Chapter 4, G. Abstention

• Jurisdiction: United States

G. Abstention

A claimant may file a motion to abstain if certain criteria are met. This motion is filed with the district court and requests that the district court abstain from hearing a matter more appropriately heard by the state courts. Mandatory abstention requires the district court to abstain, while discretionary abstention allows the district court the discretion to determine whether it is more appropriate for the case to be heard in the state courts.

I. Mandatory Abstention

The basis for mandatory abstention is found in 28 U.S.C. § 1334(c)(2):

Upon timely motion of a party in a proceeding based upon a state law claim or state law cause of action, related to a case under title 11 but not arising under title 11 or arising in a case under title 11, with respect to which an action could not have been commenced in a court of the United States absent jurisdiction under this section, the district shall abstain from hearing such proceeding if an action is commenced, and can be timely adjudicated, in a state forum of appropriate jurisdiction.

Six elements must be met in order for the mandatory provision of § 1334(c)(2) to apply:

1. A party in a proceeding must make a timely motion for abstention by the court;
2. The adversary proceeding must be based on a state law claim or state law cause of action;
3. The adversary proceeding must be related to the title 11 case, but it must not arise under or in the title 11 case;
4. The adversary proceeding must be one that could not have been commenced in a court of the U.S. absent § 1334 jurisdiction;
5. An action must have been commenced and is pending in a state forum of appropriate jurisdiction; and
6. The pending state court action must be one that can timely be adjudicated in that forum.⁷⁶

In order for the timeliness requirement of mandatory abstention to be met, the state court action must have been commenced prior to the filing of the bankruptcy petition.⁷⁷ Also, the case must be one that could not have been commenced in federal court absent bankruptcy jurisdiction, and no other basis for federal jurisdiction exists.⁷⁸ Lastly, as noted in the statute, the proceeding must be "related to" and not "arising in" or "arising under," meaning that mandatory abstention only applies to "noncore" matters.

II. Discretionary Abstention

Discretionary abstention is also provided for by statute. Specifically, 28 U.S.C. § 1334(c)(1) provides:

Nothing in this section prevents a district court in the interest of justice, or

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