Saniri v. Christenbury Eye Center, P.A., 3:17-cv-00474

Plaintiff Niloufar Saniri sued Christenbury Eye Center, P.A., Dr. Jonathan Christenbury, and Ellie Pena-Benarroch in W.D.N.C. (3:17-cv-00474).
On January 16, 2018, Dr. Jonathan Christenbury filed a Chapter 7 voluntary petition in the Western District of North Carolina Bankruptcy Court (Case No. 18-30058).
Christenbury filed a “Suggestion of Bankruptcy” notifying this district court and the automatic stay under 11 U.S.C. § 362 halted proceedings against the debtor.
The bankruptcy filing impeded discovery and threatened further case progress (dispositive motions, trial).
The district court sua sponte considered withdrawal of the bankruptcy reference and lifting the stay as to this litigation to permit the case to proceed.
The court withdrew the reference as to Jonathan David Christenbury, lifted the bankruptcy stay for this litigation only, returned other aspects to the Bankruptcy Court, and denied Plaintiff’s motion to stay discovery as moot.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the district court should withdraw the reference from the Bankruptcy Court	Saniri implicitly opposed interruption of case progress; sought stay pending bankruptcy	Christenbury’s bankruptcy invoked the automatic stay and affected proceedings	Court exercised permissive withdrawal under 28 U.S.C. § 157(d) and withdrew reference as to Christenbury
Whether the automatic stay should be lifted for this civil litigation	Saniri sought continuation of litigation (moved to stay discovery earlier but court treated as moot)	Bankruptcy filing created stay that impeded discovery and trial; court may lift stay under equitable considerations	Court sua sponte lifted the stay as to this litigation while leaving the § 362 stay in effect for other purposes
Effect on discovery and case schedule	Saniri moved to stay discovery and proceedings	Defendant’s bankruptcy had already hampered discovery; continued stay would further delay case	Plaintiff’s motion to stay discovery denied as moot; parties proceed under existing Case Management Order deadlines
Allocation of remaining matters between district and bankruptcy courts	Saniri wanted resolution of litigation; bankruptcy court retains core bankruptcy matters	Christenbury’s bankruptcy requires some matters remain in Bankruptcy Court	Court referred all other aspects of the bankruptcy case back to Bankruptcy Court while retaining this litigation against Christenbury in district court

In re U.S. Airways Group, Inc., 296 B.R. 673 (E.D. Va. 2003) (discussing factors for withdrawing the bankruptcy reference)
Vieira v. AGM, II, LLC, 366 B.R. 532 (D.S.C. 2007) (identifying multi-factor test for permissive withdrawal and considerations like jury trial preservation and judicial economy)