United States District Court, D. Maine
ROBERT J. KEACH, solely in his capacity as the chapter 11 trustee for MONTREAL, MAINE & ATLANTIC RAILWAY, LTD., et al. Plaintiff,
CANADIAN PACIFIC RAILWAY COMPANY, Defendant.
ORDER ON CANADIAN PACIFIC RAILWAY COMPANY'S
MOTION TO WITHDRAW THE REFERENCE
LEVY, U.S. DISTRICT JUDGE
cases arises from a July 6, 2013, train derailment and
explosion in Lac Mégantic, Quebec, as discussed in
greater detail in this court's orders in case number
1:16-cv-01001-JDL. Approximately one month after the
derailment, the operator of the train, Montreal, Maine &
Atlantic Railway (“MMA”) filed a chapter 11
bankruptcy proceeding in the U.S. Bankruptcy Court for the
District of Maine (“Bankruptcy Court”) (Bankr.
Case No. 13-10670), and simultaneously sought similar
protection in Canada.
January 2014, Robert Keach, then the chapter 11 trustee and
now the estate representative for the post-effective date
estate of MMA, filed a complaint in the Bankruptcy Court
commencing an action on behalf of MMA's estate against
parties that he contended were potentially responsible for
the derailment (the “Adversary Proceeding”).
Bankr. Case No. 14-01001. Canadian Pacific Railway Company
(“CP”) is the only remaining defendant in the
derailment also spawned litigation in Illinois and Texas,
with multiple plaintiffs asserting claims for negligence and
wrongful death against multiple defendants, all of whom
settled except for CP. The cases comprising the Illinois and
Texas litigation were ordered transferred to the District of
Maine pursuant to the authority established in 28 U.S.C.
§ 157(b)(5) and were later consolidated into one case
(the “Derailment Case”). See Case No.
2016, Keach filed a Motion to Intervene in the Derailment
Case pursuant to Federal Rule of Civil Procedure 24.
1:16-cv-01001-JDL, ECF No. 10. Keach argued, among other
things, that the MMA estate had a substantial interest in the
Derailment Case because the Bankruptcy Court's order
confirming the Trustee's plan of liquidation contained a
proportionate judgment reduction provision under which
CP's liability for the Lac Mégantic derailment
could be reduced by the comparative fault of MMA.
Id. at 8-9.
2016, CP filed a Motion to Withdraw the Reference of the
Adversary Proceeding for cause, pursuant to 28 U.S.C. §
157(d) and Federal Rule of Bankruptcy Procedure 5011(a). ECF
No. 1. CP argues that all six of the factors applied to a
“for cause” inquiry support withdrawal: (1)
judicial economy; (2) promotion of uniformity of bankruptcy
administration; (3) reduction of forum shopping and
confusion; (4) conservation of debtor and creditor resources;
(5) expedition of the bankruptcy process; and (6)
consideration of whether a jury trial has been requested.
Id. at 3 (citing Turner v. Boyle, 425 B.R.
20, 24 (D. Me. 2010)).
September 28, 2016, I granted CP's Amended Motion to
Dismiss the Derailment Case and denied the plaintiffs'
Motion for Leave to File a Second Amended Complaint, which
resulted in the dismissal of the Derailment Case.
1:16-cv-01001-JDL. I also denied as moot the Motion to
Intervene filed by Robert Keach as estate representative for
the post-effective date estate of MMA. Id.
the Derailment Case has been dismissed and the Motion to
Intervene denied, the factors listed above now weigh in favor
of denying CP's Motion to Withdraw the Reference (ECF No.
1). The Adversary Proceeding is the sole remaining case
related to the derailment and explosion in Lac
Mégantic, and therefore, there is no longer the risk
of overlapping or inconsistent results between the Adversary
Proceeding and the Derailment Case. Both judicial economy and
uniformity of bankruptcy administration are better promoted
by leaving the Adversary Proceeding in the Bankruptcy Court,
which has had jurisdiction over the matter since 2014. I
perceive no substantial risk of forum shopping or confusion
from this course of action. I also conclude that, given the
Bankruptcy Court's extensive involvement in presiding
over and managing the Adversary Proceeding thus far, it would
be more efficient in terms of the parties' resources and
the bankruptcy process generally to keep the case in the
Bankruptcy Court instead of transferring it to the District
Court. Finally, the dismissal of the Derailment Case means
that there is no longer a jury trial-eligible case pending in
the District Court, and therefore, this factor no longer
weighs in favor of withdrawal of the reference.
reasons explained above, CP's Motion to Withdraw the
Reference (ECF No. 1) is DENIED.
 For a list of individual case numbers,
see 1:16-cv-01001-JDL, ECF No. 1 at 1. The procedural history
is discussed in greater detail in this court's order
granting Canadian Pacific Railway Company's Amended