Doe v. Nail
| Decision Date | 19 January 2021 |
| Docket Number | 1:20-cv-00217-FPG |
| Parties | LG 37 DOE, Plaintiff, v. DOUGLAS NAIL, et al. Defendants. |
| Court | U.S. District Court — Western District of New York |
Plaintiff LG37 Doe ("Plaintiff") brings this personal injury tort action against Defendants Douglas Nail ("Nail"), Greater Niagara Frontier Council, Inc., Boy Scouts of America ("GNF"), and Boy Scouts of America, Inc. ("BSA") (together "Defendants"), alleging that, from around 1983 to around 1987, Nail sexually assaulted and battered him while serving as a Scout Master. ECF No. 1-2 ¶ 14. Plaintiff's action is one of approximately 290 similar cases pending in state and federal courts throughout the country against BSA and its local councils ("Pending Abuse Actions"). Plaintiff brought this action in New York state court and BSA removed it to this Court. ECF No. 1. Plaintiff now moves to sever the claims against BSA from the claims against GNF and Nail and to remand the claims against GNF and Nail back to state court. ECF No. 3.
For the reasons stated below, Plaintiff's motion is GRANTED IN PART and DENIED IN PART; and the Court will sever the claims against BSA and GNF from the claims against Nail and remand only the claims against Nail to state court.
On December 3, 2019, Plaintiff filed this action against Defendants in the Supreme Court of the State of New York, Erie County. ECF No. 1-2 at 2. On February 18, 2020, BSA filed a voluntary petition for relief under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware ("Delaware Bankruptcy Court"). See ECF No. 1 at 2. Plaintiff's claims against BSA in this matter were thus stayed upon BSA's bankruptcy filing pursuant to the automatic stay imposed by 11 U.S.C. § 362(a). That same day, BSA removed the state court action to this Court pursuant to 28 U.S.C. §§ 1334 and 1452(a).1 BSA's removal notice informed the Court that it had filed a motion in the United States District Court for the District of Delaware ("Delaware District Court") seeking transfer of the Pending Abuse Actions to that court pursuant to 28 U.S.C. §§ 157(b)(5) and 1334(b) in order to consolidate all the Pending Abuse Actions. See id. 2-3. That motion is still pending. In addition, BSA's removal notice "submit[ted] that this Court should refrain from taking any further action in this case, including any decisions with respect to any motions to remand or abstain," pending the Delaware District Court's ruling on the transfer motion. Id. at 4.
As anticipated by BSA, on March 19, 2020, Plaintiff filed a motion seeking (1) severance of the claims against BSA from the claims against GNF and Nail, pursuant to Federal Rule of Civil Procedure 21; and (2) remand of the claims against GNF and Nail, pursuant to 28 U.S.C. § 1447(c), or § 1452(b). Alternatively, Plaintiff asked this Court to abstain from hearing these claims in favor of New York State Supreme Court pursuant to 28 U.S.C. §§ 1334(c)(1) and/or 1334(c)(2). ECF No. 3 at 1-2. On March 20, 2020, the Court ordered Defendants to respond to Plaintiff's motion by April 3, 2020, ECF No. 5, but none of them filed a response.
On April 1, 2020, BSA and GNF filed a notice with this Court indicating that the Delaware Bankruptcy Court had entered a consent order staying the prosecution of claims against "BSARelated Parties" in certain of the Pending Abuse Actions. ECF No. 7. GNF is included among the BSA Related Parties and claims against GNF were initially stayed via consent order through May 18, 2020. ECF No. 7 at 3-5; ECF No. 7-1 at 93. Nail is not one of the "BSA Related Parties" covered by the consent order, and, as a result, the prosecution of claims against Nail are not stayed. See ECF No. 13-1 at 4. The time period of the stay as to GNF has thrice been extended by stipulation and the prosecution of such claims is currently stayed through March 19, 2021. ECF No. 14 at 1.
On September 30, 2020, the Court issued an Order to Show Cause, ECF No. 10, directing Nail to explain whether the Delaware Bankruptcy Court's stay applies to him and to show cause why this Court should not consider Plaintiff's motion to sever and remand as against Nail notwithstanding the Delaware Bankruptcy Court's stay in this action. That Order also invited, though it did not require, a response from BSA and GNF. ECF No. 10 at 2. To date, neither BSA nor GNF has weighed-in on the matter. On October 7, 2020, Nail's attorney submitted an Affidavit in response to the Order to Show Cause. ECF No. 11. On October 21, 2020, Plaintiff filed a response to that Affidavit. ECF No. 13.
Plaintiff seeks to (1) sever BSA from this action on the ground that he will be prejudiced if this case does not go forward because all litigation against BSA has been stayed pursuant to the automatic stay provisions of 11 U.S.C. § 362(a); and (2) remand the claims against GNF and Nail to state court. In support of this relief, Plaintiff argues that BSA's co-defendants are not entitled to the benefits of the automatic stay and that BSA is not an indispensable party to this action. See generally ECF Nos. 3, 4, 13.
Addressing GNF first, the Court notes that Plaintiff's motion to sever and remand was filed prior to the consent order enjoining prosecution of claims against "BSA Related Parties." Since the consent order defines GNF as a BSA Related Party and proscribes prosecution of claims against such parties, the Court declines to sever and remand as to GNF. See ECF Nos. 7-1 at 8, 93 ().
For his part, Nail requests that the Court delay ruling on Plaintiff's motion to sever and remand "until the Delaware Bankruptcy Court decides the issue of whether or not the [GNF] will or will not be afforded the protections of bankruptcy based upon the filing of bankruptcy by the [BSA]." ECF No. 11 ¶¶ 3, 7.
In support of this request, Nail argues that "[i]f and when the Delaware Bankruptcy Court makes a decision denying the 'channeling injunction' by [GNF] for protections under the BSA bankruptcy, the plaintiff will renew his Motion to Remand/Sever the case against [GNF] back to Erie County Supreme Court." Id. ¶ 5. It is Nail's position that if the Delaware Bankruptcy Court ultimately denies protections for GNF under BSA's bankruptcy at the termination of the consent order, and if Plaintiff then brings a motion to sever and remand as to GNF, Nail may be subject to duplicative discovery proceedings, depositions, and trials that would be financially burdensome. Id. ¶¶ 4-6. The Court is not persuaded by this speculative argument. See Lucero v. Boy Scouts of America, et al., Adv. No. 20-1013-j, ECF No. 19 at 3-4 ().
The Court has also considered whether the pending Nationwide Transfer Motion is an impediment to the Court ruling on Plaintiff's motion at this time. Though BSA failed to respond to Plaintiff's motion and did not weigh-in on the Court's Order to Show Cause, it did request in its notice of removal "that this Court . . . refrain from taking any further action in this case, including any decisions with respect to any motions to remand or abstain," pending the Delaware District Court's ruling on the transfer motion. ECF No. 1 at 4.
As this Court recently noted in J.R. v. Allegheny Highlands Council, Inc., federal district courts around the country have handled the Pending Abuse Actions before them in different ways, which include: denying remand without prejudice; staying the federal action in its entirety; refraining from ruling on pending motions to remand; and remanding despite the pendency of a transfer motion. See No. 1:20-cv-00215-FPG, 2020 WL 7398754, at *2-3 (W.D.N.Y. Dec. 17, 2020) (collecting cases). After examining those decisions, the Court concludes that the posture of this case presents a scenario in which the Court should rule on Plaintiff's motion despite the pending transfer motion. Such a conclusion is well-supported. See, e.g., Dieterly v. BSA, No. 20-902, 2020 U.S. Dist. LEXIS 110534, at *7 (E.D. Pa. June 24, 2020) () (first citing In re Eight Adversary Proceedings Removed from State Court by Johnson & Johnson, 603 B.R. 849, 852 (Bankr. S.D. Fla. July 2, 2019); and then citing In re Johnson & Johnson, No. 19-cv-3531(KPF), 2019 U.S. Dist. LEXIS 95445, at *17-19 (S.D.N.Y. June 4, 2019)); Michael O'Malley v. Boy Scouts of America, et al., No. 1:20-cv-1526-WFK-RLM, ECF No. 13 (E.D.N.Y. Mar. 11, 2020) (); see also generally Tavener v. Johnson & Johnson, No. 5:19-CV-0459 (GTS/TWD), 2019 U.S. Dist. LEXIS 110034, at *8-9, 19 (N.D.N.Y. July 2, 2019) (); Lucero, Adv. No. 20-1013-j, ECF No. 19 at 4, n.8 () (collecting cases).
Accordingly, for the reasons stated above, the Court will address the merits of Plaintiff's motion.
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