Bet Midrash Ohr Hachayim Hakadosh, Inc. v. City of Hollywood, Florida

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF FLORIDA
FORT LAUDERDALE DIVISION
In re:
BET MIDRASH OHR HACHAYIM
HAKADOSH, INC., a Florida non-profit
corporation, 	Case No. 26-10599-SMG
Debtor. 	Chapter 11
_________________________________________/
BET MIDRASH OHR HACHAYIM
HAKADOSH, INC., a Florida non-profit
corporation,
Plaintiff,
v. 	Adv. No. 26-1132-SMG
CITY OF HOLLYWOOD, Florida,
Defendant.
_________________________________________/
ORDER DETERMINING NON-CORE STATUS OF REMOVED CLAIM
Scott M. Grossman, Chief Judge
United States Bankruptcy Court	_____________________________________________________________________________
ORDERED in the Southern District of Florida on April 29, 2026.
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On January 16, 2026, Bet Midrash Ohr Hachayim Hakadosh, Inc., which
operates a synagogue in Hollywood, Florida, filed a voluntary petition1 under chapter
11 of the Bankruptcy Code. At the time of filing, there was an action already pending
between Bet Midrash and the City of Hollywood, Florida.2 This action – in which Bet
Midrash seeks federal civil rights damages and injunctive relief arising from the
City’s denial of Bet Midrash’s special exception zoning application – was originally
filed on March 26, 2025, in the United States District Court for the Southern District
of Florida.
On July 22, 2025, the City moved3 in the District Court to dismiss the
complaint under Federal Rule of Civil Procedure 12(b)(6). While the motion to dismiss
was pending, Bet Midrash moved4 to refer that civil action to the bankruptcy court
in light of its pending bankruptcy case. On March 17, 2026, the District Court
granted5 that motion, referring “all motions filed in this case, now and in the future”
to this Court, “who shall determine whether this proceeding is a core proceeding
under § 157 or is a proceeding that is otherwise related to a case under title 11 or is
neither.”6 The District Court further ordered:
2. 	In the event the bankruptcy judge determines that this matter is
a core proceeding, the bankruptcy judge shall hear and determine all
matters in this case and enter appropriate orders and judgments,
subject to review under 28 U.S.C. § 158.
3. 	In the event the bankruptcy judge determines that this case is not
a core proceeding but is otherwise related to a case under title 11,
1 Dkt. No. 1.
2 Case No. 0:25-cv-60592-EA.
3 Case No. 0:25-cv-60592-EA, Dkt. No. 10.
4 Case No. 0:25-cv-60592-EA, Dkt. No. 23.
5 Case No. 0:25-cv-60592-EA, Dkt. No. 26.
6 Id. at 2.
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pursuant to 28 U.S.C. § 157(c), the bankruptcy judge shall submit
proposed findings of fact and conclusions of law to the district court, and
any final order or judgment shall be entered by the district judge after
considering the bankruptcy judge's proposed findings and conclusions
and after reviewing de novo those matters to which any party has timely
and specifically objected.
4. 	In the event the bankruptcy judge determines that this case is
neither a core proceeding nor otherwise related to a case under title 11,
then the bankruptcy judge shall promptly give notice to the parties and
this Court of the same in order that this referral might be ordered
withdrawn.7
Finally, the District Court administratively stayed the case pending a determination
by this Court.8
The complaint filed by Bet Midrash in the District Court asserts that Bet
Midrash, a religious nonprofit, was unlawfully denied a special zoning exception by
the City of Hollywood to operate a K–12 Jewish school at its property and challenges
the City’s zoning scheme as unconstitutional. More specifically, Count I asserts a
facial equal protection challenge to Article V of the City of Hollywood Zoning and
Land Development Regulations; Count II asserts a violation of the United States
Constitution, First and Fourteenth Amendments, and seeks damages under 42
U.S.C. § 1983; and Count III asserts a violation of the United States Constitution,
First and Fourteenth Amendments, and seeks injunctive relief under 42 U.S.C.
§ 1983.
28 U.S.C. § 1334(b) vests jurisdiction over this civil proceeding in the District
Court. As authorized by 28 U.S.C. § 157(a), the District Court has referred all
7 Id. at 2–3.
8 Id. at 3.
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proceedings arising under the Bankruptcy Code or arising in or related to cases under
the Bankruptcy Code to the bankruptcy judges for this district.9 Although the
complaint here was filed in the District Court before the petition date, the District
Court has since referred it10 to this Court pursuant to 28 U.S.C. § 157. Under 28
U.S.C. § 157(b), where a proceeding has been referred to the Bankruptcy Court, the
bankruptcy judge may hear and determine – and may enter appropriate final orders
and judgments in – all “core proceedings” arising under the Bankruptcy Code.
“Core proceedings are narrow in scope, and include only those cases that
implicate the property of the bankruptcy estate and either invoke substantive rights
created by federal bankruptcy law or that exist exclusively in the bankruptcy
context.”11 28 U.S.C. § 157(b)(2) contains a non-exclusive list of core proceedings, none
of which are directly relevant here.
“[R]elated non-core proceedings can be quite broad.”12 “An action is related to
bankruptcy if the outcome could alter the debtor’s rights, liabilities, options, or
freedom of action (either positively or negatively) and which in any way impacts upon
the handling and administration of the bankrupt estate.”13 Bankruptcy judges may
still hear most non-core proceedings.14 But rather than enter final orders and
judgments, the bankruptcy judge must instead submit proposed findings of fact and
9 Dist. Ct. Admin. Order 2024-84 (Nov. 1, 2024); see also Dist. Ct. Loc. R. 87.2; see generally In re
Jimenez, 627 B.R. 536, 540–41 (Banker. S.D. Fla. 2021) (explaining federal bankruptcy jurisdiction).
10 Case No. 0:25-cv-60592-EA, Dkt. No. 26.
11 Wortley v. Bakst, 844 F.3d 1313, 1318 (11th Cir. 2017)
12 Id.
13 Id. at 1318–19 (quoting In re Lemco Gypsum, Inc., 910 F.2d 784, 788 (11th Cir. 1990)).
14 See 28 U.S.C. § 157(c)(1).
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conclusions of law to the District Court.15 If all parties consent, however, then in most
cases the bankruptcy judge may hear and determine the non-core proceeding and
may enter final orders and judgments.16
There is no question here that the claims asserted by Bet Midrash in the
complaint are non-core claims. These claims are civil rights claims that neither
invoke substantive rights created by federal bankruptcy law nor exist exclusively in
the bankruptcy context. But they are related to Bet Midrash’s bankruptcy case, as
their disposition could alter the debtor’s rights, liabilities, options, or freedom of
action and could conceivably have an effect upon the handling and administration of
the bankruptcy estate.
Accordingly, it is ORDERED that:
1. 	The claims asserted in the complaint by Bet Midrash against the City of
Hollywood are non-core claims but are related to Bet Midrash’s bankruptcy case.
2. 	In accordance with the District Court’s referral order, because the
claims are non-core claims, the Court will submit proposed findings of fact and
conclusions of law to the District Court, and any final order or judgment will be
entered by the District Court judge.
# # #
Copies furnished to all counsel of record by the Clerk of Court.
15 Id.
16 See 28 U.S.C. § 157(c)(2).
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