In re:

STEWART PETROLEUM CO.,

Debtor.

Case No. A96-00795-DMD
Chapter 11

John Norman and his former law firms of Hartig, Rhodes, Norman, Mahoney & Edwards and Hartig, Rhodes, Hoge and Lekisch seek to “clarify” an order approving class 7(b) claims issued by this court on April 20, 1998. (See 5 ABR 376.) They seek a new order stating “SPC LLC shall not use allowance of the Class 7(b) claim for any purpose whatsoever in SPC LLC v. Norman, Case No. 3AN-02-03857 Civil, Superior Court for the State of Alaska.” I decline their request without prejudice.

In a memorandum regarding a motion to quash, I found that this court had jurisdiction over Mr. Norman’s motion. I did not address, however, whether that jurisdiction should be exercised. In my view, the interests of justice and comity with state courts will not be served by this court’s retention of jurisdiction. Piecemeal litigation of SPC LLC’s malpractice claim does not serve those interests. The state court can review Norman’s arguments and make its own decisions with regard to the use of the April 20, 1998 order. It is inappropriate for this court to intercede in that litigation.

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.

The Ninth Circuit has endorsed the factors set forth in In re Republic Reader's Service, Inc. ^1.

for determining the application of permissive abstention. ^2.

The Republic Reader's factors are:

(1) the effect or lack thereof on the efficient administration of the estate if a Court recommends abstention, (2) the extent to which state law issues predominate over bankruptcy issues, (3) the difficulty or unsettled nature of the applicable state law, (4) the presence of a related proceeding commenced in state court or other nonbankruptcy 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 state law claims from core bankruptcy matters to allow judgment to be entered in state court with enforcement left to the bankruptcy court, (9) the burden of my docket, (10) the likelihood that the commencement of the proceeding in 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. ^3.

Application of the factors here supports permissive abstention. I will address each of the factors in their numerical order. (1) Granting or denying the motion for clarification will have no effect on the administration of the bankruptcy

7 ABR 398
estate. The estate has been fully administered pursuant to a confirmed plan of reorganization. (2) State law issues predominate over bankruptcy issues. (3) The state law of malpractice is not necessarily difficult. Standing issues and Norman’s assertion of an in pari delicto defense raise mixed issues of state and federal law that are complex, but the state court is equally qualified to determine them. (4) There is a pending state court action, Stewart Petroleum Company, LLC v. John Norman, et al., now pending in the Superior Court for the State of Alaska, Third Judicial District at Anchorage, Case No. 3AN-02-3857. (5) There is no jurisdictional basis for John Norman's motion, other than 28 U.S.C. § 1334, for the issues Norman has raised to be determined by this court. (6) The motion raised by Norman is remote and unrelated to the main bankruptcy case. (7) The substance of this asserted “core” proceeding is an attempt by Mr. Norman to preclude the State superior court from determining the consequences of a bankruptcy court order. (8) Factor eight does not apply to this case. (9) My caseload would not be heavily burdened if this matter remained in this court. (10) In my view, there is a high likelihood that Norman's motion to this court involved forum shopping by him. (11) Both parties have asserted a right to a jury trial in the state court action. (12) All parties to the state court proceeding are non-debtor parties.

I conclude that the interests of justice and comity with state courts will be served by abstention. An order will be entered denying Mr. Norman's motion for clarification without prejudice.

2. Christensen v. Tucson Estates, Inc. (In re Tucson Estates, Inc.), 912 F.2d 1162 (9th Cir. 1990).