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District Court Grants Motion to Transfer to Eastern District of Virginia

Posted In Case Summaries
Bank of America, N.A. (USA) v. US Airways, Inc., 2005 WL 3525680, (D.Del., December 21, 2005). The District Court for the District of Delaware granted Defendants' US Airways, Inc., US Airways Group, Inc. and America West Airlines, Inc. Motion to Transfer to the Wastern District of Virginia and declined to rule on Plaintiff's competing Motion for Expedited Remand to Vice Chancellor Strine of the Delaware Chancery Court. The underlying issue in this proceeding was an alleged breach of contract by Defendant US Airways in allowing its co-defendants to issue branded credit cards under the US Airways name. US Airways was a debtor in bankrutpcy; pursuant to its reorganization plan, US Airways merged with America West holdings, and entered into an agreement purusant to which the new entity, along with Intervenor Juniper Bank, would issue a co-branded credit card for US Airways. Plaintiff initially filed suit in the Court of Chancery for the State of Delaware; Defendants later removed the action to the District Court, and then moved to transfer the proceeding to the Eastern District of Virginia. Plaintiff moved to remand, citing lack of subject matter jurisdiction. The court concluded that it had jurisdiction over the proceeding pursuant to 28 U.S.C. s 1334(b) as a matter "related to cases under Title 11." The Court found that a court sitting in the Eastern District of Virginia was better suited to adjudication of the issue raised in the Complaint, because US Airways' bankruptcy proceedings were pending in that district. The Court found that Judge Mitchell of the Easter District of Virginia was, "simply in a far better position than this Court to expeditiously decide critical questions pertaining to Bank of America's Motion to Remand and the merits of the case." Accordingly, the Court transferred the case to the Eastern District of Virginia and declined to rule on the motion to remand, deferring decision on that issue to the Eastern District of Virginia.