Stehrenberger v. Stehrenberger, 651 B.R. 454

This is a Chapter 7 adversary proceeding where Plaintiff Michiko Stehrenberger moved to stay the district-court proceedings pending appeal after the bankruptcy court denied her request to abstain from hearing a nondischargeability claim under 11 U.S.C. § 523(a)(19).
Trial on the merits was set for May 9, 2023; Plaintiff filed a stay motion and an amended stay motion focused on the court’s denial of abstention and its § 523(a)(19) analysis.
Plaintiff initially sought permissive abstention under 28 U.S.C. § 1334(c)(1), then (after denial) raised mandatory abstention under § 1334(c)(2) in a reconsideration motion filed late in the case.
The court applied the four-factor stay standard (likelihood of success, irreparable harm, harm to others, public interest) and found Plaintiff failed to show a likelihood of success on appeal.
The court concluded several procedural defects: permissive-abstention rulings under § 1334(c) are generally not appealable; the mandatory-abstention argument was untimely and improperly raised on reconsideration; Plaintiff did not seek leave to appeal interlocutory orders as required.
On the merits, the court explained § 523(a)(19) nondischargeability claims are not necessarily "related to" proceedings for purposes of mandatory abstention, and the court had not yet ruled finally on the § 523(a)(19) claim (making an appeal premature). The stay was denied to avoid further delay.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether to grant a stay pending appeal	Stehrenberger: appeal of abstention denial merits stay to allow state-court securities judgment and Ninth Circuit/BAP guidance on § 523(a)(19)	Defendants: stay would unduly delay trial; plaintiff's appeal is procedurally and substantively weak	Denied — plaintiff failed to show likelihood of success and other stay factors did not favor relief
Appealability of permissive abstention denial	Stehrenberger: seeks review of abstention denial	Defendants: permissive-abstention decisions under § 1334(c) are non-reviewable	Held not appealable under 28 U.S.C. § 1334(d)
Timeliness and propriety of mandatory-abstention argument	Stehrenberger: mandatory abstention applies; raised on reconsideration	Defendants: argument was raised too late and cannot be introduced first in reconsideration; pretrial deadlines passed	Held untimely and improperly raised on reconsideration; waiver and pretrial-order rules bar it
Merits/prematurity of appealing court’s § 523(a)(19) analysis	Stehrenberger: Court’s dicta on following In re Anderson requires review now	Defendants: court has not entered a final ruling on § 523(a)(19); appeal is premature	Held premature — court has not finally decided § 523(a)(19); abstention denial was based on timeliness and potential delay, not a final merits ruling

Nken v. Holder, 556 U.S. 418 (2009) (stay-pending-appeal standard is discretionary and requires a four-factor inquiry)
Kona Enterprises, Inc. v. Bishop, 229 F.3d 877 (9th Cir. 2000) (new legal theories generally cannot be raised for the first time on reconsideration)
Ritzen Group, Inc. v. Jackson Masonry, LLC, 140 S. Ct. 582 (2020) (finality standard for appeals—avoid piecemeal interlocutory appeals)
In re GACN, Inc., 555 B.R. 684 (9th Cir. BAP 2016) (bankruptcy adversary finality follows the same civil-case standard for appealability)