Motors Liquidation Company

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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
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In re 	: 	Chapter 11
:
MOTORS LIQUIDATION COMPANY, et al., 	: 	Case No.: 09-50026 (REG)
f/k/a General Motors Corp., et al. 	:
: 	(Jointly Administered)
Debtors. 	:
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DECISION WITH RESPECT TO NO STAY
PLEADING, AND RELATED MOTION FOR
ABSTENTION (SESAY PLAINTIFFS)
APPEARANCES:
KING & SPALDING LLP
Attorneys for General Motors LLC
1185 Avenue of the Americas
New York, New York 10036
By: 	Arthur J. Steinberg, Esq.
Scott I. Davidson, Esq.
KIRKLAND & ELLIS LLP
Attorneys for General Motors LLC
300 North LaSalle
Chicago, Illinois 60654
By: 	Richard C. Godfrey, Esq.
Andrew B. Bloomer, Esq.
GARY PELLER
Attorney for Ishmail Sesay and Joanne Yearwood
600 New Jersey Avenue, NW
Washington, DC 20001
By: 	Gary Peller, Esq.
ROBERT E. GERBER
UNITED STATES BANKRUPTCY JUDGE:
Once again—now for the fourth time, and for the second time by the same
counsel—a plaintiff group wishing to proceed ahead of all of the others has asked for
leave to go it alone. This request, brought on behalf of plaintiffs Ishmail Sesay and
Joanne Yearwood (the “Sesay Plaintiffs”), by Gary Peller, Esq., the same counsel whose
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contentions I rejected in my written opinion denying the second request, follows two
written decisions1 and an oral one, all holding that litigants with ignition switch monetary
loss claims barred, in whole or in part, by my July 5, 2009 sale order (the “Sale Order”)
must await the conclusion of the now-ongoing briefing and argument before me in all of
the other actions, whose number has now swollen to over 100.2 This request too is
denied. The great bulk of the contentions here do not differ from the contentions I
rejected in Phaneuf and Elliott, the latter of which were made by this same counsel. And
the new contentions (asserted insufficient time to respond and other assertedly unfair
procedures) and the new request (that I abstain from hearing this controversy) lack merit
as well.
The Sesay Plaintiffs’ action will be stayed along with the others.
My Findings of Fact (made solely with respect to the Sesay Plaintiffs’ claims) and
Conclusions of Law (truncated to limit discussion of matter previously set forth in
Phaneuf and Elliott) follow.
Facts
In April 2014, New GM filed a motion (the “Motion to Enforce”) to enforce the
Sale Order with respect to ignition switch monetary loss civil actions (“Ignition Switch
Actions”). In May, I held an on-the-record conference to discuss coordinated procedures
to tee up the Motion to Enforce issues for judicial consideration in light of the growing
number of Ignition Switch Actions—87 at the time, though the number has now swollen
to over 100. Counsel for New GM and Ignition Switch Actions plaintiffs conferred and
1 	See In re Motors Liquidation Co., 513 B.R. 467 (Bankr. S.D.N.Y. 2014) (“Phaneuf”); In re
Motors Liquidation Co., 514 B.R. 377 (Bankr. S.D.N.Y. 2014) (“Elliott”).
2 	At the time of Phaneuf, there were 87 other actions. New GM advises that there are now over
100. See New GM Response at 3.
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negotiated a broad array of mechanisms to agree upon undisputed facts and identify key
threshold issues (“Threshold Issues”) whose determination would resolve or facilitate
resolution of the Motion to Enforce.
As part of that effort—given that prosecution of many, if not most, of the Ignition
Switch Actions claims at the time was barred by terms of the Sale Order (assuming that
such terms were enforceable against Ignition Switch Actions plaintiffs—a matter yet to
be decided, and which was included amongst the Threshold Issues)—the Ignition Switch
Actions plaintiffs voluntarily put their actions on hold, pending determination of the
Threshold Issues. Counsel for New GM and the great bulk of the Ignition Switch Actions
plaintiffs who had filed suit as of that time established a procedure to move forward:
Ignition Switch Actions plaintiffs would either (i) agree to enter into a stipulation with
New GM staying their individual Ignition Switch Actions, or (ii) file with the Court a
“No Stay Pleading” explaining why they believed their individual Ignition Switch
Actions should not be stayed. I approved these procedures in a scheduling order (the
“Scheduling Order”). All but a very few of the plaintiff groups agreed to the stay
stipulations. The Sesay Plaintiffs are one of only seven plaintiff groups to object to
staying the individual proceedings.3 Their counsel, Peller, represents three of these
groups.
3 	The other six are the Phaneuf Plaintiffs, the Elliott Plaintiffs, Dori Powledge, Alejandro Alers, the
Bloom Plaintiffs, and the Bledsoe Plaintiffs. I issued written decisions denying relief with respect
to the Elliott and Phaneuf Plaintiffs. At a later conference in August, counsel for Ms. Powledge
explained why he wished to proceed with his case, but I found that Ms. Powledge’s situation was
no different than any of the others. After the Sesay Plaintiffs filed their No Stay Pleading, three
additional no stay pleadings were filed by Alejandro Alers, Karen Bloom, and the Bledsoe
Plaintiffs. The Bledsoe Plaintiffs are once again represented by Peller, who previously filed No
Stay Pleadings on behalf of the Elliott and Sesay Plaintiffs. The Bledsoe Plaintiffs group includes
Celestine Elliott and Lawrence Elliott, two of the earlier Elliott Plaintiffs, with respect to whom I
have already ruled.
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In June 2014, New GM filed a motion to establish stay procedures for newly-filed
Ignition Switch Actions, which I approved in an order dated July 8, 2014 (the “Stay
Procedures Order”).4 That order requires plaintiffs in newly-filed Ignition Switch
Actions, within three business days of receipt of a form stay stipulation, to either enter
into a stay stipulation or file a “No Stay Pleading” with the Court.
In July 2014, I held another conference to address additional procedural issues
that arose after the entry of the Scheduling Order. At the July conference, I identified the
four Threshold Issues that should be decided first in the contested proceedings, and
entered an order (the “Supplemental Scheduling Order”) with respect to a briefing
schedule.5
The Phaneuf Plaintiffs filed a No Stay Pleading arguing that their claims related
to New GM’s conduct post-bankruptcy and they were therefore entitled to continue
litigating their Ignition Switch Action. I ruled against the Phaneuf Plaintiffs, finding that
it made sense to address common issues at one time. I initially issued an oral ruling,
stating, among other things:
[T]he sale order now applies, though it’s possible,
without prejudging any issues, that, after I hear
from the other 87 litigants, I might ultimately rule
that it does not apply to some kinds of claims and
that, even if the sale order didn’t apply, that New
GM would be entitled to a preliminary injunction
temporarily staying the Phaneuf plaintiffs’ action
from going forward, pending a determination by me
on the other 87 litigants’ claims under the standards
articulated by the circuit in Jackson Dairy and its
progeny.6
4 	ECF No. 12764.
5 	ECF No. 12770.
6 	Hrg. Tr. 91:12-21, July 2, 2014.
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I subsequently entered a written decision memorializing the Phaneuf oral ruling.7
After ruling on the Phaneuf No Stay Pleading, I had to address nearly identical
contentions with respect to the Elliott No Stay Pleading. Additionally, however, the
Elliott Plaintiffs surprisingly claimed that this Court did not have subject matter
jurisdiction over the Motion to Enforce, focusing nearly entirely on the “related to” prong
of 28 U.S.C. § 1334. In my second written decision, dealing with the Elliott Plaintiffs’
claims, I stated:
Once again, a plaintiff group wishing to proceed
ahead of all of the others (only one week after I
issued the written opinion memorializing my earlier
oral ruling proscribing such an effort) has asked for
leave to go it alone. Its request is denied. With a
single exception, the issues raised by this group (the
“Elliott Plaintiffs”) don’t differ from those
addressed in Phaneuf. And as to that single
exception—their claim that I don’t have subject
matter jurisdiction to construe and enforce the Sale
Order in this case—their contention is
frivolous . . . .8
I noted that bankruptcy courts “have subject matter jurisdiction to enforce their orders in
bankruptcy cases and proceedings under those courts’ ‘arising in’ jurisdiction.”9 I
continued:
As in Phaneuf, I find that the Elliott Plaintiffs are
asserting claims with respect to vehicles that were
manufactured before the 363 Sale, and, although to
a lesser extent than in Phaneuf, relying on conduct
of Old GM. Thus I find as a fact, or mixed question
of fact and law, that the threshold applicability of
the Sale Order—and its injunctive provisions—has
been established in the first instance.
7 	See Phaneuf, n.1 above.
8 	Elliott, 514 B.R. at 379 (bolding and italics in original).
9 	Id. at 381.
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And once again, even if the Sale Order did not
apply in the first instance, a preliminary injunction
would also be appropriate here, for the reasons
discussed at length in Phaneuf, which I will not
repeat at comparable length here—other than to say
that the prejudice to all of the other litigants, and to
the case management concerns I had with respect to
the Phaneuf Plaintiffs, is just as much a matter of
concern here.
As in Phaneuf, I will not allow the Elliott Plaintiffs
to go it alone. The Elliott Plaintiffs’ claims can be
satisfactorily addressed—and will have to be
addressed—as part of the coordinated proceedings
otherwise pending before me.10
Peller, the same counsel whose contentions I rejected in Elliott, filed the Sesay
Plaintiffs’ Ignition Switch Action on August 1, 2014. He sued on behalf of a class of
people “who, since the inception of [New] GM in October 2009, hold or have held a legal
or equitable interest in a GM vehicle with a dangerous ignition switch or steering
hazard.”11 The Sesay Plaintiffs’ allegations concerned model years ranging from 2003 to
2011—addressing, significantly, both Old GM and New GM vehicles, and bringing their
claims within the express coverage of the Sale Order.
The Sesay Plaintiffs filed their action in the Southern District of New York and
designated it as related to MDL 2543.12 Upon learning of their filing, New GM advised
the Sesay Plaintiffs’ counsel Peller that his action was covered under the Sale Order,
enjoined under it, and subject to the Motion to Enforce. On August 7, New GM sent
10 	Id. at 383-84.
11 	Sesay Amended Cmplt. ¶ 41.
12 	After a decision of the Judicial Panel on Multidistrict Litigation, see In re Gen. Motors LLC
Ignition Switch Litig., --- F.Supp.2d ---, 2014 U.S. Dist. LEXIS 79713, 2014 WL 2616819 (Jud.
Panel on Multidistrict Litig. Jun. 9, 2014), the Ignition Switch Actions were consolidated for
coordinated pretrial purposes, under 28 U.S.C. § 1407, and transferred to the Southern District of
New York, where they are now pending before the Hon. Jesse Furman in that court. See In re:
Gen. Motors LLC Ignition Switch Litig., 1:14-md-02543-JMF.
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Peller the Scheduling Order, the Supplemental Scheduling Order, the Stay Procedures
Order, and a form stay stipulation. The next day, Peller advised that he was unwilling to
enter into the proffered stay stipulation. Instead, he wrote New GM seeking additional
time to file a No Stay Pleading. The previously agreed on schedule had provided that the
Sesay Plaintiffs must file a No Stay Pleading by August 12, but New GM agreed to
extend the deadline to August 19, if Peller thought that his pleading could meet
Fed.R.Bankr.P. Rule 9011 standards.
Peller then filed another No Stay Pleading, arguing, once again, that the
bankruptcy court lacks subject matter jurisdiction over the Motion to Enforce—
notwithstanding my express rulings to the contrary in Elliott—and also making a number
of other contentions, addressed below.
Discussion
The Sesay Plaintiffs’ submission is an amalgam of efforts to raise, once again,
contentions I already considered and rejected, and efforts to raise new points. Though
without lengthy discussion of matters I’ve already ruled on, I consider them in turn.
1. Subject Matter Jurisdiction.
Once again, the Sesay Plaintiffs’ counsel argues, as he did in Elliott, that I lack
subject matter jurisdiction to hear the Motion to Enforce. This contention, as I held in
Elliott (and which also is now the law of the case), is frivolous.13 Federal judges,
13 	As I already addressed the same contention in Elliott, Peller should have known better—
particularly since he admitted that the action here is “not distinguishable from the Elliott v. GM
matter that the Court has already considered.” Sesay Pl. No Stay Pleading at 22. If Peller wanted
to raise his subject matter jurisdiction contentions merely as a placeholder, as against the
possibility (which I regard as unlikely) that Elliott might be reversed on appeal, he should have
said so. I had previously cautioned Peller to file pleadings only if they would meet Rule 9011
standards, and it is highly likely, if not certain, that his subject matter jurisdiction contentions here
do not. And after filing the Sesay Plaintiffs’ No Stay Pleading, Peller filed still another, for the
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including bankruptcy judges, have subject matter jurisdiction to enforce their own
orders.14 In the bankruptcy sphere, where the court less commonly has federal question
or diversity jurisdiction under 28 U.S.C. § 1331 or 1332, the court’s subject matter
jurisdiction rests on the Judicial Code’s bankruptcy subject matter jurisdiction provision,
28 U.S.C. § 1334, and in particular its “arising in” prong.15 It has been repeatedly held
that bankruptcy judges have “arising in” jurisdiction to construe and enforce orders they
had earlier signed.16
As I observed in Elliott, the Sesay Plaintiffs’ continued focus on the “related to”
prong of § 1334, inexplicably still pressed here,17 misses the point.18 It is the “arising in”
prong of § 1334 upon which district and bankruptcy judges’ subject matter jurisdiction
rests.
Nor is it an answer for the Sesay Plaintiffs to contend that because they believe
their claims, in whole or in part, should not be found to be covered by my earlier order, or
my earlier order should not have said what it did or was invalid, my subject matter
Bledsoe Plaintiffs, making the same contentions once again, and also covering two of the Elliott
Plaintiffs, with respect to whom I had already ruled.
This has got to stop. Peller is now on notice that further conduct of this character may subject him
to a Martin-Trigona order, sanctions, or both. And though I would prefer to spend no more time
on Peller’s repeated filings, turning instead to the much more important issues in this case and the
others on my watch, New GM’s rights to seek a finding of contempt with respect to his past and
any future conduct are reserved.
14 	See, e.g., Travelers Indem. Co. v. Bailey, 557 U.S. 137, 151 (2009) (“Travelers”) (“[T]he only
question left is whether the Bankruptcy Court had subject-matter jurisdiction to enter the
Clarifying Order. The answer here is easy: as the Second Circuit recognized, and respondents do
not dispute, the Bankruptcy Court plainly had jurisdiction to interpret and enforce its own prior
orders.”); Elliott, 514 B.R. at 379-380 & nn.4-9, and cases there cited.
15 	See Elliott, 514 B.R. at 379 & nn.6-7, 381 & n.12.
16 	See, e.g., Lothian Cassidy, LLC v. Lothian Exploration & Dev. II, L.P., 487 B.R. 158, 162
(S.D.N.Y. 2013) (Marrero, J.) (“Lothian Cassidy”) (“‘Arising in’ claims may include ‘[m]atters
involving the enforcement or construction of a bankruptcy court order . . . .’”); Elliott, 514 B.R. at
380 n.8, 381-82 (same, citing, among many other authorities, Lothian Cassidy.)
17 	Sesay Pl. No Stay Pleading at 12 et seq.
18 	Elliott, 514 B.R. at 381.
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jurisdiction to decide those issues evaporates. As in Elliott,19 each contention assumes
the fact to be decided. Despite the Sesay Plaintiffs’ efforts to recast the issues, and to
discuss other issues not at all relevant, the simple fact is that New GM seeks construction
and enforcement of the Sale Order, and I have subject matter jurisdiction to do exactly
that.
2. Alleged Denial of Due Process
As the first of their new contentions, the Sesay Plaintiffs then seek to be excused
from the briefing arrangements applicable to everyone else because they received “no
effective notice,” nor any “reasonable opportunity to be heard,” before entry of the Sale
Order.20 But assuming that to be true, it is equally true with respect to all or nearly all of
the parties in the other 100 or more cases. The relevance of that, to the ultimate
enforceability of the Sale Order, is a matter that everyone else is now in the process of
briefing. But it is not a basis for the Sesay Plaintiffs’ efforts to be excused from the
ongoing processes to make that determination.
The issues associated with the underlying matters that the other parties are
briefing, and that apply to the Sesay Plaintiffs as well—whether appropriate notice was
given in 2009, and, if not, what the consequence should be—are serious ones. But they
are not amenable to the “one-off” analysis the Sesay Plaintiffs would prefer. The Sesay
Plaintiffs are now covered, at least in material part, by the Sale Order. And under
familiar principles,21 until it is determined that the Sale Order does not apply, or should
19 	Id. at 382.
20 	Sesay Pl. No Stay Pleading at 29.
21 	See, e.g., Celotex Corp. v. Edwards, 514 U.S. 300, 306 (1995) (“[P]ersons subject to an injunctive
order issued by a court with jurisdiction are expected to obey that decree until it is modified or
reversed, even if they have proper grounds to object to the order.”).
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be invalidated, in whole or in part, they must abide by it, until I or a higher court rule
otherwise.
3. Preliminary Injunction
New GM earlier made the point, with which I agreed in each of Phaneuf and
Elliott,22 that litigants with vehicles and parts manufactured before the 363 Sale were
already bound by the Sale Order. But I additionally found, in each of Phaneuf and
Elliott,23 that New GM could also satisfy the requirements for a preliminary injunction
barring the plaintiffs in those actions from proceeding with their suits until I addressed
the issues with respect to all of the other plaintiff groups at the time. The Sesay Plaintiffs
next ask me to revisit the latter conclusion. This too is an effort to cause me to revisit
matters that I have already decided, and that are now law of the case. The Sesay
Plaintiffs have brought nothing to my attention that I previously overlooked, and there is
no basis for me to modify my earlier rulings in this regard.
4. Scheduling, Procedure & “Consolidation”
The Sesay Plaintiffs further make a number of procedural contentions, objecting
to the three business days within which they were originally required to file a No Stay
Pleading;24 to the procedural context in which their concerns are being addressed
(without an adversary proceeding, and, in their view, without a contested matter); and to
22 	See Phaneuf, 513 B.R. at 478 (“Thus unless and until I rule, after hearing from counsel in the
other 87 Ignition Switch Actions, that I should not enforce the Sale Order, in whole or in part (or
that with respect to any particular matters, the Sale Order does not apply), the Phaneuf Plaintiffs
remain enjoined under it.”); Elliott, 514 B.R. at 383-84 (“As in Phaneuf, I find that the Elliott
Plaintiffs are asserting claims with respect to vehicles that were manufactured before the 363 Sale,
and, although to a lesser extent than in Phaneuf, relying on the conduct of Old GM. Thus I find as
a fact, or mixed question of fact and law, that the threshold applicability of the Sale Order—and its
injunctive provisions—has been established in the first instance.”).
23 	See Phaneuf, 513 B.R. at 470, 479-81; Elliott, 514 B.R. at 384.
24 	Sesay Pl. No Stay Pleading at 36.
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the “consolidation” of their issues with those of others similarly situated. None of these
has merit.
The first contention is a non-issue. While of course it is true that the Sesay
Plaintiffs were not consulted when the procedures were put in place under which parties
wishing to be exempted from the Sale Order would have to object (which procedures
included, among others, the 3-day time period for filing an objection), they were on
notice of the need to object, by a filing in this Court, going back at least to July 12 of this
year, when their counsel filed a nearly identical pleading for the Elliott Plaintiffs. And in
any event, New GM agreed to a substantially longer, 14-day, period for the Sesay
Plaintiffs to respond. Thus the Sesay Plaintiffs were never injured in fact by the original
3-day period of which they complain.
The second contention disregards the relevant facts. As New GM has repeatedly
pointed out, most recently in its response to the Sesay Plaintiffs’ motion,25 New GM is
not seeking any new injunction against them. It is simply seeking to enforce the
preexisting injunction set forth in the Sale Order, which covers Sesay Plaintiffs’ claims,
and which, at least at this juncture, remains in effect. Thus a separate adversary
proceeding is not required. And New GM did request enforcement of the Sale Order by
motion, filed on April 21, 2014. It thus ill suits the Sesay Plaintiffs to complain of the
absence of a separate motion addressed uniquely to them, when their counsel Peller
elected to disregard the existing injunction even when he was on notice of it. They are
fortunate that New GM did not move against them—and especially their counsel—for
contempt. What the Sesay Plaintiffs have been entitled to, on the Motion to Enforce, is
25 	New GM Response at 19.
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“reasonable notice and opportunity for hearing,”26 which they most assuredly will
receive.27
The third contention is likewise a non-issue. What the Sesay Plaintiffs call a “de
facto consolidation”28 is nothing more than consideration of identical and similar issues
in a coordinated way, which Article III and Article I federal judges routinely do. The
Sesay Plaintiffs are entitled to individualized consideration of any arguments they might
put forward that weren’t satisfactorily presented by others, and they will have that, to the
extent necessary, in the proceedings that follow.
5. Abstention
Finally, the Sesay Plaintiffs, invoking the doctrine of discretionary abstention,
codified in 28 U.S.C. § 1334(c)29 and fleshed out in caselaw (but wholly failing to
address in their No Stay Pleading the enumerated considerations that inform decisions as
26 	Fed. R. Bankr. P. 9014(a).
27 	Nor does it matter who has the burden of persuasion on the applicability of a continuing stay,
another matter the Sesay Plaintiffs argue. Sesay Pl. No Stay Pleading at 37. Though the briefing
now in process may persuade me that I should not enforce the existing injunction, or that I should
limit its applicability, the Sesay Plaintiffs are now enjoined under the Sale Order, and the issues
before me are not close enough to present a case where the burden of persuasion would matter.
28 	Sesay Pl. No Stay Pleading at 37.
29 	With an exception not applicable here, the discretionary abstention provision provides:
(c)(1) Except with respect to a case under chapter 15 of title
11, nothing in this section prevents a district court in the
interest of justice, or in the interest of comity with State courts
or respect for State law, from abstaining from hearing a
particular proceeding arising under title 11 or arising in or
related to a case under title 11.
Mandatory abstention is addressed in a separate subsection, § 1334(c)(2,), but the Sesay Plaintiffs
understandably do not contend that mandatory abstention would be applicable here.
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to discretionary abstention),30 ask me to abstain from considering whether the Sale Order
should continue to apply to them. In the exercise of my discretion, I decline to do so.
Discretionary abstention, as its name implies, is within the discretion of the court
that is asked to abstain. The factors relevant to exercising that discretion were listed by
Judge Drain in Portrait Corp, and by me in GM-Trusky, as:
1. The effect or lack thereof on the efficient
administration of the bankruptcy estate if the court
recommends abstention;
2. The extent to which issues of non-
bankruptcy law predominate over bankruptcy
issues;
3. The difficulty or unsettled nature of the
applicable non-bankruptcy law;
4. The presence of a related proceeding
commenced in state court or other non-bankruptcy
court;
5. The jurisdictional basis, if any, other than
28 U.S.C. § 1334;
6. The degree of relatedness or remoteness
of the proceeding to the main bankruptcy case;
7. The substance rather than form of an
asserted “core” proceeding;
8. The feasibility of severing non-
bankruptcy law claims from core bankruptcy
matters to allow judgments to be entered in non-
bankruptcy court with enforcement left to the
bankruptcy court;
9. The burden of the bankruptcy court’s
docket;
30 	Oddly, the Sesay Plaintiffs’ counsel did so in connection with a similar motion he filed on behalf
of the Elliott Plaintiffs. Both abstention requests are being denied today, for the reasons set forth
in this decision.
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10. The likelihood that the commencement
of the proceeding in a bankruptcy court involves
forum shopping by one of the parties;
11. The existence of a right to a jury trial;
and
12. The presence in the proceeding of
nondebtor parties.31
Each of Judge Drain and I has recognized that “federal courts should be sparing in
the exercise of discretionary abstention.”32 Each of us has likewise recognized,
nevertheless, that “in appropriate cases they should abstain.”33
But for the reasons discussed below, this is hardly an appropriate case. New GM
asks me to construe and enforce an order I previously entered. The Sesay Plaintiffs’
action is one of over 100 involving that issue. The abstention issue, of course, is not
whether I should abstain from hearing the Sesay Plaintiffs’ underlying claims (which,
unless they were assertable against Old GM, would be heard by a federal tribunal
elsewhere, to the extent I would later decide that the Sesay Plaintiffs can still assert them
notwithstanding the Sale Order), but whether I should abstain from a request to construe
and enforce my earlier order.34 That is not at all a difficult question.
31 	In re Portrait Corp. of Am., Inc., 406 B.R. 637, 641-42 (Bankr. S.D.N.Y. 2009) (Drain, J.)
(“Portrait Corp.”); Trusky v. Gen. Motors Co. (In re Motors Liquidation Co.), 2013 Bankr. LEXIS
620, at *28-29, 2013 WL 620281, at *10 (Bankr. S.D.N.Y. Feb. 19, 2013) (Gerber, J.) (“GM–
Trusky”).
32 	Portrait Corp., 406 B.R. at 641; GM-Trusky, 2013 Bankr. LEXIS 620, at *29, 2013 WL 620281,
at *10.
33 	Portrait Corp., 406 B.R. at 641; GM-Trusky, 2013 Bankr. LEXIS 620, at *29, 2013 WL 620281,
at *10.
34 	Though the Sesay Plaintiffs are vague in addressing who would construe and enforce my earlier
order if I were to abstain, they seem to imply that it would be done, if by anyone, by Judge
Furman, the district judge before whom they filed their action in violation of my earlier order. See
Sesay Pl. No Stay Pleading at 39.
While § 1334(c)(1) speaks of interests of comity with state courts and respect for state law, it now
is well established, by caselaw, that just as a bankruptcy court can abstain in favor of a state court,
it can do likewise in favor of another federal court. See, e.g., Portrait Corp., 406 B.R. at 639, 643;
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To decide the matter, I consider, as I did in GM-Trusky, the applicable factors.
Factor #1:
Effect on Efficient Administration of Estate
In the strictest sense, the “estate” is that of Old GM, and this matter principally
involves New GM. But in every other respect, the “effect on efficient administration” of
matters on my watch is obvious, and it overwhelmingly favors a decision not to abstain. I
have before me over 100 actions presenting identical issues—the construction, and
enforceability, of a Sale Order that I personally entered. With respect to those many
actions, the opening brief on the Threshold Issues has just been filed.35 The notion of
having those issues in over 100 of those actions decided by me, and those in a single
action decided by another judge (especially where that other judge lacks my familiarity
with the Sale Order and circumstances surrounding its entry), can hardly be considered to
be in any way “efficient.”
These considerations all strongly call for a decision not to abstain.
Factor #2:
Extent to Which Issues of Non-Bankruptcy Law
Predominate Over Bankruptcy Issues
This controversy is all about bankruptcy law—what a federal bankruptcy order
provided; what it might have provided or should have provided; what kind of notice
should have been provided before the earlier bankruptcy order was entered; and what we
should do, as a matter of federal bankruptcy law, if there were any deficiencies in those
GM-Trusky, 2013 Bankr. LEXIS 620, at *28, 2013 WL 620281, at *10. Thus abstention is
theoretically possible. But as each of Judge Drain held in Portrait Corp. and I held in GM-Trusky,
abstention is appropriate, in favor of state and federal courts alike, where such is “in the interest of
justice.” Id. Whether it could possibly be in the “interest of justice” to facilitate, by abstention,
the continued prosecution of an action knowingly brought in violation of a bankruptcy court order
is a matter that is addressed in the discussion of abstention doctrine factors to follow.
35 	See ECF No. 12981.
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respects. Though bankruptcy courts, like other federal courts, consider other issues or
aspects of federal law (such as requirements of due process) in considering matters of the
character of those here, those issues are a subset of the larger array of issues, which
principally involve bankruptcy law. This case is diametrically opposite from those
historically warranting discretionary abstention, such as those predominantly involving
state law or even federal nonbankruptcy law (such as labor law, ERISA law, or
environmental law) where the non-bankruptcy law issues are difficult, or where
bankruptcy judges lack comparable expertise.
This factor strongly calls for a decision not to abstain.
Factor #3:
Difficulty or Unsettled Nature of
the Applicable Non-bankruptcy Law
The non-bankruptcy law here—principally, constitutional law with respect to due
process, as applied in bankruptcy cases and to bankruptcy orders—is one which
bankruptcy judges consider repeatedly. And while difficult issues plainly exist in this
area, bankruptcy judges deal with them at least as often, and probably more often, than
nonbankruptcy judges do. So while Factor #3 not uncommonly calls for decisions to
abstain, it here does not weigh in favor of such a result, and in fact calls for a decision not
to abstain.
Conversely, it is the bankruptcy issues (and mixed issues of bankruptcy law and
constitutional law) that here are the difficult ones. If we look at the issues from a broad
perspective, the typical bankruptcy judge would normally have more familiarity with
such bankruptcy issues than the typical nonbankruptcy judge. And with a more focused
perspective, considering my personal familiarity with them, that is particularly true. Here
I have more than 40 years of experience in bankruptcy law. And I have more familiarity
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than any other judge with the circumstances leading up to the entry of the Sale Order, and
its underlying intent. Respectfully, I have considerably more tools to decide the relevant
issues than any other judge might.
The latter concerns strongly call for a decision not to abstain.
Factors #4 and 10:
Presence of Related Proceeding
Forum Shopping
Here there is another proceeding—though not one involving the construction of
the Sale Order. The other proceeding is one on the merits of claims that the Sesay
Plaintiffs wish to assert, which Peller, while on notice of my earlier injunction, brought
anyway, in knowing disregard of an order of this Court. Rather than asking for relief
from the earlier order, he disregarded it. Rewarding such conduct is hardly in the
interests of justice.
Peller says, remarkably, that:
This Court should decline to exercise jurisdiction it
may believe it has over the Sesay lawsuit because
the federal Court before which the Sesay lawsuit is
pending has indicated that Plaintiffs may commence
prosecuting their claims before that Court despite
any stay stipulation they many [sic.] have entered or
this Court may have purported to impose.36
But this Court’s Sale Order did not “purport[]” to impose anything. It did impose
an unequivocal injunction against litigation against New GM involving vehicles
manufactured by Old GM or involving Old GM parts. Whether I should relieve the
Sesay Plaintiffs or others from that injunction is a matter that the plaintiffs in over 100
36 	Sesay Pl. No Stay Pleading at 39.
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other actions are litigating by the rules. Why I should abstain in favor of an action that
the Sesay Plaintiffs brought in knowing violation of that injunction is a mystery.
New GM’s request for construction and enforcement of the Sale Order, sought in
the same court that entered the order, is hardly forum shopping. Rather it is the Sesay
Plaintiffs’ effort to litigate in another forum, rather than by seeking a ruling from the
Court that enjoined them, that is in fact forum shopping—seeking benefits from their
disregard of my earlier order, to secure rulings from a judge who, by definition, lacks
comparable familiarity with the prior proceedings in this Court, and the legal and factual
contexts in which they took place.
Matters get worse still when the Sesay Plaintiffs mischaracterize Judge Furman’s
order. It allowed nothing more than the filing of a complaint. It did not in any way take
issues away from me. Nor did it express the view that a nonbankruptcy court could
decide the matters pending before me better than I could. The situation here is very much
like the situation I encountered in GM-Trusky, where I concluded that I should construe
my own order. It was only after doing so that I transferred the remainder of the
controversy to a Michigan district judge who could decide the remaining issues as well as
I could.
These considerations all call, strongly, for a decision not to abstain.
Factors #5, #6, and #7:
Jurisdictional Basis
Relatedness to Main Bankruptcy Case
Core Proceeding/Constitutional Authority to Decide
We have been through this before. The jurisdictional basis for the matters before
me is the “arising in” prong of 28 U.S.C. § 1334, which vests district courts (and hence
bankruptcy courts) with subject matter jurisdiction over matters important to bankruptcy
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administration. As noted above and in Elliott, New GM’s motion invokes authority as
high as the United States Supreme Court and the Second Circuit recognizing the subject
matter jurisdiction of bankruptcy judges to construe and enforce their earlier orders.
The issues before me also are closely related to the main bankruptcy case. Once
again, they arise with respect to the construction and enforcement of an order entered in
the main bankruptcy case. They also affect needs and concerns of creditors of Old GM,
who might legitimately fear that to the extent I rule that Ignition Switch Actions
plaintiffs’ claims may not be asserted against New GM, they should nevertheless be
assertable against somebody—with the most likely candidate being the Old GM estate. It
was for exactly that reason that I gave the GUC Trust and Old GM creditors the right to
appear and be heard on the Motion to Enforce. A nonbankruptcy court might grant them
the same standing, but it is more obviously appropriate in proceedings before me.
Earlier caselaw before Stern v. Marshall37 had spoken in terms of whether or not
the abstention request was made in connection with a “core proceeding.” After Stern,
many bankruptcy judges (and I am one of them) consider the more important concern to
be our constitutional authority to enter a final order with respect to the matter before the
bankruptcy court. New GM’s Motion to Enforce—seeking enforcement of a sale order
entered in connection with a section 363 sale—is indeed a “core matter” by statute, under
28 U.S.C. §§ 157(b)(2)(A),38 (N),39 and (O).40 But more fundamentally, it is a matter
37 	131 S.Ct. 2594 (2011) (“Stern”).
38 	“[M]atters concerning the administration of the estate.”
39 	“[O]rders approving the sale of property other than property resulting from claims brought by the
estate against persons who have not filed claims against the estate.”
40 	“[O]ther proceedings affecting the liquidation of the assets of the estate . . .”, i.e., the assets of the
estate that were sold in exchange for cash and New GM stock incident to the 363 Sale, under the
Sale Order New GM now wishes to enforce.
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which bankruptcy judges have the constitutional power to decide and enter final orders,
in furtherance of their in rem jurisdiction, as my earlier order authorizing the sale of
property then owned by Old GM likewise was.
The construction and enforcement of bankruptcy court orders—however the chips
might ultimately fall when the bankruptcy judge is asked to do so—is important to the
bankruptcy system. That systemic concern, reinforced by the relatedness of the Sale
Order to this case (each as relevant to Factors #5 and #6), calls for a decision not to
abstain. The third factor, relating to the existence of a “core” matter and constitutional
authority, does not necessarily suggest a decision not to abstain. But it does not favor the
opposite conclusion either. (It applies most commonly when the bankruptcy court lacks
the ability to enter a final order with respect to the matter in question, a concern that is
not applicable here.) Effectively, it is a wash.
Factor #8
Feasibility of Severing Non-Bankruptcy Claims
This factor applies in instances where it is practical, and advisable, to sever non-
bankruptcy claims and have them decided somewhere else. It is not applicable here.
Effectively, then, it is a wash.
Factor #9
Burden of Bankruptcy Court’s Docket
I am indeed burdened; the General Motors case is only one of many major
matters on my watch. Nevertheless, I have the responsibility to do my job. My
responsibilities include construing and enforcing my earlier orders (and, to the extent
applicable, determining any limits on their enforceability), and I will be doing just that,
with respect to all of the 100 or more cases presenting identical or nearly identical issues,
in any event. Other than by reason of the need to rule on repeated filings that, after my
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earlier rulings, should never have been brought, I will suffer no material incremental
burden in considering the Motion to Enforce with respect to the Sesay Plaintiffs here.
Factor #9 applies when the court asked to abstain is heavily burdened and another
court might hear the controversy just as well. Under the facts here, this factor does not
call for a decision not to abstain, but it does not favor abstention either. Once again, it is
a wash.
Factor #11
Right to Jury Trial
No court would hold a jury trial on the enforcement or construction of the Sale
Order at issue here. Thus, while bankruptcy judges may conduct jury trials only under
limited circumstances and with litigant consent, this factor has no relevance here.
Factor #11 applies when a litigant has a right to a jury trial and the bankruptcy
court could not conduct one. Here, because no litigant has such a right, this factor does
not apply. Under the facts here, this factor does not call for a decision not to abstain, but
it does not favor abstention either. Once again, it is a wash.
Factor #12
Presence of Nondebtor Parties
Factor #12 is sometimes misunderstood because of the breadth of the language by
which it is described. Factor #12 applies when the bankruptcy court, by reason of the
presence of nondebtor parties, might have practical or constitutional limitations in
providing full relief. It also may apply when the needs and concerns of the particular
parties involved are too divorced from the matters properly before the bankruptcy court.
Here, all of the parties are “nondebtor parties,” but they share important needs and
concerns with respect to the bankruptcy court’s determination of what the Sale Order
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covers and what it does not, and whether and how it should be enforced in light of
Ignition Switch Actions plaintiffs’ concerns.
Under the facts here, this factor does not call for a decision not to abstain, but it
does not favor abstention either. Once again, it is a wash.
* * *
Some of these factors do not materially affect the abstention decision one way or
another. But not a single one of them suggests a decision to abstain. And those that are
applicable overwhelmingly suggest the decision not to abstain.
The Sesay Plaintiffs’ motion to abstain is denied.
Conclusion
For the reasons stated above, the Sesay Plaintiffs’ action will be stayed along with
the others. They may, of course, proceed with their litigation to the extent that I later
rule, with respect to all 100 plus actions, that the Sale Order does not bar any of their
claims. But they cannot do so now.
New GM is to settle an order consistent with these rulings.
Dated: New York, New York 	s/Robert E. Gerber
November 10, 2014 	United States Bankruptcy Judge
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