Pleasure Cove Resort Asset Mgt Group LLC v. United States of America, Bureau of Reclamation et

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re
PLEASURE COVE RESORT ASSET
MANAGEMENT GROUP, LLC, No. 05-14070
Debtor(s).
______________________________________/
PLEASURE COVE RESORT ASSET
MANAGEMENT GROUP, LLC,
Plaintiff(s),
v. A.P. No. 06-1046
UNITED STATES OF AMERICA, et al.,
Defendant(s).
_______________________________________/
Memorandum on Motion to Dismiss
_________________
Prior to its Chapter 11 filing, debtor and plaintiff Pleasure Cove Resort Asset Management
Group, LLC, operated a resort on Lake Berryessa on land owned by the Unites States and administered
by the Bureau of Reclamation of the Department of the Interior. The concession agreement between the
debtor and the Bureau of Reclamation required the debtor to post a $750,000.00 performance bond to
assure removal of improvements at the end of the agreement’s term. When the debtor failed to post the
bond, the Bureau seized the resort.
Entered on Docket
July 10, 2006
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 06-01046 Doc# 27 Filed: 07/10/06 Entered: 07/10/06 11:38:41 Page 1 of 3

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Before it filed its Chapter 11 petition, the debtor filed an administrative appeal to the
Department of the Interior Office of Hearings and Appeals seeking to obtain either its resort or
compensation for its seizure. It then filed its bankruptcy petition and commenced this adversary
proceeding seeking in essence the same relief. The Bureau of Reclamation has filed a motion to dismiss,
arguing the “doctrine of primary jurisdiction.”
The doctrine of primary jurisdiction has limited applicability in bankruptcy cases. While it is
usually better to leave specialized issues to specialized courts and administrative bodies, the demands of
a particular case can easily outweigh the desire to have a dispute resolved in the ordinary manner
outside of bankruptcy court. Survival of a debtor often depends on prompt adjudication of disputes
outside of the normal process. Adjudication by the bankruptcy court is often compelled by concerns
over the impact of a case on the local economy. For this reason, bankruptcy court jurisdiction is
exhaustive and permits the bankruptcy court to hear a wide variety of matters without requiring
exhaustion of administrative remedies and notwithstanding other statutory jurisdictional restrictions. See
In re Town & Country Home Nursing Services, Inc., 112 B.R. 329, 334-35 (9th Cir.BAP 1990).
However, in this case the deed is done. The debtor is entirely out of business and has no
employees. Its Chapter 11 “plan” is merely to pursue litigation against the Bureau of Reclamation and
pay any recovery to its creditors. There is no compelling reason, or any reason at all, for this court to
become involved in the dispute. Contrary to the debtor’s arguments, there are no substantial bankruptcy
issues involved in the complaint. The original complaint contained no bankruptcy issues whatsoever,
and the amended complaint added only a brief claim that the seizure amounted to a fraudulent
conveyance. These issues can be handled as easily by the Court of Claims as this court, and justice will
be best served by allowing the normal claims process to go forward.
For the foregoing reasons, the court elects to abstain from hearing this adversary proceeding
pursuant to 28 U.S.C. § 1334(c)(1). Counsel for the Bureau shall submit a form of order dismissing this
adversary proceeding without prejudice.
Case: 06-01046 Doc# 27 Filed: 07/10/06 Entered: 07/10/06 11:38:41 Page 2 of 3

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Dated: July 10, 2006
SAlan Jaroslovsky
U.S. Bankruptcy Judge
Case: 06-01046 Doc# 27 Filed: 07/10/06 Entered: 07/10/06 11:38:41 Page 3 of 3