Free Answering Brief in Opposition - District Court of Delaware - Delaware

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE ) ) ) Oakwood Homes Corporation, et al., ) ) Debtors. _________________________________________ ) ) OHC Liquidation Trust, ) ) Plaintiff, ) ) v. ) ) Credit Suisse (f/k/a Credit Suisse First Boston, a ) Swiss banking corporation), Credit Suisse ) Securities (USA), LLC (f/k/a Credit Suisse First Boston LLC), Credit Suisse Holdings (USA), Inc. ) (f/k/a Credit Suisse First Boston, Inc.), and Credit ) Suisse (USA), Inc. (f/k/a Credit Suisse First Boston ) ) (U.S.A.), Inc.), the subsidiaries and affiliates of ) each, and Does 1 through 100, ) ) Defendants. ) In re: Chapter 11 Case No. 02-13396 (PJW) Jointly Administered

Civil Action No. 07-0799 (JJF)

Re: Civil Docket Nos. 30 & 31

ANSWERING BRIEF IN OPPOSITION TO DEFENDANTS' MOTION TO STRIKE PLAINTIFF'S JURY TRIAL DEMAND Tony Castañares (CA SBN 47564) Stephan M. Ray (CA SBN 89853) Scott H. Yun (CA SBN 185190) Whitman L. Holt (CA SBN 238198) STUTMAN, TREISTER & GLATT, P.C. 1901 Avenue of the Stars, 12th Floor Los Angeles, CA 90067 (310) 228-5600 -&Marla Rosoff Eskin (No. 2989) Kathleen Campbell Davis (No. 4229) Kathryn S. Keller (No. 4660) CAMPBELL & LEVINE, LLC 800 N. King Street, Suite 300 Wilmington, DE 19801 (302) 426-1900

Special Counsel for the OHC Liquidation Trust

Dated: February 19, 2008

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TABLE OF CONTENTS NATURE AND STAGE OF THE PROCEEDINGS ....................................................................... 1 SUMMARY OF ARGUMENT ........................................................................................................ 1 RELEVANT BACKGROUND FACTS........................................................................................... 5 1. 2. CSS's Proofs Of Claim And The Objection/Counterclaims. .................................... 5 Recent Proceedings Before Judge Walsh And This Court. ...................................... 6

ARGUMENT .................................................................................................................................... 8 A. THE MOTION TO STRIKE IS PLAGUED BY A MULTITUDE OF PROCEDURAL DEFECTS. .............................................................................. 8 1. 2. 3. 4. B. The Motion To Strike Is An Impermissible Collateral Attack On The Jury Trial Opinion. ............................................................... 9 The Jury Trial Opinion Represents "Law Of The Case." ........................... 11 The Motion To Strike Offends Fundamental Principles Of Issue Preclusion And Public Policy. ........................................................... 13 Even Under Defendants' "Reconsideration" Paradigm, The Motion To Strike Fails On Its Face............................................................. 15

PLAINTIFF HAS A BASIC CONSTITUTIONAL RIGHT TO A JURY TRIAL.......................................................................................................... 17 1. 2. A Jury Right Exists Where, As Here, Any "Legal" Claims Are Present Or "Legal" Relief Is Sought. ................................................... 19 Since Several Claims And Issues Are Logically Distinct From Allowance Of CSS's Proofs Of Claim, The "ClaimsAllowance Process" Is Not Implicated. ...................................................... 24 Controlling Case Law Rejects The Idea That Jury Rights Are Lost When Suits Are Brought In A Court Of Equity........................... 32 Contractual Jury Waivers Are Narrowly Construed; The Bankruptcy Court Properly Limited The One Before It. ............................ 35 To The Extent That The Court Considers This To Be A Close Question, It Should Err On The Side Of Protecting Plaintiff's Core Constitutional Rights. ........................................................ 39

3. 4. 5.

CONCLUSION ............................................................................................................................... 40
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TABLE OF AUTHORITIES CASES Aetna Ins. Co. v. Kennedy, 301 U.S. 389 (1937)....................................................................................................... 35, 37 Am. Universal Ins. Co. v. Pugh, 821 F.2d 1352 (9th Cir. 1987) ............................................................................................... 9 AP Indus., Inc. v. SN Phelps & Co. (In re AP Indus., Inc.), 117 B.R. 789 (Bankr. S.D.N.Y. 1990)............................................................................. 9, 10 Arizona v. California, 460 U.S. 605 (1983)............................................................................................................. 12 Balaber-Strauss v. N.Y. Tel. (In re Coin Phones, Inc.), 203 B.R. 184 (Bankr. S.D.N.Y. 1996)................................................................................. 21 Beacon Theatres, Inc. v. Westover, 359 U.S. 500 (1959)................................................................................................... 4, 17, 39 Billing v. Ravin, Greenberg & Zackin, P.A., 22 F.3d 1242 (3d Cir.), cert. denied, 513 U.S. 999 (1994)........................................... passim Brambles USA, Inc. v. Blocker, 735 F. Supp. 1239 (D. Del. 1990)........................................................................................ 16 Brown v. Citicorp USA, Inc. (In re FoxMeyer Corp.), No. 99-705, 1999 WL 33220040 (D. Del. Dec. 1, 1999) ................................................ 9, 11 CDX Liquidating Trust v. Venrock Assocs., No. 04-7236, 2007 U.S. Dist. LEXIS 41439 (N.D. Ill. June 4, 2007)........................... 12, 13 Cantor v. Perelman, No. 97-586, 2006 WL 318666 (D. Del. Feb. 10, 2006)....................................................... 23 Celotex Corp. v. Edwards, 514 U.S. 300 (1995)................................................................................................... 2, 10, 11 Chauffeurs, Teamsters & Helpers v. Terry, 494 U.S. 558 (1990)............................................................................................................. 17 Christianson v. Colt Indus. Operating Corp., 486 U.S. 800 (1988)............................................................................................................. 12 City of Monterey v. Del Monte Dunes, 526 U.S. 687 (1999)............................................................................................................. 19 City of New York v. Beretta U.S.A. Corp., 317 F. Supp. 2d 193 (E.D.N.Y. 2004) ................................................................................. 39

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Corzin v. Harvey (In re Commercial Maint. & Repair), No. 06-46, 2007 U.S. Dist. LEXIS 71408 (N.D. Ohio Sept. 25, 2007)................................. 9 In re Crown Vantage, Inc., No. 02-03836, 2002 U.S. Dist. LEXIS 26109 (N.D. Cal. Dec. 16, 2002)..................... 31, 33 Dairy Queen, Inc. v. Wood, 369 U.S. 469 (1962)...................................................................................................... passim Dastgheib v. Genentech, Inc., 457 F. Supp. 2d 536 (E.D. Pa. 2006) ................................................................................... 23 Design Strategies, Inc. v. Davis, 367 F. Supp. 2d 630 (S.D.N.Y. 2005).................................................................................. 21 Dietert v. Dietert (In re Dietert), 271 B.R. 499 (Bankr. S.D. Tex. 2002) ................................................................................ 26 Dimick v. Schiedt, 293 U.S. 474 (1935)............................................................................................................. 17 Donovan v. Robbins, 579 F. Supp. 817 (N.D. Ill. 1984) ........................................................................................ 19 Educ. Testing Servs. v. Katzman, 670 F. Supp. 1237 (D.N.J. 1987) ......................................................................................... 39 EEOC v. Blue Star Foods, Inc., No. 78-5-W, 1980 U.S. Dist. LEXIS 11131 (S.D. Iowa Mar. 7, 1980)............................... 39 EEOC v. Waffle House, Inc., 534 U.S. 279 (2002)............................................................................................................. 36 First Union Nat'l Bank v. United States, 164 F. Supp. 2d 660 (E.D. Pa. 2001) ............................................................................. 37, 38 In re Franklin Towne Lodge Ltd. P'ship, No. 91-2702, 1992 U.S. Dist. LEXIS 18817 (E.D. Pa. Nov. 25, 1992) .............................. 33 Germain v. Conn. Nat'l Bank, 988 F.2d 1323 (2d Cir. 1993)........................................................................................ passim In re Globe Parcel Serv., Inc., 75 B.R. 381 (E.D. Pa. 1987) ................................................................................................ 33 Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (1989)........................................................................................................ passim Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002)....................................................................................................... 21, 22 Grewe v. United States (In re Grewe), 4 F.3d 299 (4th Cir. 1993) ................................................................................................... 12
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Hamilton v. Leavy, 322 F.3d 776 (3d Cir. 2003)................................................................................................. 12 Hays v. Equitex, Inc. (In re RDM Sports Group), 260 B.R. 915 (Bankr. N.D. Ga. 2001) ..................................................................... 19, 21, 33 Henglein v. Colt Indus. Operating Corp., 260 F.3d 201 (3d Cir. 2001), cert. denied, 535 U.S. 955 (2002)......................................... 14 Hulsey v. West, 966 F.2d 579 (10th Cir. 1992) ............................................................................................. 36 Jean Alexander Cosmetics, Inc. v. L'Oreal USA, Inc., 458 F.3d 244 (3d Cir. 2006), cert. denied, 127 S. Ct. 1878 (2007) ............................... 13, 14 Jennings v. McCormick, 154 F.3d 542 (5th Cir. 1998) ............................................................................................... 35 Katchen v. Landy, 382 U.S. 323 (1966)............................................................................................................. 25 Langenkamp v. Culp, 498 U.S. 42 (1990)......................................................................................................... 25, 27 Lee Pharm. v. Mishler, 526 F.2d 1115 (2d Cir. 1975)............................................................................................... 39 Lee Way Holding Co. v. Liberty Mut. Ins. Co. (In re Lee Way Holding Co.), 118 B.R. 544 (Bankr. S.D. Ohio 1990).......................................................................... 30, 31 Lindsey v. Ipock, 732 F.2d 619 (8th Cir. 1984) ............................................................................................... 10 Liquidation Trust of Hechinger Inv. Co. v. Fleet Retail Fin. Group (In re Hechinger Inv. Co.), 327 B.R. 537 (D. Del. 2005)......................................................................................... passim In re L.T. Ruth Coal Co., 66 B.R. 753 (Bankr. E.D. Ky. 1986).................................................................................... 10 M&E Contractors v. Kugler-Morris Gen. Contractors, 67 B.R. 260 (N.D. Tex. 1986).............................................................................................. 33 Max's Seafood Cafe v. Quinteros, 176 F.3d 669 (3d Cir. 1999)................................................................................................... 3 McClelland v. Braverman Kaskey & Caprara, P.C. (In re McClelland), 332 B.R. 90 (Bankr. S.D.N.Y. 2005)............................................................................. 25, 29 Mertens v. Hewitt Assocs., 508 U.S. 248 (1993)............................................................................................................. 21 Metromedia Co. v. Fugazy, 983 F.2d 350 (2d Cir. 1992), cert. denied, 508 U.S. 952 (1993)......................................... 14
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Mirant Corp. v. Southern Co., 337 B.R. 107 (N.D. Tex. 2006)..................................................................................... passim Montana v. United States, 440 U.S. 147 (1979)............................................................................................................. 13 NDEP Corp. v. Handl-It, Inc. (In re NDEP Corp.), 203 B.R. 905 (D. Del. 1996)................................................................................................ 33 Nat'l Acceptance Co. v. Myca Prods., Inc., 381 F. Supp. 269 (W.D. Pa. 1974)................................................................................. 35, 37 Nichols Motorcycle Supply Inc. v. Dunlop Tire Corp., 913 F. Supp. 1088 (N.D. Ill. 1995) ...................................................................................... 37 Nisselson v. Empyrean Inv. Fund, L.P. (In re MarketXT Holdings Corp.), 336 B.R. 39 (Bankr. S.D.N.Y. 2006)................................................................................... 36 In re Nw. Cinema Corp., 49 B.R. 479 (Bankr. D. Minn. 1985) ................................................................................... 12 OHC Liquidation Trust v. Credit Suisse First Boston (In re Oakwood Homes Corp.), 340 B.R. 510 (Bankr. D. Del. 2006) ................................................................................ 5, 15 OHC Liquidation Trust v. Credit Suisse (In re Oakwood Homes Corp.), 378 B.R. 59 (Bankr. D. Del. 2007) ............................................................................... passim Official Comm. of Unsecured Creditors v. TSG Equity Fund L.P. (In re EnvisioNet Comput. Servs.), 276 B.R. 1 (D. Me. 2002) ...................................................................................................... 9 Official Comm. of Unsecured Creditors v. Clark (In re Nat'l Forge Co.), 326 B.R. 532 (W.D. Pa. 2005)....................................................................................... 15, 16 Paracor Fin., Inc. v. GE Capital Corp., 96 F.3d 1151 (9th Cir. 1996) ............................................................................................... 36 Parsons v. Bedford, 3 Pet. 433 (1830).................................................................................................................. 19 Pereira v. Farace, 413 F.3d 330 (2d Cir. 2005), cert. denied, 126 S. Ct. 2286 (2006) ............................... 21, 22 Pratt v. Ventas, Inc., 365 F.3d 514 (6th Cir. 2004) ........................................................................................... 9, 10 Prudential Oil Corp. v. Phillips Petrol. Co., 392 F. Supp. 1018 (S.D.N.Y. 1975)..................................................................................... 39 Reboy v. Cozzi Iron & Metal, Inc., 9 F.3d 1303 (7th Cir. 1993) ................................................................................................. 35

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Redmond v. Hassan (In re Hassan), 376 B.R. 1 (Bankr. D. Kan. 2007) ....................................................................................... 21 Rickel & Assocs., Inc. v. Smith (In re Rickel & Assocs., Inc.), 320 B.R. 513 (Bankr. S.D.N.Y. 2005)................................................................................. 33 Ross v. Bernhard, 396 U.S. 531 (1970)...................................................................................................... passim Seemann v. Nat'l Bank of Commerce, 112 F.2d 378 (5th Cir. 1940) ............................................................................................... 10 Shipley v. Orndoff, No. 04-1530, 2007 U.S. Dist. LEXIS 76462 (D. Del. Oct. 12, 2007) ................................. 16 Shubert v. Lucent Techs., Inc. (In re Winstar Commc'ns, Inc.), No. 04-928, 2004 WL 2713101 (D. Del. Nov. 16, 2004).................................................... 27 Simler v. Conner, 372 U.S. 221 (1963)............................................................................................................. 19 Southern Pac. Ry. Co. v. United States, 168 U.S. 1 (1897)................................................................................................................. 13 Stalford v. Blue Mack Transp. (In re Lands End Leasing), 193 B.R. 426 (Bankr. D.N.J. 1996) ..................................................................................... 21 Tracinda Corp. v. DaimlerChrysler AG, 502 F.3d 212 (3d Cir. 2007)................................................................................. 4, 35, 37, 38 Tray-Wrap, Inc. v. Six L's Packing Co., 984 F.2d 65 (2d Cir. 1993)................................................................................................... 33 Turner v. Johnson & Johnson, 809 F.2d 90 (1st Cir. 1986).................................................................................................. 39 United States v. McAlister, 630 F.2d 772 (10th Cir. 1980) ............................................................................................. 39 Urban Outfitters, Inc. v. 166 Enter. Corp., 136 F. Supp. 2d 273 (S.D.N.Y. 2001).................................................................................. 37 Valley Nat'l Bank v. Needler (In re Grantham Bros.), 922 F.2d 1438 (9th Cir. 1991) ............................................................................................. 11 Wakefern Food Corp. v. C&S Wholesale Grocers, Inc. (In re Big V Holding Corp.), No. 01-233, 2002 U.S. Dist. LEXIS 12609 (D. Del. July 11, 2002) ............................. 14, 15 West Elecs., Inc. v. Nat'l Union Fire Ins. Co. (In re West Elecs., Inc.), No. 91-3781, 1992 U.S. Dist. LEXIS 10957 (D.N.J. Jan. 9, 1992)..................................... 13 In re White Farm Equip. Co., 38 B.R. 718 (N.D. Ohio 1984)............................................................................................. 10
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Williams Elecs. Games, Inc. v. Garrity, 366 F.3d 569 (7th Cir. 2004) ............................................................................................... 23 XL Sports, Ltd. v. Lawler, No. 01-5363, 49 Fed. Appx. 13 (6th Cir. Oct. 8, 2002)....................................................... 12 STATUTES AND RULES 11 U.S.C. § 502(d) ........................................................................................................................... 27 11 U.S.C. § 541(a) ........................................................................................................................... 26 28 U.S.C. § 151............................................................................................................................ 2, 12 28 U.S.C. § 157(d) ............................................................................................................................. 7 28 U.S.C. § 157(e) ........................................................................................................................... 33 28 U.S.C. § 158...................................................................................................................... 8, 10, 11 FED. R. BANKR. P. 7013................................................................................................................... 26 FED. R. BANKR. P. 9015(a) .............................................................................................................. 17 FED. R. CIV. P. 13 ............................................................................................................................ 26 FED. R. CIV. P. 38(a)........................................................................................................................ 17 FED. R. CIV. P. 39 ............................................................................................................................ 33 OTHER AUTHORITIES U.S. CONST. amend. VII .......................................................................................................... passim 8 MOORE'S FEDERAL PRACTICE § 39.12[2] (Matthew Bender 3d ed. rev. 2007).............................19

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NATURE AND STAGE OF THE PROCEEDINGS Plaintiff, by and through its duly appointed trustee, Alvarez & Marsal, LLC, respectfully submits this Answering Brief in opposition to the motion to strike Plaintiff's jury demand (the "Motion to Strike" [D.I. #30]) filed by the defendants in the above-captioned proceeding (collectively, "Defendants" or "Credit Suisse") and in response to the memorandum filed in support thereof (the "Defendants' Brief" [D.I. #31]; cited herein as "Def. Br. at __"). SUMMARY OF ARGUMENT This Court's analysis of the Motion to Strike should begin and end with one reported decision, issued in this very case: OHC Liquidation Trust v. Credit Suisse (In re Oakwood Homes Corp.), 378 B.R. 59 (Bankr. D. Del. 2007) (hereinafter, "Oakwood Homes" or the "Jury Trial Opinion"). In that opinion, the United States Bankruptcy Court for the District of Delaware, Walsh, J. (the "Bankruptcy Court") expressly considered and cogently rejected every single argument that is raised yet again (and almost verbatim) by the Defendants' Brief. Rather than directly confront the Bankruptcy Court's legal and factual analysis, Defendants opted to essentially ignore the Jury Trial Opinion in all their briefing before this Court, as if the proceedings before Judge Walsh were an absolute nullity. This strategy not only demonstrates a stubborn unwillingness to accept an adverse decision on the merits, but also has produced another motion that is deeply flawed, both as a matter of procedure and substance. -Procedural Deficiencies. Defendants' attempt to subvert the Jury Trial Opinion via an indirect attack before this Court runs afoul of at least three well-established doctrines. As Plaintiff has previously stated, we believe that these procedural issues ­ detailed on pages 8-17, infra ­ are dispositive here. Thus, if the Court concurs with any of Plaintiff's arguments, then it need read no further.

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First, in Celotex Corp. v. Edwards, 514 U.S. 300 (1995), the Supreme Court made clear that when a party disputes a valid bankruptcy court ruling, it must follow standard appellate procedures and cannot pursue an inappropriate collateral attack. Indeed, Credit Suisse was well aware that a direct challenge is the proper route for relief, as demonstrated by their motion to this Court requesting "leave" for a premature interlocutory appeal of the Jury Trial Opinion. As Plaintiff has set forth in other responsive briefing, not even one of the four required conditions for such an appeal exists here, but that fact does not change the rule that a proper appeal remains the only recourse available to Defendants if they wish to challenge the Jury Trial Opinion. Second, because the Jury Trial Opinion has not been reversed or superseded, it should be treated as "law of the case" and given preclusive effect vis-à-vis the Motion to Strike. This result not only finds concrete support in the doctrinal framework charted by the Supreme Court and Third Circuit, but also advances broader policy objectives. After all, if the rule in this District is that adversary proceedings involving jury rights remain before bankruptcy judges until they are "trial ready," then pre-trial rulings by those judges must have some permanence and carry the full weight of law unless reversed on appeal. The alternative model Defendants advance ­ under which every decision made by a bankruptcy judge can be revisited on a wholesale basis before a district judge following withdrawal of the reference ­ is a recipe for chaos which perverts the principles of judicial economy and efficient allocation of responsibility that justify making bankruptcy judges "a unit of the district court" in the first instance. See 28 U.S.C. § 151. Put simply, Plaintiff believes the Jury Trial Opinion has meaning and is not the result of an academic exercise that can be disregarded whenever it is convenient for Defendants. Third, recognizing the procedural predicament they face, Defendants argue that the Court should treat their Motion to Strike as a motion for reconsideration of the Jury Trial

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Opinion. While this strategy should be foreclosed by basic preclusion doctrines, Defendants' Brief remains facially inadequate even under Defendants' proposed paradigm. Under controlling Third Circuit law, to prevail on a motion for reconsideration, Credit Suisse must (i) present new, previously unavailable evidence; (ii) demonstrate intervening changes in the law; or (iii) explain why the Bankruptcy Court committed a "manifest error" in the Jury Trial Opinion. See Max's Seafood Cafe v. Quinteros, 176 F.3d 669, 677 (3d Cir. 1999). Yet the Defendants' Brief does not even attempt to do any of these things. Rather, Defendants simply parrot the four identical, threadbare arguments they presented to Judge Walsh ­ using the same documents, analysis, and legal authority ­ without ever addressing the reasons why all of those arguments were rejected. Thus, because Defendants never outline any argument that could theoretically support a motion for reconsideration, immediate denial of the Motion to Strike would be proper even were the Court to accept the shaky procedural construct that Defendants ask the Court to use here. -Deficiencies on the Merits. If the Court sweeps aside all of the previously identified deficiencies and goes further than it must by examining Defendants' recurrent arguments on the merits, then it should reject each one of them, for exactly the reasons the Bankruptcy Court did. First, Defendants' attempt to implode two of Plaintiff's claims, as support for a "mixed relief" theory, is unwarranted. Defendants cannot rewrite the borders of Plaintiff's claims and remedies or erase their inherently "legal" nature. Further, even on its own terms, this "mixed relief" theory is akin to the "incidental" construct rejected long ago by Dairy Queen, Inc. v. Wood, 369 U.S. 469 (1962). Thus, Plaintiff would enjoy firm jury rights outside of bankruptcy. Second, Defendants' categorical "waiver" theory, under which there are no jury rights when debtors or trustees sue in bankruptcy court, is likewise contrary to Supreme Court

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precedent, as well as case law in this Circuit. See, e.g., Ross v. Bernhard, 396 U.S. 531, 538 (1970) ("legal claims are not magically converted into equitable issues by their presentation to a court of equity"). The proper inquiry is whether every one of Plaintiff's counterclaims is necessarily part of the "claims-allowance process." See Billing v. Ravin, Greenberg & Zackin, P.A., 22 F.3d 1242, 1251-52, n.14 (3d Cir. 1994). Here, Credit Suisse simply ignores the Bankruptcy Court's astute analysis about why three of Plaintiff's counterclaims are logically and legally unrelated to proofs of claim filed under a contract covering just 88 days of a multi-year relationship. Defendants' obvious attempt to make those limited proofs of claim the tail that wags the constitutional rights dog cannot overcome the facts or analogous case law. Third, Defendants also try to seek asylum in a contractual jury waiver. But they overlook the inconvenient truth that the waiver is limited in scope and signed by only a handful of the parties. Plus, even if that contractual waiver could somehow be read to apply here, Credit Suisse failed yet again to meet their burden of proving that the purported waiver was enforceable in the first place. Since the waiver is strictly construed against Defendants, this final argument also fails. See, e.g., Tracinda Corp. v. DaimlerChrysler AG, 502 F.3d 212, 222 (3d Cir. 2007). In sum, Credit Suisse made the very same arguments to the Bankruptcy Court, and that court rejected them all. In so doing, the Bankruptcy Court devoted judicial resources to crafting a detailed opinion explaining why Defendants' position is contrary to controlling case law. While Credit Suisse would prefer to ignore them, the reasons outlined by the Bankruptcy Court make clear that this is not a close case. Even if it were, however, the Bankruptcy Court correctly deferred to the long-standing principle that every "close case" must be resolved in favor of protecting the fundamental right to a jury trial. See, e.g., Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 510-11 (1959). Accordingly, the Motion to Strike should be denied in its entirety.

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RELEVANT BACKGROUND FACTS 1. CSS's Proofs Of Claim And The Objection/Counterclaims. Credit Suisse Securities (USA), LLC (f/k/a Credit Suisse First Boston LLC) ("CSS") filed four identical proofs of claim in the jointly-administered bankruptcy cases of Oakwood Homes Corporation and certain of its affiliates (collectively, the "Debtors" and together with non-debtor affiliates, the "Oakwood Companies"). In those proofs of claim CSS asserted liquidated and unliquidated claims for various amounts, all of which stemmed from a certain letter agreement dated August 19, 2002 (the "August 19 Contract"). Plaintiff commenced this proceeding on November 13, 2004 via an objection to CSS's claims, which was coupled with ten counterclaims (the "Objection/Counterclaims" [D.I. #32, Ex. B]). The Objection/Counterclaims contained numerous allegations of fact that pre-date the execution of the August 19 Contract. (See, e.g., Objection/Counterclaims at ¶¶ 11, 18-32 & 49-51.) The Objection/Counterclaims' cover explicitly stated "JURY TRIAL DEMANDED," a point reiterated in its text (see id. at ¶ 3), as well as via a separately attached document entitled "DEMAND FOR JURY TRIAL" (id. at p. 38). Defendants moved to dismiss the Objection/Counterclaims, but that motion was denied.1 See OHC Liquidation Trust v. Credit Suisse First Boston (In re Oakwood Homes Corp.), 340 B.R. 510 (Bankr. D. Del. 2006). The Objection/Counterclaims presented, and the discovery process honed, the case Plaintiff is now prepared to try, which consists of two conceptually distinct parts. First, Plaintiff will try several causes of action that stem from Credit Suisse's misconduct unrelated to the August 19 Contract, most of which occurred prior to August 19,
1

Even though Defendants could have made many of the arguments they now make at that juncture, Defendants did not attack Plaintiff's jury demand in their motion to dismiss. Nor did Defendants ever bring a motion to strike the jury demand before the Bankruptcy Court.
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2002. More specifically, the evidence will demonstrate that Credit Suisse enjoyed a close and intimate relationship with the Oakwood Companies. This trust and confidence between the parties gave rise to extra-contractual fiduciary duties for Credit Suisse, as well as an implied advisory contract. The evidence will further show that Credit Suisse behaved in a fashion at odds with its clear duties ­ indeed, a fashion that violated even the traditional "reasonable" standard of care applied to negligence claims. Plaintiff will seek to remedy the harm caused by Credit Suisse's habitual misconduct at trial via an award of compensatory money damages. Second, Plaintiff will try several other causes of action relating directly to the quality of performance under the August 19 Contract. These latter counterclaims flow from CSS's failure to fulfill obligations under that contract, which breaches prevent the allowance of CSS's claims, entitle Plaintiff to additional damages, and trigger certain avoidance claims. Both sets of counterclaims stem from Credit Suisse's malfeasance, but a brightline divides them: The first is based upon conduct not arising from the August 19 Contract, and has no logical relationship to the allowance of CSS's claims; the second is based upon conduct occurring after August 19, 2002, and is inextricably linked to the allowance of CSS's claims.2 2. Recent Proceedings Before Judge Walsh And This Court. In anticipation of a status conference before the Bankruptcy Court on October 4, 2007, the parties negotiated a status conference report (the "2007 SCR" [D.I. #32, Ex. E]). Since discovery would soon close, thereby making the case "trial ready," Plaintiff affirmatively sought to enforce the jury demand it had properly made. Hence, the 2007 SCR made clear Plaintiff's

2

In the Jury Trial Opinion, the Bankruptcy Court made clear that its understanding of the bifurcated nature of Plaintiff's case comports with Plaintiff's understanding of its own case. See Oakwood Homes, 378 B.R. at 64 (describing how Plaintiff's case arises "from two sets of distinct nucleus of operative facts," only one of which relates to the August 19 Contract).
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desire to enforce its jury rights, willingness to consent to a jury trial before the Bankruptcy Court, and intent to put the predicate question of its rights to a jury trial to the Bankruptcy Court in light of Defendants' decision never to file a motion to strike Plaintiff's jury demand. (See 2007 SCR at pp. 2-3.) In contrast, Credit Suisse emphasized that they "do not consent to a jury trial conducted by this [Bankruptcy] Court" and sought an immediate bench trial. (See id. at p. 2.) Per the Bankruptcy Court's instructions, the parties filed lengthy briefs presenting their positions about Plaintiff's rights to a jury trial. In their briefing before the Bankruptcy Court, Defendants made the exact same arguments now made in support of their Motion to Strike ­ indeed, they relied on virtually identical analysis, documents, and legal authorities.3 On November 15, 2007, the Bankruptcy Court issued the Jury Trial Opinion, in which it (i) held that Plaintiff has the constitutional right to a jury trial with respect to three of its counterclaims; and (ii) rejected each of the four arguments Credit Suisse then made, and now makes again, to contest that right. See Oakwood Homes, 378 B.R. at 64-65 (listing arguments made by Defendants); cf. Def. Br. at 1-2 (reciting the very same arguments). Promptly following the close of discovery and the issuance of the Jury Trial Opinion ­ i.e., once "cause" crystallized for a motion under 28 U.S.C. § 157(d) ­ Plaintiff moved to withdraw the reference and schedule a jury trial before this Court. (See D.I. #1.) Defendants opposed that motion, principally on the grounds that "the Trust has no jury trial rights in this action." (See D.I. #2 at p. 9.) In support of this position, Defendants repeated, for the second time, the same set of arguments that had been considered and rejected by the Bankruptcy Court ­ again relying on virtually identical analysis, documents, and authority. (See id. at pp. 12-30.)
3

In order to let the Court compare the pleadings and fully appreciate their duplicative nature, a true and correct copy of the brief Defendants filed before the Bankruptcy Court is attached as Exhibit "A" to the accompanying Declaration of Whitman L. Holt (the "Holt Decl.").
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To buttress their initial collateral attack in this Court, Defendants also brought a motion for "leave" to take an interlocutory appeal of the Jury Trial Opinion under 28 U.S.C. § 158, which remains open and pending as Civil Case No. 07-mc-00215-JJF. In their motion for "leave" to appeal, Defendants again, for the third time, made the same arguments that they put before the Bankruptcy Court and now seek to revive in support of the Motion to Strike. Plaintiff filed a timely answer in opposition to Defendants' motion, explaining why Defendants cannot satisfy even one of the four conditions that are required for a premature interlocutory appeal. Following a January 22, 2008 status conference, this Court entered an Order granting Plaintiff's motion to withdraw the reference and schedule a jury trial [D.I. #24]. In that Order, the Court (i) recited that it had "considered Plaintiff's request for a jury trial"; and (ii) provided that, absent a written stipulation by both sides, "a Jury Trial will commence" on June 17, 2008. During the next week, the parties exchanged a series of ex parte letters relating to Defendants' request for an order setting a briefing schedule for the Motion to Strike (which was never entered) and the scope of the Court's January 23, 2008 Order. (See D.I. #25-27.) ARGUMENT The Jury Trial Opinion not only is completely correct on the merits, but also is a valid judgment entered by a federal court after full and fair briefing. These two truths doom the Motion to Strike, both as a matter of basic procedure and substance, as discussed in turn below. Once again, we note that the Court will likely only need to expend its limited judicial resources analyzing the procedural arguments, because those arguments should be outcome-determinative. A. THE MOTION TO STRIKE IS PLAGUED BY A MULTITUDE OF PROCEDURAL DEFECTS. Although Defendants already had their day before the Bankruptcy Court, and presented the same arguments to this Court twice before, they seek to ignore the learned Jury

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Trial Opinion and get a fourth bite at the apple. Indeed, the Motion to Strike ultimately turns on Defendants' apparent belief that the Jury Trial Opinion is a legal nullity.4 Such tactics not only are procedurally improper, as Defendants recognize, but also are extraordinary in that they effectively make believe that Judge Walsh did not consider and reject all Defendants' arguments. As detailed below, the Motion to Strike is precluded at the fore by three separate, yet equally fundamental, legal doctrines. Plus, even taken on its own terms ­ as a putative motion for reconsideration of the Jury Trial Opinion ­ the motion never tries to demonstrate the new facts or "manifest error" that could justify a wholesale uprooting of the Jury Trial Opinion. 1. The Motion To Strike Is An Impermissible Collateral Attack On The Jury Trial Opinion. "A 'collateral attack' is a tactic whereby a party seeks to circumvent an earlier ruling of one court by filing a subsequent action in another court." Pratt v. Ventas, Inc., 365 F.3d 514, 519 (6th Cir. 2004). The long-standing bar on using this tactic stems from the need for federal court orders to carry the full force of law unless and until they are reversed on appeal. See, e.g., AP Indus., Inc. v. SN Phelps & Co. (In re AP Indus., Inc.), 117 B.R. 789, 797 (Bankr. S.D.N.Y. 1990) ("The rationale underlying the bar against collateral attack is twofold: (1) that there be finality to matters administered by the judicial system; and (2) that the integrity of the appellate procedure is not circumvented."). Unfortunately for Defendants, the Jury Trial Opinion is such a ruling, and it cannot be collaterally attacked via the instant motion practice.
4

Defendants never claim the Bankruptcy Court lacked jurisdiction to decide the jury issue, nor could they in light of the abundant case law supporting such authority. See Brown v. Citicorp USA, Inc. (In re FoxMeyer Corp.), No. 99-705, 1999 WL 33220040, at *1 (D. Del. Dec. 1, 1999) ("Either this court or the Bankruptcy Court can determine whether [parties] are entitled to a jury trial."). Accord, e.g., Am. Universal Ins. Co. v. Pugh, 821 F.2d 1352, 1355 (9th Cir. 1987); Corzin v. Harvey (In re Commercial Maint. & Repair), No. 06-46, 2007 U.S. Dist. LEXIS 71408, at *6-10 (N.D. Ohio Sept. 25, 2007); Official Comm. of Unsecured Creditors v. TSG Equity Fund L.P. (In re EnvisioNet Comput. Servs.), 276 B.R. 1, 6-7 (D. Me. 2002).
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In fact, the Supreme Court previously rejected just such a play in Celotex Corp. v. Edwards, 514 U.S. 300 (1995), in which parties attempted to collaterally attack a bankruptcy court order in a different federal court. The Court strongly rebuked these tactics, noting that if the parties were "dissatisfied with the Bankruptcy Court's ultimate decision," then they should follow the appellate procedures in 28 U.S.C. § 158. See id. at 313. The parties' choice "not to pursue this course of action, but instead to collaterally attack the Bankruptcy Court's [order]" threatened to "seriously undercut[] the orderly process of the law." Id.5 Celotex articulates no new rule; rather, it reaffirms principles that have been part of bankruptcy practice for decades.6 The Motion to Strike is an analogous threat to the rule of law. After receiving an unfavorable ruling from a federal court, Defendants hope either to ignore or to attack that ruling before this Court. In fact, as in AP Industries, "Defendants' Motion constitutes a de facto appeal taken in obvious disregard of Bankruptcy Rule 8001, et seq. and of 28 U.S.C. § 158 and is no more than an improper collateral attack." See 117 B.R. at 797. If Defendants disagree with the Bankruptcy Court's legal analysis, the correct remedy is to seek proper appellate review. Indeed,
5

See also, e.g., Pratt, 365 F.3d at 520 (discussing how Celotex requires "that litigants must go through the proper channels of the statutorily-defined appellate process to challenge a bankruptcy court's judgment" (citation and quotation marks omitted)); Lindsey v. Ipock, 732 F.2d 619, 622 (8th Cir. 1984) (refusing to allow collateral attack on bankruptcy court orders in subsequent proceedings; objecting party either had to appeal or "was obligated to obey these orders even if they were in error"); In re White Farm Equip. Co., 38 B.R. 718, 722-23 (N.D. Ohio 1984) (failure to appeal bankruptcy court's unfavorable ruling "constitutes a waiver of the issue and a bar to a collateral attack" in later motions before the district court). See In re L.T. Ruth Coal Co., 66 B.R. 753, 777 (Bankr. E.D. Ky. 1986) ("Even in cases and proceedings under the Bankruptcy Act where jurisdiction exercised by the bankruptcy judge was subject always to review by the district judge, the rule of law was that absent timely appeal the decision of the bankruptcy judge had the force and effect of an order of the district court, was res judicata as to the merits, and was not subject to collateral attack in the district court." (internal punctuation and citations omitted)); see also, e.g., Seemann v. Nat'l Bank of Commerce, 112 F.2d 378, 380 (5th Cir. 1940) (attack brought in "ancillary proceedings [was] nothing more than a collateral attack on the orders of the primary bankruptcy court").
10

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Credit Suisse knows this, as demonstrated by their motion for "leave" to appeal under section 158(a). Unable to wait for the Court to rule on that motion (which should be denied), Credit Suisse chose a prohibited path. Cf. Valley Nat'l Bank v. Needler (In re Grantham Bros.), 922 F.2d 1438, 1442 (9th Cir. 1991) (affirming sanctions against counsel who knowingly brought "an impermissible collateral attack upon [a] bankruptcy court order"). The appellate procedures carefully crafted by Congress should not be short-circuited via Defendants' collateral attack. Brown v. Citicorp USA, Inc. (In re FoxMeyer Corp.), No. 99-705, 1999 WL 33220040 (D. Del. Dec. 1, 1999), further undermines Credit Suisse's disregard of the Jury Trial Opinion. In FoxMeyer, several parties argued, like Credit Suisse here, that the District Court is the only court that can decide jury rights. Judge Sleet disagreed, holding "that the Bankruptcy Court should determine, at least in the first instance, whether the [parties] are entitled to a jury trial." See id. at *2. Further, Judge Sleet highlighted how the standard practice after a disputed jury ruling would be to appeal pursuant to 28 U.S.C. § 158. See id. at *2 n.6.7 Consequently, FoxMeyer makes clear that courts in this District expect losing parties to follow customary appellate procedures if they wish to contest a bankruptcy court's ruling about jury rights. At bottom, Defendants' thinly-disguised collateral attack on the Jury Trial Opinion should be quickly rejected as contrary to decades of settled case law, including Celotex. 2. The Jury Trial Opinion Represents "Law Of The Case." The Motion to Strike is also procedurally defective for reasons independent of the collateral attack doctrine. "As most commonly defined, the doctrine [of the law of the case]
7

While Judge Sleet did remark that "potential inefficiency might warrant" consideration of disputed bankruptcy rulings along with a motion for withdrawal, this comment was limited to rulings based on "purely legal" issues. See id. at *2 n.6 (emphasis added). This possible exception to the standard practice could not apply here in any event since Judge Walsh made several factual findings in the Jury Trial Opinion, as discussed at pages 36-38, infra.
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posits that when a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages in the same case." Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 815-16 (1988) (brackets in original) (quoting Arizona v. California, 460 U.S. 605, 618 (1983)). This discretionary "doctrine limits relitigation of an issue once it has been decided in an earlier stage of the same litigation," and should be applied "with the intent that it will promote finality, consistency, and judicial economy." See, e.g., Hamilton v. Leavy, 322 F.3d 776, 786-87 (3d Cir. 2003) (citation and quotation marks omitted). The Jury Trial Opinion should be treated as "law of the case" here because it is a valid judicial ruling issued earlier in this litigation, which was rendered after full and fair briefing, and has not been reversed or superseded.8 The Jury Trial Opinion's interlocutory nature does not change the analysis since courts have recognized that even interlocutory bankruptcy rulings function as "law of the case" in later district court proceedings. See, e.g., XL Sports, Ltd. v. Lawler, No. 01-5363, 49 Fed. Appx. 13, 21 (6th Cir. Oct. 8, 2002) (bankruptcy court's denial of motion for judgment on the pleadings was law of the case before district court). Of particular importance is that this same result obtains in the very procedural context presented here ­ i.e., a dissatisfied litigant attempting to reargue a bankruptcy court's previous ruling about jury rights during related district court proceedings. See, e.g., CDX Liquidating Trust v. Venrock Assocs.,
8

Defendants have previously suggested that the Bankruptcy Court is a "lower" or "inferior" court. This argument reflects a deep misunderstanding of the structure codified in 28 U.S.C. § 151, which clearly provides that bankruptcy courts "shall constitute a unit of the district court." See also, e.g., Grewe v. United States (In re Grewe), 4 F.3d 299, 304 (4th Cir. 1993) ("bankruptcy courts are not separate from, but rather units or divisions of the district court"); In re Nw. Cinema Corp., 49 B.R. 479, 480 (Bankr. D. Minn. 1985) ("The term 'bankruptcy court' is solely a phrase that is applied to the bankruptcy judges for a district insofar as those judges together are a unit of the district court. Thus while functionally there may appear to be a separate bankruptcy court, for jurisdictional purposes there is only one court, i.e., the district court." (citation omitted)). Under this structure, bankruptcy courts should be treated as coordinate courts vis-à-vis district courts since they ultimately are part of the same court.
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No. 04-7236, 2007 U.S. Dist. LEXIS 41439, at *9 (N.D. Ill. June 4, 2007) (bankruptcy judge's "determination that the Trustee has not waived his right to a jury trial by voluntarily filing for bankruptcy protection establishes the law of the case on that issue" before district judge); West Elecs., Inc. v. Nat'l Union Fire Ins. Co. (In re West Elecs., Inc.), No. 91-3781, 1992 U.S. Dist. LEXIS 10957, at *28-29 (D.N.J. Jan. 9, 1992) (bankruptcy court's rejection of attack on party's jury rights was law of the case when attacker did not successfully appeal). There is no reason for the Court to depart from these cogent authorities. To the contrary, this Court should join the existing case law by holding that the Jury Trial Opinion serves as "law of the case" here. 3. The Motion To Strike Offends Fundamental Principles Of Issue Preclusion And Public Policy. A third procedural deficiency is Defendants' failure to grapple with key rules of issue preclusion. For centuries it has been "[a] fundamental precept of common-law adjudication . . . that a 'right, question or fact distinctly put in issue and directly determined by a court of competent jurisdiction cannot be disputed in a subsequent suit between the same parties or their privies.'" Montana v. United States, 440 U.S. 147, 153 (1979) (quoting Southern Pac. Ry. Co. v. United States, 168 U.S. 1, 48-49 (1897); alteration omitted). This rule is grounded in the notion that precluding "parties from contesting matters that they have had a full and fair opportunity to litigate protects their adversaries from the expense and vexation attending multiple lawsuits, conserves judicial resources, and fosters reliance on judicial action by minimizing the possibility of inconsistent decisions." Id. at 153-54. Or, as the Third Circuit recently put it, preclusion rules advance "the systemic interest that courts and litigants have in ensuring that the identical parties receive only 'one bite at the apple' on a given issue." See Jean Alexander Cosmetics, Inc. v. L'Oreal USA, Inc., 458 F.3d 244, 254 (3d Cir. 2006), cert. denied, 127 S. Ct. 1878 (2007).

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The Motion to Strike ought to be barred by this basic preclusion doctrine.9 By their Motion to Strike, Defendants seek to get not only more than "one bite" at an issue which was already fully briefed and decided, but also a third chance to present their flawed arguments to this Court. At some point, Defendants must accept their (rightful) loss before the Bankruptcy Court and be denied any further opportunity to subvert the Jury Trial Opinion prior to a final judgment on the merits. That time is now; the Motion to Strike should be rejected in toto. The problems with the Motion to Strike extend beyond pure legal doctrine and into the realm of practical policy considerations. As outlined by Judge Sleet in Wakefern Food Corp. v. C&S Wholesale Grocers, Inc. (In re Big V Holding Corp.), No. 01-233, 2002 U.S. Dist. LEXIS 12609, at *17-19 (D. Del. July 11, 2002), the prescribed practice in this District when a party to an adversary proceeding has a jury right is for the case to remain before the bankruptcy court until it is "trial ready," with the bankruptcy court resolving all pre-trial matters until that point (subject, of course, to the ability to seek immediate appellate review in appropriate circumstances), at which point the bankruptcy reference should be withdrawn for the jury trial.
9

As a formal matter, even though the instant case is not a separate "suit" from that pending before the Bankruptcy Court, all of the "standard requirements for the application of collateral estoppel" nevertheless are satisfied here; to wit: "(1) the identical issue was previously adjudicated; (2) the issue was actually litigated; (3) the previous determination was necessary to the decision; and (4) the party being precluded from relitigating the issue was fully represented in the prior action." See Jean Alexander Cosmetics, 458 F.3d at 249 (citation and quotation marks omitted). The fact that the Jury Trial Opinion is interlocutory in nature, rather than a "final" order giving Defendants the option to appeal as a matter of right, does not alter the analysis; for purposes of issue preclusion, the Jury Trial Opinion involved a dispute that was fully litigated and a ruling that was in no way tentative, which makes the decision sufficiently final now to preclude the Motion to Strike. See, e.g., Henglein v. Colt Indus. Operating Corp., 260 F.3d 201, 209-10 (3d Cir. 2001) (discussing how preclusive effect may be given to rulings that are not subject to immediate appeal), cert. denied, 535 U.S. 955 (2002); Metromedia Co. v. Fugazy, 983 F.2d 350, 366-67 (2d Cir. 1992) (giving preclusive effect to non-final bankruptcy order where party "had a full and fair opportunity to litigate [the] issues in the bankruptcy court" and "[t]here was nothing tentative about the bankruptcy court's decision"), cert. denied, 508 U.S. 952 (1993).
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The tactics underlying the Motion to Strike would contaminate this system, if not eviscerate it entirely. After all, if the Jury Trial Opinion can be revisited on a wholesale basis upon withdrawal of the reference, then so too can every other decision the Bankruptcy Court rendered in the more than three years in which this case was before it, including a multitude of discovery rulings and a comprehensive opinion denying Defendants' motion to dismiss. See OHC Liquidation Trust v. Credit Suisse First Boston (In re Oakwood Homes Corp.), 340 B.R. 510 (Bankr. D. Del. 2006). Yet this is a prescription for utter chaos; if a bankruptcy court is to have the ability to adjudicate disputes prior to a case becoming "trial ready," then its rulings must have the force of law unless and until they are reversed following a proper appeal. Motions like the Motion to Strike undermine the considerations of judicial economy, finality, and efficient allocation of pre-trial authority that drove Big V Holding Corp. Because those considerations signify important policy goals, this Court should be quite hesitant to countenance any litigation strategy ­ such as the Motion to Strike ­ that would move the law in precisely the opposite way. 4. Even Under Defendants' "Reconsideration" Paradigm, The Motion To Strike Fails On Its Face. Reflecting an awareness of the procedural defects with their Motion to Strike, Defendants argue that the Court should treat it as a motion for reconsideration of the Jury Trial Opinion pursuant to this Court's "inherent power to reconsider interlocutory orders," citing Official Committee of Unsecured Creditors v. Clark (In re National Forge Co.), 326 B.R. 532 (W.D. Pa. 2005),10 as authority. (See Def. Br. at 6-7 n.2.) Plaintiff respectfully submits that the framework adopted in National Forge and now advocated by Credit Suisse is inconsistent with

10

In National Forge, upon withdrawal of the reference, District Judge Sean J. McLaughlin construed arguments made in regards to pending appeals of an interlocutory bankruptcy court order "as motions to reconsider the Bankruptcy Court's ruling." See 326 B.R. at 541.
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the doctrines discussed in detail above (none of which were considered in National Forge). Nevertheless, even if the Court agrees with Defendants' proposal and treats the Motion to Strike as a request for reconsideration of the Jury Trial Opinion, it is clear that the motion still fails. As explained in National Forge, "[r]econsideration is appropriate as a mechanism by which to correct manifest errors of law or fact or to present newly discovered evidence," 326 B.R. at 541 (quotation marks omitted), and such motions will be denied absent that showing. See id. at 563. This Court recently set forth a similar standard of review for reconsideration motions: The purpose of a motion for reconsideration is to correct manifest errors of law or fact or to present newly discovered evidence. A motion for reconsideration may be granted if the moving party shows: (1) an intervening change in the controlling law; (2) the availability of new evidence that was not available when the court issued its order; or (3) the need to correct a clear error of law or fact or to prevent manifest injustice. Shipley v. Orndoff, No. 04-1530, 2007 U.S. Dist. LEXIS 76462, at *2 (D. Del. Oct. 12, 2007) (citation omitted). Thus, a motion for reconsideration "should not be granted where it would merely allow wasteful repetition of arguments already briefed, considered and decided." Brambles USA, Inc. v. Blocker, 735 F. Supp. 1239, 1240 (D. Del. 1990) (quotation marks omitted). Nor ought such a motion be used "to allow for endless debate between the parties and the Court" about previously decided issues. See id. Once again, finality is the general rule. Measured against this standard,11 the Motion to Strike and the Defendants' Brief fall short. Credit Suisse has pointed to no new evidence or intervening case law, nor to any facts or decisions purportedly overlooked by the Bankruptcy Court. Rather, Credit Suisse simply
11

Defendants fallaciously assert that this Court should apply a de novo standard of review under their reconsideration model. (See Def. Br. at 6-7 n.2.) This is, at best, a striking misreading of National Forge; that court repeatedly stated how it measured the bankruptcy court's ruling with the standard "manifest error" test. See 326 B.R. at 541, 544, 547 & 563. Not once did that court use the phrase "de novo," let alone suggest it is the right standard, and Credit Suisse offers no other authority using a de novo standard for a reconsideration motion.
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regurgitates the same threadbare arguments, for the fourth time in less than four months, which were considered and rejected by the Bankruptcy Court. In fact, with the exception of a passing reference in their background facts (see Def. Br. at 6), Defendants never mention the Jury Trial Opinion. This abject failure to engage the Bankruptcy Court's analysis ­ let alone to critically dissect the Jury Trial Opinion and detail purported errors ­ cannot be the foundation for a motion to reconsider; one can never identify "manifest error" in a judicial decision if one simply ignores what the court wrote therein. As such, even under Defendants' "reconsideration" paradigm, the profound, facial failings of their pleadings should prompt a rapid denial of the Motion to Strike. B. PLAINTIFF HAS A BASIC CONSTITUTIONAL RIGHT TO A JURY TRIAL. In the event that the Court does not deny the Motion to Strike because of its numerous procedural defects, Plaintiff repeats below similar responses to Defendants' arguments on the merits that it has presented three times before, using the Jury Trial Opinion as an anchor. A review of the Jury Trial Opinion and related case law shows that Judge Walsh committed no "manifest error" of law or fact, but rather reached the proper result under controlling authorities. ***** The Seventh Amendment's guarantee that, "[i]n Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved," is "preserved to the parties inviolate" by Federal Rule of Civil Procedure 38(a), made applicable here by Federal Rule of Bankruptcy Procedure 9015(a). As the Supreme Court has repeatedly emphasized, "'[m]aintenance of the jury as a fact-finding body is of such importance and occupies so firm a place in our history and jurisprudence that any seeming curtailment of the right to a jury trial should be scrutinized with the utmost care.'" Chauffeurs, Teamsters & Helpers v. Terry, 494 U.S. 558, 565 (1990) (quoting Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 501 (1959) (quoting Dimick v. Schiedt, 293 U.S. 474, 486 (1935))).
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The seminal decision regarding parties' rights to a jury trial in bankruptcy remains Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (1989). See, e.g., Liquidation Trust of Hechinger Inv. Co. v. Fleet Retail Fin. Group (In re Hechinger Inv. Co.), 327 B.R. 537, 543-46 (D. Del. 2005) (adopting and applying the Granfinanciera test); Oakwood Homes, 378 B.R. at 65 (same). In Granfinanciera, Justice Brennan outlined the following analytic framework: The form of our analysis is familiar. First, we compare the statutory action to 18thcentury actions brought in the courts of England prior to the merger of the courts of law and equity. Second, we examine the remedy sought and determine whether it is legal or equitable in nature. The second stage of this analysis is more important than the first. [Third, if], on balance, these two factors indicate that a party is entitled to a jury trial under the Seventh Amendment, we must decide whether Congress may assign and has assigned resolution of the relevant claim to a nonArticle III adjudicative body that does not use a jury as factfinder. 492 U.S. at 42 (emphasis added) (citations and quotation marks omitted). The third inquiry turns on whether a cause of action is part of "the restructuring of debtor-creditor relations in bankruptcy," such as in the claims-allowance process, or whether it is a "claim[] brought by a bankrupt corporation to augment the bankruptcy estate." See id. at 56. The Bankruptcy Court sequentially applied Granfinanciera's factors in the Jury Trial Opinion, while also considering (and rejecting) Defendants' four arguments against a jury. In the Bankruptcy Court's words, the central arguments that Defendants make are as follows: First, the types of claims and forms of relief Plaintiff is raising are equitable rights, thus there is no right to a jury trial attached. Second, even if Plaintiff has the right to jury trial it is unenforceable because the claims are part of the "claims-allowance process." Third, in connection with the Note Purchase Agreement, several of the Oakwood Companies executed contracts in which they waived the right to a jury trial. Finally, Defendants argue that because Plaintiff brought these actions in a court of equity, Plaintiff has forfeited its right to a jury trial. Oakwood Homes, 378 B.R. at 64-65. Although the Defendants' Brief has rearranged these four points, the basic arguments remain exactly the same. We discuss the fundamental flaws with each argument in turn below, following the order used by Judge Walsh in the Jury Trial Opinion.

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1.

A Jury Right Exists Where, As Here, Any "Legal" Claims Are Present Or "Legal" Relief Is Sought. As the Supreme Court explained in Dairy Queen, Inc. v. Wood, "[i]t would make

no difference if the equitable cause clearly outweighed the legal cause so that the basic issue of the case taken as a whole is equitable. As long as any legal cause is involved the jury rights it creates control." 369 U.S. 469, 473 n.8 (1962) (emphasis added) (citation and quotation marks omitted); see also Granfinanciera, supra, 492 U.S. at 41 (underscoring the key distinction between "suits in which legal rights were to be ascertained and determined, in contradistinction to those where equitable rights alone were recognized, and equitable remedies were administered" (bolded emphasis added) (quoting Parsons v. Bedford, 3 Pet. 433, 447 (1830))). The Bankruptcy Court properly recognized and applied Granfinanciera and Dairy Queen by rejecting Defendants' "mixed relief" theory. See Oakwood Homes, 378 B.R. at 65-68. After all, this case includes both "legal" claims and "legal" remedies,12 either of which requires a jury. Defendants simply cannot contest that claims for negligence and breach of implied contract are historically "legal" claims, which would have been put before a court of law in 18th-century England.13 Instead, Credit Suisse desperately tries to recast Plaintiff's whole case

12

While Defendants often act as if the jury analysis is applied to the proceeding as a whole, that clearly is incorrect: "The right to jury trial attaches to specific issues, rather than to an entire action." 8 MOORE'S FEDERAL PRACTICE § 39.12[2] (Matthew Bender 3d ed. rev. 2007). Also, while the counterclaims at issue here arise from state law, their classification as "legal" or "equitable" remains an issue of federal law. See, e.g., Simler v. Conner, 372 U.S. 221, 222 (1963) ("[T]he characterization of [a] state-created claim as legal or equitable for purposes of whether a right to jury trial is indicated must be made by recourse to federal law."); Hechinger Inv. Co., supra, 327 B.R. at 543. Nevertheless, their pre-petition, state law origins are very relevant to the "claims-allowan