In re Unit Parts Co.

• Decision Date: 23 February 1981
• Docket Number: No. CIV-81-188-E.,CIV-81-188-E.
• Citation: 9 BR 386
• Parties: In re UNIT PARTS COMPANY, Debtor.
• Court: U.S. District Court — Northern District of Ohio

9 B.R. 386 (1981)

In re UNIT PARTS COMPANY, Debtor.

No. CIV-81-188-E.

United States District Court, W.D. Oklahoma.

February 23, 1981.

Aileen A. Armstrong, Asst. Gen. Counsel for Sp. Litigation, and Sara M. Green and Kathleen Aure, Co-counsel, N.L.R.B., Washington, D.C., for N.L.R.B.

John J. Preefer of Marcus & Angel, New York City, and Eugene H. Mathews of Fagin, Hewett, Mathews & Fagin, Oklahoma City, Okl., for United Food and Commercial Workers Union, AFL-CIO/CLC, Local No. 644.

Murray Cohen, Trustee, pro se, Oklahoma City, Okl., Trustee in Bankruptcy in Case No. 80-01101, In Re: Unit Parts Company, Debtor, appearing in person and pro se.

G. Blaine Schwabe, III of Crowe, Dunlevy, Thweatt, Swinford, Johnson & Burdick, Oklahoma City, Okl., for Borg-Warner Leasing Division of Borg-Warner Acceptance Co.

John N. Hermes and Louis J. Price of McAfee, Taft, Mark, Bond, Rucks & Woodruff, P.C., Oklahoma City, Okl., for Bank of America.

ORDER

EUBANKS, District Judge.

On the 19th day of February, 1981, the above styled cause came on for argument of counsel upon the National Labor Relations Board's (NLRB's) "Emergency Application for Stay Pending Appeal" pursuant to Bankruptcy Rule 805 (counterpart of Rule 8, Federal Rules of Appellate Procedure) seeking the stay of a February 17, 1981, order entered by the Bankruptcy Court in and for the Western District of Oklahoma in its Case No. 80-01101, wherein the Bankruptcy Judge although denying the trustee's request for contempt citation against United Food and Commercial Workers International Union AFL-CIO/CLC District Local No. 644 for violation of the automatic stay provisions of 11 U.S.C. § 362, and for injunctive relief against the Local Union and the NLRB, nonetheless ordered and proceeded to hear creditor NLRB's First Amended Proof of Claim "believed in excess of $345,000.00" filed with the Bankruptcy Court December 15, 1980 (amending an earlier claim "believed in excess of $100,000.00" filed October 9, 1980), objected to by the Trustee January 30, 1981 and "elected not to abstain from taking jurisdiction of" identical claims filed before the NLRB, August 29, 1980, for wages and grievances accruing on and after June 17, 1980, and after the June 6, 1980, involuntary filing of this chapter 11 case. The order for relief was entered July 7, 1980.

The applicant, National Labor Relations Board, appearing through its counsel, Sara M. Green and Kathleen Aure; Local No. 644 of the United Food and Commercial Workers Union, AFL-CIO/CLC appearing through its counsel, John Preefer and Eugene Mathews; the Trustee, Murray Cohen, appearing in person and pro se; the creditor, Borg-Warner Corporation and Borg-Warner Leasing Division of Borg-Warner Acceptance Company, appearing through its counsel, G. Blaine Schwabe, III; the creditor, Bank of America, appearing through its counsel, John Hermes and Louis Price. The Court heard extensive argument of counsel for all parties.

The applicant, NLRB, joined by District Local # 644, urges that Judge Berry has no jurisdiction, concurrent or otherwise, to determine the pending bankruptcy contingent claim of NLRB on behalf of the some 400 employees for backpay owing, for improperly discharging them, for refusing to rehire others previously terminated, to determine the amount of money, if any, such workers should receive, or the priority of any such sums, since the NLRB is vested with exclusive jurisdiction to make all such determinations involving unfair labor practices arising under the National Labor Relations Act and committed by the debtor during the pendency of this chapter 11 case, all of which will be considered in the proceeding filed with the NLRB. As authority, the applicant cites: Nathanson v. NLRB, 344 U.S. 25, 73 S.Ct. 80, 97 L.Ed. 23 (1952); In Re Shippers Interstate Service, Inc., 618 F.2d 9 (7th Cir. 1980); and Seeburg v. NLRB, 5 B.R. 364, 105 LRRM 3355 (Bkrtcy., N.D.Ill.1980).

The Trustee and counsel for creditors urge that the new Bankruptcy Reform Act, section 241 (28 U.S.C. § 1471) vests the Bankruptcy Court with assertable concurrent jurisdiction over the instant contingent claims and that there is no appealable order properly before this appellate court which could authorize this Court's injunctive interference with the Bankruptcy Court's hearing in progress to determine, or estimate, such claims.

The precise question is whether or not this Court should enjoin The Honorable Robert L. Berry, United States Bankruptcy Judge for the Western District of Oklahoma, from continuing to hear the NLRB creditor claim which was objected to by the Trustee under code section 502(a).

The appealed from Bankruptcy Court order reads in part:

2. Under the jurisdictional provisions of 28 U.S.C. § 1471, this Court has determined that all matters relating to claims by employees and former employees of the debtor or filed on their behalf as well as claims by the United Food and Commercial Workers International Union AFL-CIO/CLC District Local No. 644 and the National Labor Relations Board, are matters "arising from or related to" these bankruptcy proceedings. This Court has therefore, under the aforementioned Statute, elected not to abstain from taking jurisdiction of these matters and will itself make all determinations of all issues regarding them including, but not limited to, validity of all claims, amounts due thereunder, liquidation of the claims and priorities of distribution. In making these determinations, this Court will not be bound by any decision, ruling or finding of any lower court or administrative board, body or tribunal. All parties are expected to govern themselves accordingly. Also, according to the aforementioned Statute, this Court understands that this decision not to abstain is not reviewable by appeal or otherwise 28 U.S.C. § 1471(d).

Section 1471 of Title 28, United States Code, provides in part:

(a) Except as provided in subsection (b) of this section, the district courts shall have original and exclusive jurisdiction of all cases under title 11.

(b) Notwithstanding any Act of Congress that confers exclusive jurisdiction on a court or courts other than the district courts, the district courts shall have original but not exclusive jurisdiction of all civil proceedings arising under title 11 or arising in or related to cases under title 11.

(c) The bankruptcy court for the district in which a case under title 11 is commenced shall exercise all of the jurisdiction conferred by this section on the district courts.

(d) Subsection (b) or (c) of this section does not prevent a district court or a bankruptcy court, in the interest of justice, from abstaining from hearing a particular proceeding arising under title 11 or arising in or related to a case under title 11. Such abstention, or a decision not to abstain, is not reviewable by appeal or otherwise.

. . . (Emphasis added.)

Cases "under Title 11 are to be distinguished from civil proceedings arising under Title 11 or civil proceedings, related to or arising in those cases. The former is the subject of § 1471(a), while the latter are covered by § 1471(b)." 1 Collier on Bankruptcy 3-37.

The claims pending before the NLRB probably are not removable to the Bankruptcy Court under 28 U.S.C. § 1478 since the NLRB may be a governmental unit seeking to enforce its "regulatory power." But the issue here is the pervasive jurisdictional sweep of section 1471. By conscious design, Congress endowed the Bankruptcy Court with wide latitude to deal with all money problems touching the financially threatened. The "idea behind the 1978 legislation and § 1471 in particular, was that it is not fruitful and is in fact destructive to categorize jurisdiction. The three terms were used in § 1471(b) to include all possible proceedings. . . ." 1 Collier 3-43. (Emphasis added.) As stated in Reform Act Legislative History notes:

Subsection (b) is a significant change from current law. It grants the bankruptcy court original (trial), but not exclusive jurisdiction of all civil proceedings arising under Title 11 or arising under or related to cases under Title 11. This is the broadest grant of jurisdiction to dispose of proceedings that arise in bankruptcy cases or under the Bankruptcy Code. Actions that formerly had to be tried in state court or in federal district court, at great cost and delay to the estate, may now be tried in the bankruptcy courts. . . . The bankruptcy court is given in personam jurisdiction as well as in rem jurisdiction to handle everything that arises in a bankruptcy case." S.Rep.No. 989, 95th Cong. 1st Sess. 195-54, U.S.Code Cong. & Admin.News 1978, 5787 (1978).

Noteworthily, the "original jurisdiction . . . granted by § 1471(b) is vested `notwithstanding any Act of Congress that confers exclusive jurisdiction on a court or courts other than the district courts.' For example, the Tucker Act confers exclusive jurisdiction of cases brought under that statute involving more than $10,000.00 on the court of claims. The thrust of the introductory language to § 1471(b), then, is that, unless the court chooses to abstain, civil proceedings which would otherwise be heard in the court of claims will instead be heard in the bankruptcy court. This provision is in accordance with the intent of Congress to bring all litigation within the umbrella of the bankruptcy court, irrespective of Congressional statements to the contrary in the context of certain specialized litigation." 1 Collier 3-39-40. (Emphasis added.) Now, bankruptcy jurisdictional breadth includes habeas corpus, and all other writs, plus all powers of courts of equity, law or admiralty (see 1 Collier 3-36) and in contrast to the former Act applies with equal force to all Title 11 proceedings whether rehabilitation or liquidation. 1 Collier 3-9.

In addition to the civil proceedings mentioned above, other jurisdictional illustrations "include controversies regarding whether to appoint a trustee under chapter 11,...