Free Memorandum and Order - District Court of Delaware - Delaware

' Case 1 :O8—cv—OOO23-G|V|S—IV|PT Document 9 Filed O1/O4/2008 Page 1 of 3
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
EQUISTAR CHEMICALS, LP, §
Plaintiff, g
VS. § CIVIL ACTION NO. H-07-3378
RELIANT ENERGY POWER g
GENERATION, INC., et al, §
Defendants. g
MEMORANDUM A ND ORDER
I.
Before the Court are the plaintiff, Equistar Chemicals, L.P.'s, motion for remand for lack
of subject matter jurisdiction, or for mandatory abstention and remand, pursuant to 28 U.S.C. §
l334(c)(2) and 28 U.S.C. §l452 (#3) and the defendants, Reliant Energy Power Generation, Inc.,
and Reliant Energy, Inc.'s response. As well, the defendants have filed under a separate
L document, their motion to transfer this case to the United States District Court for the Southern
District of Delaware to be referred to the Bankruptcy Court (#4). The Court has reviewed the
motions and attachments and determines that the defendants' motion to transfer should be
granted, and that the plaintiffs motion for remand, for lack of subject matter jurisdiction, should
be deferred to the Bankruptcy Court of Delaware.
II.
The Court is informed, by way of background, that the plaintiff and a non-party to this
suit, Reliant Energy Channelview, L.P., ("REC, L.P."), are parties to a series of contractual
agreements whereby REC, LP is obligated to sell to the plaintiff, among other things, steam for
use in its chemical plant. In turn, REC, LP was to purchase water from the plaintiff for use in its
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cogeneration facility. Several of these agreements are still in effect. However, the plaintiff is
concerned that REC, LP will not be able to fulfill its obligations under the contracts because it
recently tiled for bankruptcy in the Bankruptcy Court in Delaware. The plaintiffs anxiety
precipitated this suit against Reliant Power and Reliant Energy, non-parties in the REC, LP's
bankruptcy.
The undisputed facts reveal that Reliant Energy is owner of Reliant Power. Reliant
Power, in turn, owns the general and limited partner that own REC, LP. It is the plaintiffs
contention that Reliant Energy and Reliant Power are interested in selling their ownership
interests in the general and limited partners. The record shows that the general and limited
partners followed REC, LP into bankruptcy. The plaintiffs fear is that the defendants will
structure the sale of their interest in the partners in such a manner as to interfere with Reliant
Power's contractual duties to the plaintiff and the plaintiffs contractual rights with REC, LP.
Hence, the plaintiff seeks injunctive relief and such other relief as would permit the plaintiff to
gg exercise its right of consent to any sale in order to insure that the buyer is a "qualified" buyer.
The defendants contend that Reliant Energy has no contractual relationship with the
plaintiff. In addition, the defendants point out that Reliant Power's contractual relationship with
the plaintiff ended in June of 2002, when the cogeneration facility began commercial operation.
Instead of granting the relief sought by the plaintiff, the defendants enjoins the Court to retain the
case under either its "relate to" or "arising under" jurisdiction pursuant to 28 U.S.C. § 1334, or
transfer the case to the Bankruptcy Court in Delaware because it is, at heart, a "core proceeding."
See 28 U.S.C. §l57(b)(l).
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III.
The Court is of the opinion that the relationship between the defendants and the debtors
in bankruptcy is such that a decision by this Court, particularly the request for injunctive relief,
will ultimately impact bankruptcy proceeding. See In re Stonebridge, Techs, Inc., 430 F .3d 260
(5th Cir. 2005). In the case at bar, it camrot be said that the outcome of this case will not impact
the nature and type of resolution that the debtors, the trustee in bankruptcy and the creditors
might reach in the handling and administration of the bankrupt estate(s). [al at 260. In order to
avoid a result that might adversely impact the estate(s), the Court need not determine the issue of
jurisdiction, or the merits of the plaintiffs claims. The Bankruptcy Court is fully prepared to
determine its own jurisdiction and, should it determine that the matter is not a "core proceeding,"
is free to remand the case to state court.
Therefore, to promote judicial economy and the efficient administration of the debtor's
estate(s), the Court TRANSFERS this case, pursuant to 28 U.S.C. §1412, to the District of
g Delaware to be referred to the appropriate Bankruptcy Court, under Cause No. 07-11160 3
(MFW), without prejudice to the plaintiffs motion for remand.
It is so Ordered.
SIGNED this 4th day of January, 2008.

United States District Judge
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