Case KLP Doc Filed 10/28/16 Entered 10/28/16 14:39:56 Desc Response Page 1 of 6

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1 Response Page 1 of 6 UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA In re Case No (EDVA) HOBET MINING, LLC, Chapter 11 a West Virginia Limited Liability Company, Debtor, STEVEN GODBY, Plaintiff, v. A.P ERP COMPLIANT FUELS, LLC, a Virginia limited liability company; VIRGINIA CONSERVATION LEGACY FUND, INC., a Virginia corporation; ERP ENVIRONMENTAL FUND, INC., a West Virginia corporation; BENNY DIXON, individually; CHARLENE NECESSARY, individually; and DENNIS WELLMAN, individually, Defendants. PLAINTIFF S RESPONSE TO MOTION TO TRANSFER VENUE Plaintiff, Steven Godby, by counsel, files this Response in opposition to the Motion to Transfer Venue filed by Defendants ERP Complaint Fuels, LLC, Virginia Conservation Legacy Fund, Inc., ERP Environmental Fund, Inc., Benny Dixon, Charlene Necessary, and Dennis Wellman ( Defendants ). Plaintiff filed an Amended Complaint alleging employment discrimination claims under West Virginia law in the Circuit Court of Boone County, West Virginia on February 22, Defendants removed Plaintiff s suit to this Court on March 9, Thereafter, on March 23, 1

2 Response Page 2 of , Defendants filed their Motion to Transfer Venue, seeking to transfer this matter to the United States Bankruptcy Court for the Eastern District of Virginia, Richmond Division. Plaintiff contests this Court s jurisdiction over this matter and filed a Motion to Remand on March 18, Significantly, Plaintiff s Amended Complaint removed any and all claims against Hobet Mining, LLC (the debtor in the Virginia Bankruptcy Court) and removed Hobet Mining, LLC entirely as a party to his lawsuit. Only claims against Defendants and their agents and affiliates remain. In his Motion to Remand, Plaintiff argues that: - The Bankruptcy Court has no jurisdiction over his claims because neither the parties nor the Virginia Bankruptcy Court can create their own jurisdiction by an agreement or order. See Valley Historic Ltd Partnership v Bank of NY, 486 F.3d 831 (4th Cir 2007); - Plaintiff s lawsuit against Defendants is not a core proceeding or a related proceeding and therefore, the Bankruptcy Court has no jurisdiction over his claims against Defendants; - Even if Plaintiff s claims against Defendants could be considered to be a related proceeding, mandatory abstention is appropriate under 28 USC 1334(c)(2); - Even if mandatory abstention is not appropriate, permissive abstention or equitable remand would be appropriate under 28 USC 1334(c)(1) and 28 USC 1452(b); and - State court is the preferable forum for adjudicating the state law claims that Plaintiff has asserted against Defendants. Before it even considers Defendants Motion to Transfer Venue, this Court should first decide Plaintiff s Motion to Remand. When presented with competing motions to remand a case and to transfer venue, a court is to consider the remand motion first, and then address the motion to transfer venue only if it first denies the motion to remand. Lothian Cassidy LLC v. 2

3 Response Page 3 of 6 Ransom, 428 B.R. 555, 558 (E.D.N.Y. 2010). See also In re Scanware, Inc., 411 B.R. 889, 893 (Bankr. S.D. Ga.) aff'd sub nom. Rayonier Wood Products, L.L.C. v. ScanWare, Inc., 420 B.R. 915 (S.D. Ga. 2009), ( When presented with a motion to remand or a motion to transfer the venue of a proceeding which has been removed from the state court, the bankruptcy court must first evaluate whether the state court action was properly removed; that is, it must determine whether it has subject matter jurisdiction over the proceeding. ) citations omitted. Indeed, [i]f there is a jurisdiction defect and the parties and the action are not properly before the Court, any action taken by the Court would be void. In re Aztec Indus., Inc., 84 B.R. 464, 467 (Bankr. N.D. Ohio 1987). As the Bankruptcy Court for the Southern District of Florida has observed, under the statutory scheme, the bankruptcy court to which the action is removed serves a gatekeeper function in which two jurisdictional issues can and should be decided... First, is there jurisdiction under 28 U.S.C permitting removal under 1452, and second, if there is jurisdiction, is it appropriate to exercise that jurisdiction or should (or must) the case be remanded back to the state court? Lennar Corp. v. Briarwood Capital LLC, 430 B.R. 253, 261 (Bankr. S.D. Fla. 2010); see also Frelin v. Oakwood Homes Corp., 292 B.R. 369, 380 (Bankr. E.D. Ark. 2003) (discussing cases and concluding that, not only does this Court have jurisdiction to decide the Plaintiffs' motion to remand and/or abstain, the Court should decide whether remand and/or abstention is required before determining whether [to transfer] venue. ); Pharos Capital Grp., LLC v. Nutmeg Ins. Co., 999 F. Supp. 2d 947, 952 (N.D. Tex. 2014) ( deciding the Motion to Remand first will preserve judicial resources by permitting this Court to forego a transfer analysis and decide as an initial matter whether federal jurisdiction attaches, rather than leaving jurisdictional questions for a transferee court. ). 3

4 Response Page 4 of 6 These cases demonstrate that, in light of Plaintiff s challenges to the jurisdiction of this Court, Plaintiff s Motion to Remand should be decided first. Plaintiff submits that the Motion to Remand will establish that this Court must either remand and/or abstain and consequently, that Defendants Motion to Transfer will be rendered moot. Yet, even if this Court sees fit to entertain Defendants Motion to Transfer Venue, the Court should determine that Defendants have not met their burden. The party moving for a transfer has the burden to show by a preponderance of the evidence that transfer is warranted. Creekridge Capital, LLC v. Louisiana Hosp. Ctr., LLC, 410 B.R. 623, 629 (D. Minn. 2009). See also In re A.R.E. Mfg. Co., Inc., 124 B.R. 912, 914 (Bankr. M.D. Fla. 1991) ( a court should exercise its power to transfer cautiously and the party moving for the transfer has the burden of proving that the transfer would be in the best interest of justice and for the convenience of the parties. ). In determining the appropriate venue [of an adversary proceeding], bankruptcy courts generally take the following eight factors into account: 1) the location of the Plaintiff and defendant; 2) the ease of access to the necessary proof; 3) the availability of subpoena power for the unwilling witnesses; 4) the expense related to obtaining willing witnesses; 5) the enforceability of any judgment rendered; 6) the ability to receive a fair trial; 7) the state's interest in having local controversies decided within its borders, by those familiar with its law; and 8) the economics of the estate administration. In re Hechinger Inv. Co. of Delaware, Inc., 288 B.R. 398, (Bankr. D. Del. 2003). Defendants bear the burden to establish that these factors favor transfer. Their motion fails to do so. Defendants entire claim of bankruptcy jurisdiction is premised upon a potential contract dispute between Defendants and Hobet Mining, LLC. Plaintiff as no knowledge of the specifics 4

5 Response Page 5 of 6 of that contract and, in fact, has nothing to do with that dispute. Plaintiff s employment claims against Defendants involve West Virginia witnesses, West Virginia documentary evidence and are based solely on West Virginia law. Under the facts and circumstances of this case, Defendants cannot establish that the factors cited above favor transfer of Plaintiff s state-law based employment case against non-bankrupt parties to the Bankruptcy Court in Virginia. Accordingly, the Court should first decide Plaintiff s Motion to Remand and should deny Defendants Motion to Transfer Venue. STEVEN GODBY By Counsel /s/ Paul L. Frampton, Jr. Paul L. Frampton, Jr. (WVSB#9340) Mark A. Atkinson (WVSB #184) John-Mark Atkinson (WVSB #12014) ATKINSON & POLAK, PLLC P.O. Box 549 Charleston, WV (304) Harry M. Hatfield (WVSB #1635) HATFIELD & HATFIELD PLLC P.O. Box 598 Madison, WV (304)

6 Response Page 6 of 6 UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA In re Case No (EDVA) HOBET MINING, LLC, Chapter 11 a West Virginia Limited Liability Company, Debtor, STEVEN GODBY, Plaintiff, v. A.P ERP COMPLIANT FUELS, LLC, a Virginia limited liability company; VIRGINIA CONSERVATION LEGACY FUND, INC., a Virginia corporation; ERP ENVIRONMENTAL FUND, INC., a West Virginia corporation; BENNY DIXON, individually; CHARLENE NECESSARY, individually; and DENNIS WELLMAN, individually, Defendants. CERTIFICATE OF SERVICE I, Paul L. Frampton, Jr., do hereby certify that on March 25, 2016 I electronically filed the foregoing Plaintiff s Response to Motion to Transfer Venue with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following CM/ECF participants: C. David Morrison, Esq. Michael J. Moore, Esq. STEPTOE & JOHNSON PLLC 400 White Oaks Boulevard Bridgeport, WV Phone: (304) Fax: (304) Counsel for Defendants 6 /s/ Paul L. Frampton, Jr. Paul L. Frampton, Jr. (WVSB#9340)