Chapter 4, F. Removal and Remand

• Jurisdiction: United States

F. Removal and Remand

I. Removal Statute

The filing of bankruptcy by any party in a state court action will usually provide a basis for jurisdiction to support removal of the matter to federal court. The basis for removal is found in 28 U.S.C. § 1452(a), which provides:

A party may remove any claim or cause of action in a civil action ... to the district court for the district where such civil action is pending, if such district court has jurisdiction of such claim or cause of action under § 1334 of this title.

"While 28 U.S.C. § 1452(a) provides for removal of a state court proceeding to federal court if bankruptcy jurisdiction is present, 28 U.S.C. § 1452(b) provides the mechanism by which the court to which the action is removed may remand the matter back to the state court."⁶⁵

Further, § 1452(b) of title 28 provides: "The court to which such claim or cause of action is removed may remand such claim or cause of action on any equitable ground." "Equitable" has been defined as "appropriate."⁶⁶ When determining the appropriateness of remand, a district court will consider the following factors:

1. the effect or lack thereof on the efficient administration of the estate if the matter is remanded;
2. the extent to which state law issues predominate over bankruptcy issues;
3. the difficulty or unsettled nature of the applicable state law;
4. the presence of a related proceeding commenced in state court or other nonbankruptcy court;
5. the jurisdictional basis, if any, other than 28 U.S.C. § 1334;
6. the degree of relatedness or remoteness of the proceeding to the main bankruptcy case;
7. the substance rather than form ofan asserted "core" proceeding;
8. the feasibility of severing state law claims from core bankruptcy matters to allow judgments to be entered in state court with enforcement left to the bankruptcy court;
9. the burden upon the court's docket;
10. the likelihood that the commencement of the proceeding in bankruptcy court involves forum-shopping by one of the parties;
11. the existence of a right to a jury trial; and
12. the presence in the proceeding of nondebtor parties.⁶⁷

This list is not exhaustive, and the statute provides that a court may remand "on any equitable ground."⁶⁸ This clearly gives the district court broad discretion in determining whether it is appropriate to remand a matter to state court.

II. Notice of Removal

Rule 9027(a)(1) of the Federal Rules of Bankruptcy Procedure requires that all notices of removal "shall...