argues consideration of Telemundo factors favors abstention | Discretionary abstention warranted; factors favor remand to state court |
| Remand to state court proper under § 1452(b) | Removal not needed if remand appropriate under abstention | Remand appropriate to state court given abstention | Remand proper to Commonwealth Puerto Rico Superior Court Bayamon Part |
Key Cases Cited
- Pacor, Inc. v. Higgins, 743 F.2d 984 (3d Cir. 1984) (test for ‘related to’ jurisdiction: outcome could affect the bankruptcy estate)
- In re G.S.F. Corp., 938 F.2d 1467 (1st Cir. 1991) (defines ‘related to’ as sufficiently connected to estate administration)
- In re Mec Steel Bldgs., Inc., 136 B.R. 606 (Bankr.D.P.R. 1992) (non-core matters; pre-petition debts; actions surviving outside bankruptcy are non-core)
- In re Arnold Print Works, Inc., 815 F.2d 167 (1st Cir. 1987) (distinguishes core vs. non-core; Marathon-type suits)
- Marathon Pipe Line Co. v. Cold, 458 U.S. 50 (1982) (Marathon doctrine on core vs. state-created rights)