United States District Court, D. Hawaii
ORDER DENYING PLAINTIFF BARNES'S MOTION TO
WITHDRAW THE REFERENCES OF CASES TO THE UNITED STATES
BANKRUPTCY COURT FOR THE DISTRICT OF HAWAI`I
C. KAY, SR., UNITED STATES DISTRICT JUDGE.
reasons that follow, Plaintiff Barnes's motion requesting
the Court to withdraw the references of In re Sea
Hawai`i Rafting, LLC, No. 14-01520 (Bankr. D. Haw.
2014) and In re Kristin Kimo Henry, No. 14-01475
(Bankr. D. Haw. 2014) to the United States Bankruptcy Court
for the District of Hawai`i is DENIED.
purposes of this Order, the Court will not recount this
case's lengthy procedural history beginning in 2013. The
Court only discusses those facts and events of specific
relevance to the issues that this Order addresses.
November 3, 2014, Defendant Kris Henry (“Defendant
Henry”), the sole member of Defendant Sea Hawai`i
Rafting, LLC (“Defendant SHR”), filed a chapter
13 bankruptcy petition in the United States Bankruptcy Court for
the District of Hawai`i (the “bankruptcy court”).
See In re Kristin Kimo Henry, No. 14-01475 (Bankr.
D. Haw. 2014) (the “chapter 13 case”). On
November 12, 2014, Defendant SHR filed a chapter 7 bankruptcy
petition in the bankruptcy court. See In re Sea
Hawai`i Rafting, LLC, No. 14-01520 (Bankr. D. Haw. 2014)
(the “chapter 7 case”).
Chad Barry Barnes's (“Plaintiff Barnes”)
efforts to prosecute his maritime and non-maritime tort
claims against Defendant SHR and Defendant Henry have been
significantly frustrated by the operation of the bankruptcy
stay, which comes into effect automatically when a debtor
files for bankruptcy and stays the commencement or
continuation of litigation against the debtor. 11 U.S.C.
Barnes has sought to prosecute his claims by asking the
bankruptcy court to lift the automatic stays against
Defendant SHR and Defendant Henry, their bankruptcy estates,
and the vessel M/V Tehani. Chapter 7 case, Dkt. No. 285. In a
Memorandum of Decision dated May 21, 2018, the bankruptcy
court lifted the automatic stays as to the vessel M/V Tehani
and as to Defendant SHR, allowing Plaintiff Barnes to
litigate his in rem claims against the vessel and his in
personam claims against Defendant SHR. Chapter 7 case, Dkt.
No. 300. The bankruptcy court declined to lift the automatic
stays as to Defendant Henry, Defendant Henry's bankruptcy
estate, or Defendant SHR's bankruptcy estate.
March 11, 2019, Plaintiff Barnes filed a “Motion to
Reverse Referrals of Sea Hawaii Rafting, LLC and Kris Kimo
Henry to Bankruptcy Court Pursuant to Rule 28 U.S.C. §
157(d)” (the “Motion”). ECF No. 531.
Plaintiff Barnes asks the Court to withdraw the references of
the chapter 13 and chapter 7 cases to the bankruptcy court.
No party has filed a memorandum in opposition. The Court held
a hearing on Plaintiff Barnes's Motion on May 15, 2019.
general, district courts have original jurisdiction over all
bankruptcy matters. 28 U.S.C. § 1334. However, 28 U.S.C.
§ 157(a) permits district courts to refer all bankruptcy
matters to a bankruptcy court. Local Rule 1070.1(a) of the
Local Rules of Practice for the United States District Court
for the District of Hawai`i provides that, pursuant to 28
U.S.C. § 157(a), “all cases under Title 11 and
civil proceedings arising under Title 11 or arising in or
related to a case under Title 11 are referred to the
bankruptcy judges of this district.”
U.S.C. § 157 classifies matters as either “core
proceedings, ” for which the bankruptcy court may enter
appropriate orders and judgments, or “non-core
proceedings, ” which the bankruptcy court may hear but
for which it may only submit proposed findings of fact and
conclusions of law to the district court for de novo
review. Sec. Farms v. Int'l Bhd. of Teamsters,
Chauffers, Warehousemen & Helpers, 124 F.3d 999,
1008 (9th Cir. 1997) (citing 28 U.S.C. § 157).
“Actions that do not depend on bankruptcy laws for
their existence and that could proceed in another court are
considered “non-core.” Sec. Farms, 124
F.3d at 1008 (citing In re Castlerock Props., 781
F.2d 159, 162 (9th Cir. 1986)). Core proceedings include
“motions to terminate, annul, or modify the automatic
stay, ” as well as “objections to
discharges.” 28 U.S.C. § 157(b)(2)(G), (J).
party who believes that a proceeding pending in the
Bankruptcy Court should instead be litigated before the
district court may move for mandatory or permissive
withdrawal of that reference pursuant to 28 U.S.C. §
157(d).” Horowitz v. Sulla, Civ. No. 16-00433
DKW-KSC, 2016 WL 5799011, at *1 (D. Haw. Sept. 30, 2016). A
district court may also sua sponte withdraw the
reference of a case or proceeding to the bankruptcy court.
Hawaiian Airlines, Inc., 355 B.R. 214, 218 (D. Haw.
2006); 28 U.S.C. § 157(d). Motions to withdraw a
reference are heard by the district court. Fed.R.Bankr.P.
5011(a). Section 157(d) provides:
The district court may withdraw, in whole or in part, any
case or proceeding referred under this section, on its own
motion or on timely motion of any party, for cause shown. The
district court shall, on timely motion of a party, so
withdraw a proceeding if the court determines that resolution
of the proceeding requires consideration of both Title 11 and
other laws of the United States regulating organizations or
activities affecting interstate commerce.
28 U.S.C. § 157(d). The party moving for withdrawal of
the reference has the burden of persuasion. Hawaiian
Airlines,Inc., 355 B.R. at 218 (citing In
re First Alliance Mortg. ...