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Environmental Wood Products, Inc v. Hall & Navarro, LLC

United States District Court, S.D. Georgia, Statesboro Division

January 15, 2020

ENVIRONMENTAL WOOD PRODUCTS, INC., Plaintiff,
v.
HALL & NAVARRO, LLC and RENASANT BANK, Defendants.

          ORDER

          J. RANDAL HALL, CHIEF JUDGE

         Before the Court are two cases removed from one state court case filed in Tattnall County, Georgia. The Defendants Hall & Navarro, LLC ("H&N") and Renasant Bank removed separately to this Court under 28 U.S.C. § 1452, which allows for piecemeal removal of individual claims. As explained below, the interests of comity with state courts and respect for state law are best served by abstaining from hearing the cases under 28 U.S.C. § 1334(c)(1).

         I. Background

         These cases stem from Plaintiff's bankruptcy, an Order issued by the Bankruptcy Court, and the implementation of Plaintiff's plan of reorganization. Plaintiff alleges that Renasant Bank's allocation of some of Plaintiff s payments under the plan were in contravention of the plan. Plaintiff asserts state law conversion and attorneys' fee claims against Renasant Bank. Plaintiff also alleges that H&N, Plaintiff's bankruptcy counsel, permitted Renasant Bank to make the payment allocation. Plaintiff asserts a state law professional malpractice claim against H&N.

         Defendants each removed to this Court pursuant to the bankruptcy removal procedure in 28 U.S.C. § 1452, which permits a party to remove "any claim ... to the district court for the district where such civil action is pending, if such district court has jurisdiction of such claim . . . under section 1334 of this title." This procedure resulted in two dockets being created in this Court: case number 6:19-cv-56 for H&N's removal and case number 6:19-cv-57 for Renasant Bank's removal.

         Following removal, Defendants also moved to reopen Plaintiff's underlying bankruptcy case, which has been closed since September of 2011. The Bankruptcy Court denied that request, citing jurisdictional and justiciability concerns.[1] This leaves the two cases before this Court.

         II. Legal Standards and Discussion

         Defendants remove under 28 U.S.C. § 14 52(a), which requires removing defendants to establish jurisdiction under 28 U.S.C. § 1334. Section 1334(b) provides multiple avenues for establishing jurisdiction: proceedings arising under, arising in, or related to cases under Title 11 all satisfy the statute. However, a district court's jurisdiction under Section 1334(b) is non-exclusive, and district courts need not exercise that jurisdiction in certain circumstances. 28 U.S.C. § 1334(c)(1) states:

Except with respect to a case under chapter 15 of title 11, nothing in this section prevents a district court in the interest of justice, or in the interest of comity with State courts or respect for State law, from abstaining from hearing a particular proceeding arising under title 11 or arising in or related to a case under title 11.

         A district court has broad discretion to abstain under this section. See In re Gober, 100 F.3d 1195, 1206 (5th Cir. 1996); see also In re Wood, 825 F.2d 90, 93 (5th Cir. 1987) ("The abstention provisions . . . demonstrate the intent of Congress that concerns of comity and judicial convenience should be met, not by rigid limitations on the jurisdiction of federal courts, but by the discretionary exercise of abstention when appropriate in a particular case.")). A district court's decision to abstain under subsection (c) (1) is generally not reviewable by the court of appeals.[2] See 28 U.S.C. § 1334(d).

         Courts in the Southern District of Georgia consider fourteen factors in determining whether discretionary abstention is appropriate:

(1) the effect of abstention on the efficient administration of the bankruptcy estate;
(2) the extent to which state law issues predominate over ...

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