United States District Court, N.D. Alabama, Southern Division
For Terry DeWayne Truss, LeVorica Andrille Truss, Plaintiffs: Bradford W Botes, LEAD ATTORNEY, Bond, Botes, Reese & Shinn, P.C., Birmingham, AL.
For LVNV Funding LLC, Susan Iler Gaines, Defendants: Neal D Moore, III, LEAD ATTORNEY, FERGUSON FROST & DODSON LLP, Birmingham, AL.
ABDUL K. KALLON, UNITED STATES DISTRICT JUDGE.
This matter is before the court on Defendants' Motion to Withdraw the Reference. Doc. 1. For the reasons discussed below, the court will deny the motion.
Plaintiffs Terry DeWayne Truss and LeVorica Andrille Truss filed for Chapter 13 bankruptcy protection on June 19, 2014. Doc. 1-6 at 2. On June 26, 2014, Resurgent Capital Services, acting as agent of defendant LVNV Funding, LLC, filed a proof of claim. Doc. 4-1 at 2, 4. The proof of claim listed an unsecured amount of $393.65 and a charge off date of January 13, 2006. Id. at 4. Plaintiffs filed this adversary proceeding in the Bankruptcy Court asserting only violations of the Fair Debt Collection Practices Act (" FDCPA" ). Doc. 1-1 at 3-5. Defendants moved the District Court for the Northern District of Alabama to withdraw the reference and relieve the Bankruptcy Court of jurisdiction pursuant to 28 U.S.C. § 157(d) and Federal Rule of Bankruptcy Procedure 5011. Doc. 1.
District courts possess " original and exclusive jurisdiction of all cases under title 11" of the Bankruptcy Code. 28 U.S.C. § 1334(a) (2012). District courts are permitted, however, to refer all cases to the bankruptcy court to the extent that they arise under Title 11, arise in Title 11, or relate to a case under Title 11. 28 U.S.C. § 157(a) (2012). This court has entered such a general order of reference. See Bank United v. Manley, 273 B.R. 229, 234 n.10 (N.D. Ala. 2001).
The reference that applies to this Chapter 13 case, however, is not absolute because 28 U.S.C. § 157(d) provides for its withdrawal under limited circumstances, either as a mandatory matter or as a permissive matter. The district court is required to 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).
Some courts, citing the statute's plain language, have held that withdrawal is required if any consideration of a non-Title 11 federal law is necessary to a resolution of the dispute. See, e.g., In re Kiefer, 276 B.R. 196, 199 (E.D. Mich. 2002). Most courts, however, have found that " 'withdrawal should be granted only if the current proceeding could not be resolved without substantial and material consideration of the non-Code federal law.'" Birgans v. Magnolia Auto Sales, Case No. 5:12-mc-03830-CLS, 2012 WL 6000339, *2 (N.D. Ala. Nov. 30, 2012) (quoting Matter of Vicars Ins. Agency, Inc., 96 F.3d 949, 952 (7th Cir. 1996)); Abrahams v. Phil-Con Services, LLC, Case No. 2:10-cv-00326-WS-N, 2010 WL 4875581, *2 (S.D. Ala. Nov. 23, 2010). This is the approach taken by all of the district courts within the Eleventh Circuit that have considered the issue. Under this approach, for withdrawal to be warranted, " 'the issues in question [must] require more than the mere application of well-settled or " hornbook" non-bankruptcy law; significant interpretation of the non-Code statute must be required.'" Abrahms, 2010 WL 4875581 at *2 (quoting Vicars, 96 F.3d at 953).
This court, in line with the other courts in this circuit, will follow the latter approach. The FDCPA is undisputedly a non-Title 11 federal law impacting interstate commerce, particularly when the use of an " instrumentality of interstate commerce" is a definitional requirement for regulation under the statute. 15 U.S.C. § 1692a(6) (2012). Whether withdrawal is required, then, turns on whether ...