Class Plaintiff's Response to Automatic Stay - equitatus

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Case 11-03620-bjh Doc 40 Filed 02/21/12 Entered 02/21/12 23:34:41 Desc Main Document Page 30 of 34 III. NEITHER SECTIONS 362 NOR 105 AUTHORIZE THIS BANKRUPTCY COURT TO HEAR THE CALIFORNIA CLASS LITIGATION 75. Citing to irrelevant “related to” jurisdiction case law, Greenberg asserts the Court should actually take over and hear the California Class Litigation. Greenberg argues that it would be more efficient if the direct claims involved in the California Litigation and the estate claims be heard together in the Bankruptcy Court. GT Memo. at 18. As discussed above, third-party litigation should be enjoined only when unusual circumstances exist and traditional factors support an injunction, none of which is the case here. 76. Greenberg fails to identify any legal authority that would allow this Court to take jurisdiction of the California Class Litigation and thereby take control of the claims of non-debtors (California Class Plaintiffs) against other non-debtors (Wells Fargo and Greenberg). Such a request is completely inconsistent with bankruptcy jurisdiction, the use of adversary proceedings and the purpose of §§ 362 and 105 of the Bankruptcy Code. Adversary proceedings cannot be used to move third-party litigation from a state court to bankruptcy court. 77. Moreover, Greenberg’s stay motion is not the proper procedure for requesting a transfer of litigation from state court to bankruptcy court. The correct procedure is through the removal process set forth in 28 USC §§ 1441 and 1452, and then, only if the district court otherwise has bankruptcy “related to” jurisdiction under 28 USC § 1334, which plaintiffs dispute. Merely filing a motion in an adversary proceeding in this Bankruptcy Court is not an appropriate substitute for that process, and must therefore be rejected regardless of its merits. 78. Even if the case were properly removed to the Northern District of California and not remanded, and then referred and transferred from California to this Bankruptcy Court, the Court could not render a final decision in the matter in any event, pursuant to 28 U.S.C. § 157(c)(1). See also Stern v. Marshall, 131 S. Ct. 2594, 2611 (2011) (finding bankruptcy court's adjudication of debtor's state law counterclaims against creditor unconstitutional as outside the authority given the bankruptcy court under Article III). As such, it would make no practical or economic sense at all for this Court to take over the state court case, even if formidable impediments to transfer in the removal 24
Case 11-03620-bjh Doc 40 Filed 02/21/12 Entered 02/21/12 23:34:41 Desc Main Document Page 31 of 34 and remand process did not already prevent transfer. 79. Lastly, it is ridiculous for Greenberg to claim that it would be most economical for the California Class Litigation to be heard in Texas. As described in the California Class Plaintiffs' motions to transfer venue, 24 in the California Class Litigation, all of the parties, all of the witnesses, all of the evidence and the substantive law hail from California. In addition, the bankruptcy proceedings of MF08 and all the Managers are pending in the Oakland Bankruptcy Court. CONCLUSION For these reasons, Greenberg’s Motion should be denied. Dated this 21st day of February 2012. BONNETT, FAIRBOURN, FRIEDMAN & BALINT, P.C. By s/Andrew S. Friedman William G. Fairbourn (Admitted Pro Hac Vice) Andrew S. Friedman (Admitted Pro Hac Vice) Robert J. Spurlock (Admitted Pro Hac Vice) Wendy J. Harrison Kathryn A. Honecker William F. King 2901 N. Central Avenue, Suite 1000 Phoenix, AZ 85012 Telephone: (602) 274-1100 Facsimile: (602) 274-1199 Email: afriedman@bffb.com MEYERS LAW GROUP, P.C. Merle C. Meyers, Esq. CA Bar # 66849 (Admitted pro hac vice) 44 Montgomery Street, Suite 1010 San Francisco, CA 94104 Telephone (415) 362-7500 Facsimile: (415) 362-7515 Email: mmeyers@mlg-pc.com 24 See California Class Plaintffs’ Motion to Transfer, filed on February 3, 2012 in Case No 11-35865-BJH and Defendants’ Motion To Transfer Venue of Adversary Proceeding filed on February, 2012 in Adversary Proceeding No. 11-03618-BJH. 25
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Class Plaintiff's Response to Automatic Stay - equitatus

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