Medallic Art Company LLC v. Calvert, 2:16-cv-01895

Northwest Territorial Mint ("Mint") filed Chapter 11 on April 1, 2016; a Chapter 11 trustee (Mike Calvert) was appointed to replace Mr. Hansen.
Medallic Art Company ("Medallic" or Plaintiff) alleges the trustee wrongfully assumed exclusive control of certain personal and intellectual property (the "Disputed Properties") that Medallic owned or used under leases/licenses with Mint.
Medallic filed an adversary proceeding asserting breach of contract, injunction, conversion, and declaratory relief; the trustee counterclaimed for substantive consolidation, alter ego, fraudulent transfer, and unjust enrichment.
Medallic moved to withdraw the reference to the district court, arguing it has a right to a jury trial on its claims and on the trustee’s counterclaims.
The bankruptcy court had overseen the case since the petition and had already addressed related procedural disputes (including replacing Hansen as the debtor-in-possession).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the reference should be withdrawn	Medallic argues it is entitled to a jury trial on its claims and counterclaims, so withdrawal is required	Trustee argues most claims are core or bankruptcy-unique, bankruptcy court is familiar, and withdrawal would delay proceedings	Denied — no sufficient cause to withdraw the reference
Core vs. non-core characterization of claims	Medallic contends its state-law claims should be heard de novo and are non-core	Trustee contends most claims (and key counterclaims) are core because they implicate administration of the estate	Court: Majority of claims and counterclaims are core; only some counterclaims (fraudulent transfer under Stern and unjust enrichment) treated as non-core
Right to jury trial	Medallic says it preserved jury rights and jury is required for legal claims (breach, conversion)	Trustee asserts jury rights were waived by filing a proof of claim and many claims are equitable or part of allowance/disallowance process	Held: No Seventh Amendment jury right for any claim — either the right never existed or was waived by proof of claim
Forum shopping and timeliness of motion	Medallic says motion was timely and not forum shopping	Trustee argues Medallic’s delay and the context (replacement of Hansen) suggest forum shopping; timely withdrawal motions should be filed promptly	Held: Factor favors trustee — Medallic’s three-month delay and circumstances raise forum-shopping concerns

In re Orion Pictures Corp., 4 F.3d 1095 (2d Cir.) (framework for evaluating withdrawal: core/non-core and related factors)
Security Farms v. International Brotherhood of Teamsters, 124 F.3d 999 (9th Cir.) (factors for withdrawal and efficiency considerations)
In re Cinematronics, Inc., 916 F.2d 1444 (9th Cir.) (bankruptcy courts’ authority over core proceedings and jury-trial limitations)
Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (U.S. 1989) (Seventh Amendment test and waiver in bankruptcy context)
Stern v. Marshall, 564 U.S. 462 (U.S. 2011) (limits on bankruptcy courts adjudicating certain claims without Article III adjudication)
Langenkamp v. Culp, 498 U.S. 42 (U.S. 1990) (creditor’s proof of claim may waive jury rights as to related counterclaims)
In re Bonham, 229 F.3d 750 (9th Cir.) (substantive consolidation is a core, equitable bankruptcy doctrine)
In re Bellingham Ins. Agency, Inc., 702 F.3d 553 (9th Cir.) (fraudulent-transfer claims are statutorily core but implicate Stern limits)
In re Kincaid, 917 F.2d 1162 (9th Cir.) (bankruptcy court’s role in determining nature and extent of estate property)