Westport Insurance Corporation v. The Official Committee of Unsecured Creditors…
Westport Insurance Corporation v. The Official Committee of Unsecured Creditors of the Roman Catholic Archbishop of San Francisco
- William Orrick
- 3:25-cv-09314
- U.S. District Court · Northern District of California
- 6
In Westport Insurance v. Official Committee, Judge Orrick granted Westport’s request to move the insurance dispute from bankruptcy court.
Westport Insurance Corporation and the Official Committee of Unsecured Creditors of the Roman Catholic Archbishop of San Francisco are affected because the insurance-coverage dispute was moved from bankruptcy court to the district court. The Roman Catholic Archbishop of San Francisco is also directly involved because the dispute concerns coverage for claims against it.
What happened
In Westport Insurance Corporation v. The Official Committee of Unsecured Creditors of the Roman Catholic Archbishop of San Francisco, Westport asked the district court to take over an insurance-coverage dispute filed in bankruptcy court. The dispute concerns whether Westport must defend or reimburse the Roman Catholic Archbishop of San Francisco under an insurance policy.
Westport argued that the dispute involved state-law contract questions, issues for a jury, and matters that a bankruptcy court could not finally decide. The Roman Catholic Archbishop of San Francisco did not oppose moving the dispute, while stating that it did not admit the underlying allegations or claims.
The court granted Westport’s motion to withdraw the reference. Judge Orrick concluded that the request was timely and that moving the non-bankruptcy contract dispute would promote efficiency; the court did not decide whether the insurance policy provides coverage.
The detailed version
- Westport Insurance Corporation v. The Official Committee of Unsecured Creditors… · No. 3:25-cv-09314
- William Orrick
- Dec. 10, 2025
Background
Westport Insurance Corporation brought a declaratory-relief action in the United States Bankruptcy Court for the Northern District of California against the debtor, the Roman Catholic Archbishop of San Francisco. Westport sought a ruling about whether its prepetition excess-liability insurance policy required it to defend or indemnify the debtor in connection with ongoing sexual-abuse court actions. Westport alleged that the debtor had submitted more than 100 underlying claims for coverage.
The debtor filed for Chapter 11 bankruptcy on August 21, 2023, after approximately 537 lawsuits alleging childhood sexual abuse by clergy or others associated with it were filed. Westport filed its insurance-coverage complaint in bankruptcy court on October 8, 2025, and simultaneously moved under 28 U.S.C. § 157(d) to withdraw the case’s reference to the bankruptcy court. The Roman Catholic Archbishop of San Francisco filed a statement of non-opposition, while stating that it did not concede or admit the underlying claims or allegations in the coverage dispute.
Reasoning
A district court may permissively withdraw a bankruptcy-court reference when the motion is timely and there is good cause. Courts consider judicial efficiency, delay and costs, uniformity in bankruptcy administration, prevention of forum shopping, and related factors.
The court found the motion timely because Westport filed it mere minutes after filing the complaint. It also found good cause. The insurance dispute involved non-core state-law contract claims that existed independently of bankruptcy law and depended on the terms of a prepetition contract. The court concluded that the bankruptcy court lacked statutory and constitutional authority to enter a final judgment on those claims. Westport had also demanded a jury trial and did not consent to bankruptcy-court jurisdiction, so the bankruptcy court could not conduct that trial on the non-core claims.
The court further concluded that withdrawal would reduce potential delay and costs. It found no significant concerns about forum shopping or uniformity in bankruptcy administration because the district court was the court with authority to enter a final judgment on the claims at issue.
Disposition
The court granted Westport’s motion to withdraw the reference. The insurance-coverage dispute was therefore moved from the Bankruptcy Court to the district court. The order did not decide whether Westport’s policy provides coverage or whether Westport must defend or indemnify the Roman Catholic Archbishop of San Francisco.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.