Opinion
03 Civ. 7248 (JGK)
May 4, 2004
OPINION and ORDER
Pursuant to Local Civil Rule 6.3, the plaintiffs have filed a motion for reconsideration of this Court's Opinion and Order dated February 5, 2004. See Certain Underwriters at Lloyd's, London v. ABB Lummus Global, Inc., No. 03 Civ. 7248, 2004 WL 224505 (S.D.N.Y. Feb. 5, 2004). In that Opinion, familiarity with which is assumed, the Court found, among other things, that there is federal bankruptcy jurisdiction pursuant to 28 U.S.C. § 1334(b) over claims against ABB Lummus Global, Inc. ("Lummus") and Basic, Inc. ("Basic") (collectively, "the defendants"). The Court denied the plaintiffs' motion to remand the claims to the New York State Supreme Court, New York County, and granted the defendants' motion to transfer the claims to the United States District Court for the District of Delaware so that the action could be referred to the Delaware Bankruptcy Court. The plaintiffs move for reconsideration on the issue of jurisdiction, and they alternatively move for the Court to certify an interlocutory appeal pursuant to 28 U.S.C. § 1292(b) and to stay the transfer of the case pending appeal.
The Opinion and Order also transferred the claims against Liberty Mutual Insurance Co. ("Liberty Mutual"). Liberty Mutual supported the transfer of the case to the District of Delaware and now opposes the motion for reconsideration. All rulings with respect to Basic and Lummus apply to Liberty Mutual.
I.
While the background to the case is described in more detail in the Court's prior Opinion, the facts are repeated herein to the extent necessary for the present motions. This case arises out of the defendants' participation in a reorganization plan created in the chapter 11 bankruptcy of Combustion Engineering, Inc. ("CE"). CE is the former parent of Lummus and Basic, and CE, Lummus, and Basic are all currently owned by the parent corporation ABB Limited ("ABB"). CE filed for chapter 11 bankruptcy in the District of Delaware in the face of substantial liability for asbestos-related personal injury claims. CE presented to the Bankruptcy Court a prepackaged reorganization plan (the "Plan") to handle CE's asbestos liability while enabling ABB to restructure its finances and fund the Plan.
For the prior motions, both parties submitted records from the CE bankruptcy, In re Combustion Eng'g, Inc., Ch. 11 Case No. 03-10495. The facts presented in the prior Opinion and in this one are based largely on those records, which, as labeled in connection with the defendants' motion to transfer, include:
• The Findings of Fact and Conclusions of Law by the Bankruptcy Court ("Findings") (Ex. A);
• The transcript of the District Court's Bench Opinion confirming the Plan ("Bench Op.") (Ex. B);
• The Bankruptcy Court's Supplemental and Amendatory Order Making Additional Findings (Ex. C); and
• The District Court's Revised Proposed Confirmation Order ("Confirmation Order") (Ex. D).
A primary feature of the Plan is an injunction channeling all of CE's asbestos-related liability into the "Asbestos PI Trust" (the "Trust") established by the Plan. To help ABB refinance, the Plan also sought to rid all ABB subsidiaries of asbestos liability. The Bankruptcy Court thus included in the channeling injunction all asbestos-related claims against non-debtors Lummus and Basic, both of which have some insurance shared with CE and some individual insurance. The Plan calls on Lummus and Basic to contribute "the release and assignment to the Asbestos PI Trust of all of their rights to proceeds under insurance covering asbestos personal injury claims, including certain policies shared with CE." (Findings at 29-30.) Under the Plan, while policies shared by CE and Lummus, and by CE and Basic, can be used to pay off CE's liability, policies held by the defendants individually can only pay for claims against Lummus and Basic, respectively. (See, e.g., Findings at 3, 45.)
Over the objections of various insurance providers, including the plaintiffs, who have particularly objected to the inclusion of Lummus and Basic in the channeling injunction, Judge Fitzgerald of the Bankruptcy Court approved the Plan. Judge Wolin of the District Court confirmed the Plan, rejecting the insurers' objections and making it clear that without including Basic and Lummus in the channeling injunction, the plan would fail. (Bench Op. at 161-62.),
Following the confirmation of the Plan, the plaintiffs brought a civil action against the defendants in the New York State Supreme Court, New York County. See Certain Underwriters at Lloyd's, London v. ABB Lummus Global, Inc., No. 115322/03 (N.Y.Sup.Ct. filed Aug. 29, 2003) (Complaint). The plaintiffs are insurers of Lummus and Basic who claim that the defendants' breached their individually held insurance agreements by assigning their rights to proceeds to the Trust. The Complaint seeks declaratory relief abrogating the plaintiffs' obligations under those insurance policies.
On September 16, 2003, the defendants removed the claims against them to this Court pursuant to 28 U.S.C. § 1452(a) and Federal Rule of Bankruptcy Procedure 9027, with jurisdiction being asserted under 28 U.S.C. § 1334 (b). The defendants then moved to transfer the claims to the United States District Court for the District of Delaware for referral to the Bankruptcy Court presiding over all issues related to CE's reorganization. The plaintiffs opposed the motion to transfer and cross-moved for remand of the claims to state court on the grounds that: (1) there is no "related to" jurisdiction under 28 U.S.C. § 1334(b), (2) the Court must abstain from accepting jurisdiction pursuant to 28 U.S.C. § 1334(c)(2); and (3) the Court should exercise its discretion to abstain from hearing the case pursuant to 28 U.S.C. § 1334(c)(1) or to order equitable remand pursuant to 28 U.S.C. § 1452(b).
After hearing oral argument and after careful consideration of all the papers submitted in connection with the motions, including the bankruptcy case records attached as exhibits, the Court denied the plaintiffs' motion for remand and granted the defendants' motion to transfer the claims against them to the United States District Court for the District of Delaware. The Court found that "related to" bankruptcy jurisdiction exists over these claims, both because, on their face, the claims arise directly out of the Bankruptcy Court's order, and because the outcome of the action could have a conceivable effect on the estate of the debtor. The Court then determined that, under the construction of § 1334(c)(2) adopted by a majority of judges in the Southern District of New York, mandatory abstention was not applicable in a removed case such as this one. The Court concluded that these claims would be best presented in the first instance to the Bankruptcy Court in Delaware and that the interests of comity and efficiency weighed against an equitable remand to state court and in favor of transferring the claims to the District of Delaware.
See supra note 2.
Meanwhile, the plaintiffs in this case have been appealing the confirmation of the Plan to the Court of Appeals for the Third Circuit. The plaintiffs, as appellants in the case Certain Underwriters at Lloyd's London v. Combustion Engineering, Inc., No. 03-3392, are primarily arguing (1) that "the District Court erred in holding that it had subject matter jurisdiction over pending and future actions asserting asbestos-related personal injury claims against non-debtors [Basic and Lummus]" and (2) that the District Court lacked the authority to enforce the channeling injunction under section 105(a) of the Bankruptcy Code. (See Appellant Brief at 2.) Oral argument on that appeal is scheduled for June 3, 2004.
There is also a closely related adversarial proceeding that is before the Delaware Bankruptcy Court but is temporarily stayed. See Combustion Eng'g, Inc. v. Allianz Ins. Co. (In re Combustion Eng'g, Inc.), Ch. 11 Case No. 03-10495, Adv. Proc. No. 03-57275 (Bankr. D. Del. filed Oct. 24, 2003). In that action, CE, Basic, and Lummus have sued over two dozen insurers, including the plaintiffs in this case. The substantive issue is essentially the same as in this case: whether the Plan abrogated rights under the insurance policies by having them assigned to the Trust.
II.
The plaintiffs move for reconsideration of the Court's decision that there is "related to" jurisdiction pursuant to 28 U.S.C. § 1334 (b) over the claims against the defendants. The standards for granting a motion for reconsideration or reargument are well established and are the same as those governing former Local Civil Rule 3(j). See United States v. Letscher, 83 F. Supp.2d 367, 382 (S.D.N.Y. 1999) (collecting cases). The moving party is required to demonstrate that the Court overlooked the controlling decisions or factual matters that were put before the Court in the underlying motions. Nakano v. Jamie Sadock, Inc., 98 Civ. 0515, 2000 WL 1010825, at *1 (S.D.N.Y. July 20, 2000); Walsh v. McGee, 918 F. Supp. 107, 110 (S.D.N.Y. 1996); In re Houbigant, 914 F. Supp. 997, 1001 (S.D.N.Y. 1996). The rule is "narrowly construed and strictly applied so as to avoid repetitive arguments on issues that have been considered fully by the Court." Walsh, 918 F. Supp. at 110; see also Nakano, 2000 WL 1010825, at *1; United States v. Mason Tenders Dist. Council of Greater N.Y., 909 F. Supp. 882, 889 (S.D.N.Y. 1995).
The Court's 1334(b) analysis had two aspects, and the plaintiffs maintain that the Court erred in each. First, the plaintiffs contend that the Court overlooked controlling precedent in purportedly applying a so-called "plain language test" instead of the traditional "any conceivable effect" test. Second, the plaintiffs contend that the Court made manifest errors of fact in finding, as an alternative basis for jurisdiction, that extinguishing the defendants' insurance rights could have a "conceivable effect" on the debtor's estate. The motion for reconsideration is denied because the plaintiffs have failed to show that the Court overlooked controlling decisions or factual matters.
A.
The first part of the Opinion's § 1334(b) analysis observed that this case is unusual in that it arises directly out of an order of the bankruptcy court. The Court noted that in most situations, the origin of the case is independent from the bankruptcy proceeding, and the relation to the bankruptcy proceeding must thus be based on the outcome of the case affecting the debtor's estate. See Celotex Corp. v. Edwards, 514 U.S. 300, 308 (1995) (discussing "any conceivable effect" test created in Pacor, Inc. v. Higgins, 743 F.2d 984, 994 (3d Cir. 1984));Publicker Indus. Inc. v. United States (In re Cuyahoga Equip. Corp.), 980 F.2d 110, 114 (2d Cir. 1992). In this case, however, the alleged breach arises directly and solely out the Bankruptcy Court's approval of the Plan and the defendants' participation in it. The Court thus noted that the case "fits within the plain language of § 1334(b), in that it is clearly `related to' the Delaware bankruptcy proceeding under a common sense understanding of the terms." ABB Lummus, 2004 WL 224505, at *5; see 28 U.S.C. § 1334 (b) (providing jurisdiction over all civil proceedings "related to cases under title 11").
The Court thus was not employing a new "plain language" test. Instead, the Court, after recognizing controlling precedent, emphasized the peculiar facts of this case and found that these claims, on their face, are plainly "related to" the CE bankruptcy. This case does not loosely arise out of the CE bankruptcy; it is inextricably intertwined with the bankruptcy case and directly impacts the Plan. Compare In re WorldCom, Inc. Sec. Litig., 293 B.R. 308, 322 (S.D.N.Y. 2003) (finding "related to" jurisdiction in part based on "the existence of strong interconnections between the third party action and the bankruptcy"), with Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 162 (7th Cir. 1994) (finding no jurisdiction where dispute between purchaser at bankruptcy sale and third party arose years after debtor was fully liquidated and bankruptcy was "over and done with"). Put simply, this action is a collateral attack on the Plan over which the interested Bankruptcy Court should have jurisdiction. The alleged breach involves the defendants assigning their rights to insurance proceeds to the Trust, as the Bankruptcy Court required. The plaintiffs seek to have a state court effectively vacate the Bankruptcy Court's order by declaring that the defendants' assignment of their rights abrogated those rights.
The prior Opinion did not overlook any controlling precedent and expressly referred to the standards emerging out of Turner v. Ermiger (In re Turner), 724 F.2d 338, 341 (2d Cir. 1983), which employed a "significant connection" test, and In re Cuyahoga, 980 F.2d at 114, which synthesized the Turner and Pacor tests by defining a "significant connection" as where the civil proceeding "might have any `conceivable effect' on the bankrupt estate." Cuyahoga, 980 F.2d at 114; see ABB Lummus, 2004 WL 224505, at *4-*5; see also Hunnicutt Co. v. TJX Cos. (In re Ames Dep't Stores, Inc.), 190 B.R. 157, 160 (S.D.N.Y. 1995).
Moreover, as the prior Opinion noted, this case falls squarely within the principles in Turner, which stated that "related to" jurisdiction was intended to be a "comprehensive grant of jurisdiction . . . over all controversies arising out of any bankruptcy or rehabilitation case" but not extending to cases where the "exiguous nature of the relationship between the proceeding and the bankruptcy case is such as to fall without the court's jurisdiction." Turner, 724 F.2d at 341 (internal quotations omitted).
In the appellate case, the plaintiffs are directly attacking the Bankruptcy Court's jurisdiction and authority to impose a channeling injunction with respect to the asbestos claims against the non-debtors Basic and Lummus. As part of that attack, the plaintiffs specifically argue that the Bankruptcy Court cannot approve the assignment of the defendants' insurance because the outcome of any proceeding concerning that insurance would not affect the estate of the debtor. (See Appellant Brief at 29 n. 9; Reply Brief at 15-17.)
The plaintiffs maintain, however, that they were not afforded an opportunity to brief the so-called "plain language" argument and that the defendants never argued for jurisdiction on such a basis, although the Court did raise such questions at the argument of the motions. However, even after considering all of the plaintiffs' arguments, the Court concludes that it did not overlook or misinterpret any of the cases proffered by the plaintiffs. In any event, it is also clear that the plaintiffs' claims would satisfy the "any conceivable effect" test, which the Court also applied in the initial decision and which the plaintiffs contend is the only possible test for "related to" jurisdiction.
At argument of the initial motions, the plaintiffs were asked for any cases' bearing a resemblance to a case such as this, where the whole issue is a challenge to what the bankruptcy court did. (Dec. 8, 2003 Tr. at 37.) The plaintiffs cited Wall v. Merrill Lynch Pierce Fenner Smith, Inc., 92 Civ. 0387, 1992 WL 77625 (S.D.N.Y. Mar. 26, 1992), which they also cited in their original reply brief, as a case rejecting an "arising out of" basis for jurisdiction. (See Dec. 8, 2003 Tr. at 38-39.) The plaintiffs continue to rely on Wall in the current motions.
Wall involved claims of fraud and breach of fiduciary duty against defendants who allegedly made false projections in selling bankrupt partnerships and who allegedly used those projections to gain approval of the reorganization plans. See Wall 1992 WL 77625 at *1. Unlike this case, that dispute did not directly arise out of a bankruptcy court's order, and the court in Wall specifically held that the claims could be adjudicated without rendering the bankruptcy plan unenforceable. See id. at *2.
B.
Moreover, the Court's original Opinion also expressly applied the "any conceivable effect" rule created by Pacor, 743 F.2d 984, recognized by the Supreme Court in Celotex, 514 U.S. at 308 n. 6, and adopted in this Circuit by Cuyahoga, 980 F.2d at 114. "Related to" jurisdiction over a proceeding exists where
the outcome of that proceeding could conceivably have any effect on the estate being administered in bankruptcy. . . . An action is related to bankruptcy if the outcome could alter the debtor's rights, liabilities, options, or freedom of action (either positively or negatively) and which in any way impacts upon the handling and administration of the bankrupt estate.Pacor, 743 F.2d at 994. The test is designed to recognize that, while "related to" jurisdiction is not "limitless," "Congress intended to grant comprehensive jurisdiction to the bankruptcy courts so that they might deal efficiently and expeditiously with all matters connected with the bankruptcy estate." Celotex, 514 U.S. at 308 (quoting Pacor, 743 F.2d at 994).
In determining that this case could have a conceivable effect on the debtor estate, this Court relied on statements by the Bankruptcy Court and District Court explaining how including Lummus and Basic in the channeling injunction is essential for the Plan. This Court concluded, based on the overall context of the CE bankruptcy, that extinguishing the defendants' ability to assign their insurance proceeds to the Trust could have a conceivable effect on the Plan and the administration of the debtor's estate. In particular, the Opinion noted that undermining the defendants' insurance rights could inhibit ABB's ability to sell those entities and restructure its finances-goals that, were essential to the purpose and operation of the Plan. The Court has now been corrected insofar as a purpose of the Plan was to enable ABB to sell Lummus but not Basic. The plaintiffs on this motion have also argued that the ability to sell Lummus could not be affected by a decision in this action.
However, the Court's analysis remains undisturbed. Including the defendants in the channeling injunction is an essential aspect of the Plan, and their contribution to the Plan is the release and assignment to the Trust of their rights to asbestos-related insurance proceeds. Impairing the defendants' ability to participate in the Plan as ordered could conceivably have a "string of unfortunate, consequences" including inhibiting ABB's ability to refinance and fund the Plan and limiting the amount of funds available in the Trust to pay for CE's liability. (Bench Op. at 161.) This Court previously held and continues to hold that without the defendants' ability to contribute their insurance, the prepackaged Plan could conceivably unravel, or at least be altered in ways that affect the debtor's rights and options.
As the defendants have pointed out in the original motion and on this motion, if Basic and Lummus lose their individual insurance coverage, claimants may attempt to draw from the coverage shared with CE, which would thus reduce the proceeds available to cover CE's liability.
The plaintiffs contend that while channeling the defendants' liability to the Trust may be necessary, assigning the insurance proceeds is not. The Court, however, did not "overlook" any factual matters put before it with respect to this point. The Court thoroughly reviewed and considered the orders and opinions from the bankruptcy case that were submitted on the previous motions. The Court simply was not and is not persuaded that the channeling of liability and the channeling of insurance rights are so easily disentangled.
On the motion for reconsideration, the plaintiffs have failed to provide convincing evidence from the bankruptcy case that removing the insurance would not affect the administration of the Trust or the operation of the Plan. For example, the plaintiffs have claimed that the Bankruptcy Court found that the Trust was fully funded and that the asbestos claimants would be fully paid even without the insurance proceeds. (See Apr. 15, 2004 Tr. at 48-50.) That representation, however, has proven to be inaccurate. (See Findings at 27, 42-45.) The plaintiffs point to the Insurance Assignment Agreement, which prepared for the contingency that the assignments might be declared invalid. However, such preparation does not mean that the assigned rights can be abrogated without impacting the administration of the debtor's estate. Similarly, other citations to the bankruptcy case reflect, at most, disputed interpretations of what the courts intended when they addressed or declined to address certain outstanding issues.
For example, the plaintiffs cite to statements by the Bankruptcy and District Courts leaving open the ability of insurers to challenge the administration of the Trust in appropriate jurisdictions. (See Findings at 27; Confirmation Order ¶ 17; Apr. 15, 2004 Tr. at 11-15.) But the Courts were likely referring to challenges to the handling of individual claims, rather than a challenge to the assignment of the rights to proceeds itself.
can refuse to certify an interlocutory appeal even if the three standards are met. See Nat'l Asbestos Workers Med. Fund v. Philip Morris, Inc., 71 F. Supp.2d 139, 145-46, 162-66 (E.D.N.Y. 1999) (conducting in-depth analysis of statutory text, history, and purpose);see also In re Methyl Tertiary Butyl Ether Prods. Liab. Litig., 174 F. Supp.2d 4, 7 (S.D.N.Y. 2001). At any rate, this Court is "of the opinion" that the third statutory factor is not met. See 28 U.S.C. § 1292(b).
The Bankruptcy and District Courts took great care to assure, over strenuous objections, that the Plan would include contributions from Lummus and Basic in the form of the. assignment of their rights to insurance proceeds. This case involves a complex reorganization plan that is still being litigated and could be directly altered by a decision in this case. This action could plainly affect the administration of the bankrupt estate in the broader sense, and removing a piece of this Plan could conceivably affect the "debtor's rights, liabilities, options, or freedom of action." Pacor, 743 F.2d at 994.
The outcome of this action sought by the plaintiffs would be to invalidate a provision of the Plan. Thus, for the Court to find no conceivable effect on the debtor, it would have to rule that the Bankruptcy Court's order that the defendants assign their insurance was superfluous to the debtor's reorganization. The motion for reconsideration provides no basis for that conclusion.
As expressed in the prior Opinion, the courts of the Third Circuit are clearly in the best position to determine whether and to what extent these claims could conceivably affect the debtor's estate. The interest and expertise of the Third Circuit courts in this matter cannot create a basis for jurisdiction. But there is more than a sufficient basis to conclude that removing this piece of the Plan could conceivably affect the estate being administered in bankruptcy and that the claims are therefore "related to" the bankruptcy.
III.
In the alternative, the plaintiffs move for the Court to certify an order for interlocutory appeal pursuant to 28 U.S.C. § 1292(b) and to stay the transfer of this action pending the appeal. The plaintiffs present two issues for interlocutory appeal: whether there is "related to" jurisdiction pursuant to § 1334(b) and whether the mandatory abstention provision of § 1334(c)(2) applies to removed claims such as these. Pursuant to § 1292(b), the Court may certify these issues for interlocutory appeal if it is "of the opinion" that (1) the order "involves a controlling question of law" (2) "as to which there is substantial ground for difference of opinion" and (3) "that an immediate appeal of the order may materially advance the ultimate termination of the litigation." 28 U.S.C. § 1292 (b).
The determination of whether § 1292(b) certification is appropriate under these standards initially lies within the discretion of the district court. See, e.g., Ferraro v. Sec'y of U.S. Dep't of Health Human Servs., 780 F. Supp. 978, 979 (E.D.N.Y. 1992) (collecting cases);see also Koehler v. Bank of Bermuda Ltd., 101 F.3d 863, 866 (2d Cir. 1996) (recognizing "the special ability a trial court possesses to assess the efficiency of an immediate appeal"). Interlocutory appeals are an exception to the general policy against piecemeal appellate review embodied in the final judgment rule, and only "exceptional circumstances [will] justify a departure from the basic policy of postponing appellate review until after the entry of a final judgment." Coopers Lybrand v. Livesay, 437 U.S. 463, 475 (1978); see also Flor v. Bot Fin. Corp., 79 F.3d 281, 284 (2d Cir. 1996) (per curiam) (collecting cases). The institutional efficiency of the federal court system is a chief concern underlying § 1292(b), see Suozzo v. Bergreen, No. 00 Civ. 9649, 2003 WL 256784, at *3 (S.D.N.Y. Feb. 5, 2003), and the Court of Appeals has repeatedly emphasized that a district court is to "exercise great care in making a § 1292(b) certification." Westwood Pharm., Inc. v. Nat'l Fuel Gas Distrib. Corp., 964 F.2d 85, 89 (2d Cir. 1992). Section 1292(b) was not intended "to open the floodgates to a vast number of appeals from interlocutory orders in ordinary litigation," and certification is warranted only in "exceptional cases" where early appellate review "might avoid protracted and expensive litigation." Telectronics Proprietary, Ltd, v. Medtronic, Inc., 690 F. Supp. 170, 172 (S.D.N.Y. 1987) (internal quotation marks omitted); see also German v. Fed. Home Loan Mortgage Corp., 896 F. Supp. 1385, 1398 (S.D.N.Y. 1995).
First, while the mandatory abstention issue involves a controlling issue of law, it is unclear that the § 1334(b) issue does. Jurisdiction is generally a "controlling" issue, but one alternative basis for jurisdiction is this Court's finding of fact that the action could have a "conceivable effect" on the debtor's estate. Section 1292(b) certification is limited to controlling questions of law and is thus not available on the § 1334(b) issue in this case. See In re WorldCom Sec. Litig., No. 02 Civ. 3288, 2003 WL 22953644, at *5 (S.D.N.Y. Dec. 16, 2003) (finding that issue of "related to" jurisdiction could not be certified because it involved findings of fact). Of course, subject matter jurisdiction can always be raised sua sponte and could be argued if an appeal were certified on the issue of mandatory abstention.
With respect to the mandatory abstention issue, the issue is a question of law, and there is arguably a substantial ground for difference of opinion. In finding that § 1334(c)(2) does not apply to removed claims, this Court followed the rule "almost uniformly" held in this Circuit. See Renaissance Cosmetics, Inc. v. Dev. Specialists, Inc., 277 B.R. 5, 13 (S.D.N.Y. 2002) (internal quotations omitted). However, some judges in this Circuit and even in this district, along with courts of appeals from other circuits, have reached the opposite conclusion.See id. at 12.
In any event, the decisive point for both issues is that an interlocutory appeal will not "materially advance the ultimate termination of the litigation." This case is effectively a collateral attack on the ability of Basic and Lummus to contribute to the Plan. The case raises issues that are closely related to those being litigated on appeal before the Court of Appeals for the Third Circuit and in an adversarial proceeding before the Delaware Bankruptcy Court. Moreover, a favorable result for the plaintiffs on interlocutory appeal will not terminate this litigation but only result in it being remanded to state court. See In re WorldCom, 2003 WL 22953644, at *7 (declining to certify appeal where decisions on issues of § 1452 removal and "related to" jurisdiction would "not advance the ultimate termination of this litigation, if that issue should be understood as terminating the active litigation of a case, as this case would merely allow the plaintiffs to raise before the Court of Appeals for the Second Circuit substantially the same arguments being raised in the CE bankruptcy appeal. Duplicative litigation should not be encouraged. While the mandatory abstention issue may be unsettled, this is not a compelling case for resolving that issue in view of the reasonably settled view of that issue in this District and the inefficiency that would be produced by an appeal of that issue in this case.
The ultimate termination of this litigation, viewed in its proper perspective, is best advanced by transferring this case to the District of Delaware to be referred to the Bankruptcy Court. Once that occurs, the plaintiffs will still have the ability to argue that remand to the state court is necessary or appropriate. The Bankruptcy Court will also be able to hear argument on whether it is most efficient to consolidate this case with a very similar case currently pending before it. As this Court emphasized in its prior opinion, the claims in this case involve issues best presented, at least in the first instance, to the District and Bankruptcy Courts for the District of Delaware. Transferring this case to the District of Delaware will advance the litigation and will enable the courts with the most expertise in the case to determine how best to proceed.
Because the Court declines to certify an interlocutory appeal, there is no basis for staying the transfer order. The plaintiffs, however, may oppose the transfer by seeking a writ of mandamus and an appropriate stay from the Court of Appeals. See In re Warrick, 70 F.3d 736, 739-40 (2d Cir. 1995). Pursuant to Local Civil Rule 83.1, the Court will direct that the case file not be transferred for at least five days from the date of this Opinion and Order.
Conclusion
For the foregoing reasons, the motion for reconsideration is denied. The motion to certify an interlocutory appeal pursuant to 28 U.S.C. § 1292(b) and to stay the transfer of the case pending any appeal is denied. Pursuant to Local Civil Rule 83.1, the Clerk is directed to wait at least five days from the date of this Opinion and Order before transferring the case file to the United States District Court for the District of Delaware.
SO ORDERED.