Opposition Brief — Official Committee of Tort v. Dow Corning Corp., 117 S. Ct. 718 (1997) (No. 96-330)

A :

Nos. 96-330 & may, Supreme Court,

IN THE NOV 27 {99

Supreme Court of the United States.

OCTOBER TERM, 1996 aie is

>

OFFICIAL COMMITTEE OF TORT CLAIMANTS, Petitioner.

—Y,—

DOW CORNING CORPORATION, THE DOW CHEMICAL COMPANY, CORNING

INCORPORATED, BAXTER INTERNATIONAL INCORPORATED, MINNESOTA

MINING AND MANUFACTURING COMPANY, BRISTOL-MYERS SQUIBB

COMPANY AND MEDICAL ENGINEERING CORPORATION,

Respondents.

>

BREAST IMPLANT TORT CLAIMANTS REPRESENTED BY O’ QUINN,

KERENSKY, MCANINCH & LAMINACK,

Petitioners,

on

DOW CORNING CORPORATION, et ai.,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE SIXTH CIRCUIT

BRIEF IN OPPOSITION OF RESPONDENTS

BRISTOL-MYERS SQUIBB COMPANY AND

MEDICAL ENGINEERING CORPORATION

Hayden Smith

Counsel of Record

David J. Adler

MCCARTER & ENGLISH

Gateway Four

100 Mulberry Street

Newark, New Jersey 07102

(201) 622-4444

Counsel for Respondents

Bristol-Myers Squibb Company and

Medical Engineering Corporation

COUNTER-STATEMENT OF

QUESTIONS PRESENTED

1. Whether the decision of the United States Sixth Circuit

Court of Appeals in Lindsey v. O’Brien, Tanski, Tanzer &

Young Health Care Providers of Connecticut (In re Dow

Corning Corp.), 86 F.3d 482 (6th Cir. 1996), petition for cert.

filed, 65 U.S.L.W. 3167 (U.S. Aug. 28, 1996) (No. 96-330) is

reviewable by this Court in light of the present procedural

posture of the case?

2. Whether the decision of the United States Sixth Circuit

Court of Appeals in Lindsey v. O’Brien, Tanski, Tanzer

& Young Health Care Providers of Connecticut (In re Dow

Corning Corp.), 86 F.3d 482 (6th Cir. 1996), petition for cert.

filed, 65 U.S.L.W. 3167 (U.S. Aug. 28, 1996) (No. 96-330)

conflicts with the decisions of other Courts of Appeals

regarding the scope of “related to” jurisdiction under 28

U.S.C. § 1334(b)?

ii

RULE 29.6 LISTING

Pursuant to Supreme Court Rule 29.6, Respondent Bristol-

Myers Squibb Company states that it does not have a parent

company. The subsidiaries (other than wholly owned sub-

sidiaries) of Bristol Myers Squibb Company are:

Bristol-Myers Lion Ltd.

Bristol-Myers Squibb G.M.B.H.

Mead Johnson (Guangzhou) Ltd.

P.T. Squibb Indonesia

Synbiotics Limited

Laboratories UPSA SAS

RCS Realty Corporation

Sino American Shanghai Squibb Pharma Ltd.

Squibb Nigeria Limited

2309 Realty Corporation

Respondent Medical Engineering Corporation states that it

is a wholly owned subsidiary of Bristol-Myers Squibb Com-

pany. Medical Engineering Corporation does not have any

subsidiaries (other than wholly owned subsidiaries).

TABLE OF CONTENTS

PAGE

Counter-Statement of Questions Presented............ i

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Counter-Statement of the Case ...............eeceeeees l

Reasons for Denying the Writ...............---2000e5: 6

eee Err Fig dc bate cadius cévveveseeve cent 16

Appendices:

Appendix A: Opinion of the District Court (July 30,

SUED UU y iG aN es de adeORER baw e Mes ae css la

Appendix B: Order of the Sixth Circuit (September 24,

Ds Lube aind san shh bao es-cn he deans 9a

iv

TABLE OF AUTHORITIES

Cases

A.H. Robins Co. v. Piccinin, 788 F.2d 994 (4th Cir.),

cert. denied, 479 U.S. 876 (1986) .................

Aetna Life Insurance Co. v. Haworth, 300 U.S. 227

€) x 52 BERRI ARON Voy aie. IE yo NED gh

American Construction Co. v. Jacksonville, Tampa

& Key West Railway Co., 148 U.S. 372 (1893)...

Anderson v. Green, ____ U.S. ___, 115 S. Ct. 1059

CROP AD viccacknerschsbecksas ceaas eeeleeeeoeantas.

Brotherhood of Locomotive Firemen v. Bangor

& Aroostock R.R. Co., 389 U.S. 327 (1967)......

Celotex Corp. v. Edwards, ____ U.S. ___, 115 S. Ct.

BOSS CI OOS? ini bei Roi aan Bibvcdnchc aes

City Communications, Inc. v. City of Detroit, 888 F.2d

CORE CGC Civ. FORD 5 vos bcnncdsetcdskvieesceunsa dn

Dames & Moore v. Regan, 453 U.S. 654 (1981).......

Defunis v. Odegaard, 416 U.S. 312 (1974) ............

In re Dogpatch U.S.A., Inc., 810 F.2d 782 (8th Cir.

SORE Dk can ctheckescheaec ap snees <Pedeus shy Chgkewaues

SPP 5c ics eons s ahi birw nce tank thio Rak eredia asses

EDUDD isis vey he ckn cou \ Kos pueden tndneekereaukecess

12

10

13

10

BPMOE ickncinndcon cues bee pOeN CRAs e kel s tek eset 11, 15, 16

In re Fietz, 852 F.2d 455 (9th Cir. 1988) .............. 13

In re G.S.F. Corp., 938 F.2d 1467 (1st Cir. 1991) ..... 13

In re Gardner, 913 F.2d 1515 (10th Cir. 1990)........ 13

Hamilton Brown Shoe Co. v. Wolf Brothers & Co.,

PAU BSE CERES oii hie Wien ete dee dees 8

Hayburn’s Case, 2 Dail. 409 (1792) ................... 10

Iron Arrow Honor Society v. Heckler, 464 U.S. 67

CO ei Fa sae sk aa ks Gie BV 10

Kelly v. Nodine (In re Salem Mortgage Co.), 783 F.2d

CAG CORK SO as oa edi eB I ei cee eee es 5

In re Lemco Gypsum, Inc., 910 F.2d 784 (11th Cir.

SS ag FAT re on kia oi ee Orn os tees 13

Lewis v. Continental Bank Corp., 494 U.S. 472

2 RS Sagi ane SE SEN 2s bas at OPS a er ee an 10

Lindsey v. O’Brien, Tanski, Tanzer & Young Health

Care Providers of Connecticut (In re Dow

Corning Corp.), 86 F.3d 482 (6th Cir. 1996),

petition for cert. filed, 65 U.S.L.W. 3167

ERS cns PU deels BE sa ob rerta cece sis s ph oterney i passim

Liner v. Jafco, Inc., 375 U.S. 301 (1964).............. 10

Marbury v. Madison, 5 U.S. 137 (1803) ............... 6

In re Marcus Hook Development Park, Inc., 943 F.2d

MD COG GAN, BED or biber Velsuinevisdecsatisuceses 14

Metzenbaum v. FERC, 675 F.2d 1282 (D.C. Cir. 1982) 9

Muskrat v. United States, 219 U.S. 346 (1911)........ 10

Pacor, Inc. v. Higgins, 743 F.2d 984 (1984) .......... passim

vi

Powell v. McCormack, 395 U.S. 486 (1969)........... 9

Regional Rail Reorganization Act Cases, 419 U.S. 102

CUPPA cack bn cane vikek Cede OURS Luda keanaeeee 9

Rice v. Sioux City Cemetery, Inc., 349 U.S. 70 (1955) 7

Robinson v. Michigan Consolidated Gas Co., 918 F.2d

STP COR at, LPO isdencckueovebyeacseabaeadcnss 13

Roe-v. Wade, 4100.8. 1139 C1STS) eee POG ee ks 10

In re Silicone Gel Breast Implants Products Liability

Litig., MDL No. 926, 793 F. Supp. 1098 (J.P.M.L.

RDS) vcs sh iosdnscnviaghehiace<acdnbanedtidanteetis 2

Sosna v. fowa, 419. U.S. 393. C1973). Baa vicdicess 10

Southern Pacific Terminal Co. v. ICC, 219 U.S. 498

CEDARS sin (edsa sb Fein nkndes Beakuces Chelate eek 10

St. Pierre ¥. U.S. Sid U.B. Oh CUSSS) 1 vscckiaciacmskew 9-10

Sullivan v. Little Hunting Park, Inc., 396 U.S. 229

CT DGD) 5c cid vv Sos Peas VERDE IG een aoe RRR ee tae 14

Super Tire Engineering Corp. v. McCorkle, 416 U.S.

IS CUD Tapia 5 isd Sindh Civ esas aan ee 10

In re Turner, 724 F.2d 338 (2d Cir. 1983) ............. 15

United States v. Munsingwear, Inc., 340 U.S. 36

CTD SO a ii. divs ee PUas este sel wa ea eaNdeneeaceanea esses 10

United States v. Richardson, 418 U.S. 166 (1974) .... 6

Virginia Military Institute v. United States, 508 U.S.

DOG TT PR GE Kan dcndcvindsn veh nntaaeucoereansaees beens 8

Weinstein v. Bradford, 423 U.S. 147 (1975)........... 10

In re Wood, 825 F.2d 90 (Sth Cir. 1987) ............... 13

Vil

PAGE

Statutes

2B U.S.C. § 157(B)(S) «0... ccc cece cece scevecceeeeees passim

2B U.S.C: 6 1334(D) oi ic ccc tsacccunenssvesctssasesies ey ee

DE U.S.C. § 1334(C) ..... cc cecccccsccsccccssccccvcceeces 5

IB U.S.C. § 1367(a) .....cccccccwctecscccccvessesensenes 4

28 U.S.C. § 1452(a) .....ccsereceececcececcseerceeenees |

Other Authorities

Marcia Angell, Science on Trial: The Clash of

Medical Evidence and the Law in the Breast

Implant Case, (W.W. Norton Be £56. 1990). 6086s 1

C. Wright, A. Miller, & E. Cooper, 13 Federal Practice

and Procedure, § 3532 (1975)......-...seeseeeeee: 9

E: et

eas

COUNTER-STATEMENT OF THE CASE

Respondents Bristol-Myers Squibb Company (“BMS”) and

Medical Engineering Corporation (“MEC”; collectively,

“Respondents”) respectfully pray that the petitions of the

Official Committee of Tort Claimants (the “Tort Committee”)

and the breast implant claimants represented by O’ Quinn,

Kerensky, McAninch & Laminack (the “O’Quinn Claimants”;

collectively, the “Petitioners”) for writs of certiorari to review

the judgment and opinion of the United States Court of

Appeals for the Sixth Circuit in Lindsey v. O’Brien, Tanski,

Tanzer & Young Health Care Providers of Connecticut (In re

Dow Corning Corp.), 86 F.3d 482 (6th Cir. 1996), petition for

cert. filed, 65 U.S.L.W. 3167 (U.S. Aug. 28, 1996) (No. 96-

330) be denied.

A. Breast Implants and the Bankruptcy of

Dow Corning

Petitioners’ requests for certiorari arise from the chapter 11

bankruptcy proceedings of Dow Corning Corporation (“Dow

Corning” or the “Debtor”) pending in the United States

Bankruptcy Court for the Eastern District of Michigan, North-

ern Division (the “Bankruptcy Court”). Dow Corning, a finan-

cially healthy company, was driven into bankruptcy by an

avalanche of actions brought against it for injuries allegedly

sustained by recipients of silicone-gel breast implants.’

ba al

. As of May 15, 1995, the date on which it filed for bankruptcy,

Dow Corning had been named as a defendant in more than seven thou-

sand suits. Despite the avalanche of suits, and in contrast to the assertions

made by the Tort Committee on page 5 of its Petition, there has never

been any reliable scientific evidence to support the claim that silicone-

gel breast implants cause autoimmune or other systemic disease. See gen-

erally Marcia Angell, Science on Trial: The Clash of Medical Evidence

and the Law in the Breast Implant Case, (W.W. Norton & Co. 1996).

Like Dow Corning, Respondents and others? are named as

defendants in thousands of suits seeking damages for injuries

allegedly caused by silicone-gel breast implants. In many of

these suits, Dow Corning is named as a party defendant with

Respondents because: (i) it supplied silicone gel (or other sil-

icone components) to the Respondents; or (ii) the actions

involve implants manufactured by both MEC® (or one of its

predecessors) and Dow Corning. Additionally, in the vast

majority of these actions, the plaintiffs assert that Dow Corn-

ing and Respondents are joint tortfeasors.

B. Consolidation and the Global Settlement

Due to the rapidly growing number of breast implant suits

being commenced in federal courts, the Judicial Panel on

Multidistrict Litigation (the “MDL”), on June 25, 1992,

ordered the transfer of all breast-implant actions pending in

the federal courts to the Honorable Sam C. Pointer, Jr., Chief

Judge, United States District Court for the Northern Division

of Alabama (Southern Division) for the coordination of pre-

trial proceedings. /n re Silicone Gel Breast Implants Prods.

Liab. Litig., MDL No. 926, 793 F. Supp. 1098, 1100 (J.P.M.L.

1992). In transferring these actions, the MDL determined that

consolidation of all federal implant actions would avoid

duplication of discovery, prevent inconsistent pretrial rulings

and conserve the parties’ resources. /d.

2 Baxter International Incorporated, Baxter Healthcare Corpora-

tion (collectively, “Baxter”), Minnesota Mining and Manufacturing Com-

pany (“3M”), and Dow Corning’s parent corporations, The Dow

Chemical Company and Corning, Inc. (together, the “Shareholders”).

Collectively, Respondents, Baxter, 3M and the Shareholders are referred

to herein as the “Non-Debtors.”

3 BMS never designed, manufactured, marketed or sold any sili-

cone gel breast implants or any material or components for such

implants. Rather, since 1982 it has owned all of the shares of MEC,

which manufactured, sold and distributed breast implants from 1969 to

1991.

3

By Order dated April 1, 1994, Judge Pointer preliminarily

certified one class action for settlement purposes. On Septem-

ber 1, 1994, Judge Pointer approved a complex settlement

agreement (the “Global Settlement”) between members of the

Settlement Class and certain defendants that contemplated the

creation of a $4.25 billion settlement fund. Approximately

440,000 claimants registered as potential participants in the

Global Settlement. Because of: (i) the large number of opt

outs; (ii) the large number of claims against the settlement

fund: and (iii) the bankruptcy of Dow Corning, a revised set-

tlement program, which did not include Dow Corning, was

approved by Judge Pointer by Order dated December 22, 1995

(the “Revised Settlement Program”). Several appeals have

been taken from the Revised Settlement Program, which are

presently pending in the Eleventh Circuit.

Pursuant to the Revised Settlement Program, 3M, Baxter,

and Respondents will pay benefits to breast implant recipients

which are assured and not subject to further reduction. Breast

implant recipients are presently electing whether to accept the

Revised Settlement Program, which provides for extended

opt-out periods.

C. Removal of State Court Cases and The Transfer

Motion

On June 5, 1995, following Dow Corning’s filing for

bankruptcy, Respondents along with the Debtor, Baxter and

3M began removing pending state court cases in which one or

more plaintiffs in each suit had opted out of the Global Set-

tlement and in which Dow Corning was a party (the “Opt-Out

Actions”) pursuant to 28 U.S.C. § 1452(a). Thereafter, on

June 14, 1995, Respondents filed a motion in the United

States District Court for the Eastern District of Michigan,

Southern Division (the “District Court”) seeking, inter alia,

that the Court transfer the Opt-Out Actions to the District

Court pursuant to 28 U.S.C. § 157(b)(5) (the “Transfer

4

Motion”). The Debtor, Baxter and 3M also filed similar

motions.

On July 31, 1995, the District Court heard oral argument on

the Transfer Motion. By Order and Opinion dated September

12, 1995 (the “September 12th Order”), the District Court

denied the Transfer Motion. See_Jn re Dow Corning Corp.,

187 B.R. 934 (E.D. Mich. 1995).* The District Court denied

the Transfer Motion because it determined that no federal

jurisdictional existed, under either “related to” jurisdiction

pursuant to 28 U.S.C. § 1334(b) or supplemental jurisdiction

under 28 U.S.C. § 1367(a).

D. Reversal by the Sixth Circuit

Respondents appealed from the September 12th Order. On

April 9, 1996, the United States Court of Appeals for the

Sixth Circuit (the “Sixth Circuit”) issued an opinion and order

reversing the September 12th Order. 81 F.3d 635 (6th Cir.

1996). That opinion and order was subsequently withdrawn

and on June 3, 1996, the Sixth Circuit issued an amended

opinion and its mandate. Lindsey v. O’Brien, Tanski, Tanzer

& Young Health Care Providers of Connecticut (In re Dow

Corning Corp.), 86 F.3d 482 (6th Cir. 1996), petition for cert.

filed, 65 U.S.L.W. 3167 (U.S. Aug. 28, 1996) (No. 96-330)

(“Lindsey”). In Lindsey, the Sixth Circuit determined, inter

alia, that the claims pending against Non-Debtors were

“related to” the Debtor’s bankruptcy under 28 U.S.C.

§ 1334(b).° In reversing the September 12th Order, the Sixth

Circuit remanded the matter to the District Court to determine

* In a companion opinion, Jn re Dow Corning Corp, 187 B.R. 919

(E.D. Mich. 1995), the District Court refused to transfer the Opt-Out

Actions pending against the Shareholders.

* Because the Sixth Circuit determined that “related to” juris-

diction existed, it did not address whether the District Court erred in

determining that supplemental jurisdiction did not exist under 28 U.S.C.

§ 1367(a).

5

whether the Opt-Out Actions should be transferred to the Dis-

trict Court in accordance with 28 U.S.C. § 157(b)(S5). /d. at

498. In connection with that determination, the Sixth Circuit

noted that the District Court would be required to conduct an

abstention analysis:

to “determine in each individual case whether hearing it

would promote or impair efficient and fair adjudication

of the bankruptcy cases.”

Id. at 497 (quoting Kelley v. Nodine (In re Salem Mortgage

Co.), 783 F.2d 626, 635 (6th Cir. 1986)).

E. Abstention Order and Further Proceedings

Although barely referenced by Petitioners,® following Lind-

sey, the District Court, on July 30, 1996, entered an order

(the “Abstention Order”) abstaining en masse under 28 U.S.C.

§ 1334(c) from transferring the Opt-Out Actions.’ The

Abstention Order is reprinted at la-8a. Thereafter, on August

13, 1996, each of the Respondents filed a notice of appeal

with the District Court. On August 23, 1996, the Tort Com-

mittee filed a motion (the “Dismissal Motion”) to dismiss the

appeals. Respondents served their opposition papers on

September 3, 1996.

On September 24, 1996, the Sixth Circuit entered an order

directing that the Dismissal Motion be addressed in connec-

tion with the merits of the appeal. The Sixth Circuit order is

reprinted at 9a-10a. The Sixth Circuit also expedited the

6 {tis not until page 11 of its Petition that the Tort Committee

notes: “{I]t happens that in this case, following the reversal and remand,

the district court concluded that it should abstain. . .” Tort Committee

Pet. at 11. The O’Quinn Claimants relegate this important fact to a foot-

note. O’ Quinn Claimants Pet. 2-3 n.2.

7 ‘The Tort Committee filed its petition for certiorari on August 27,

1996,—a month after the District Court entered the Abstention Order.

The O’ Quinn Claimants served their original petition on August 29, 1996

and filed a corrected petition on November 12, 1996.

6

briefing schedule. As of November 19, 1996, the appeal has

been fully briefed. Respondents have not been notified of the

date for oral argument.

REASONS FOR DENYING THE WRIT

The Lindsey decision presents no important or novel legal

question which would justify the issuance of a writ of cer-

tiorari. Initially, due to the District Court’s decision to

abstain, the issues sought to be reviewed are not presently

justiciable. Because the Abstention Order has not yet been

reversed by the Sixth Circuit, Petitioners seek review of

issues that are at best not yet ripe for determination. At worst,

assuming the Sixth Circuit does not reverse the Abstention

Order, the petitions seek review of moot issues and the

issuance of an advisory opinion from the Court. In any event,

certiorari is not warranted at this time.

Moreover, contrary to Petitioners’ assertions, the Lindsey

decision neither conflicts with decisions of other Courts of

Appeals nor represents “an unprecedented expansion of

bankruptcy jurisdiction.” Tort Committee Pet. at 4. The

asserted “conflicts” are not genuine and simply reflect appli-

cations of the same or similar legal principles to different fac-

tual situations.

~ Certiorari Should Be Denied Because There Are

No Justiciable Issues Before the Court

Since Marbury v. Madison, 5 U.S. 137 (1803), the Court

has recognized that judicial power of the federal courts is lim-

ited to “cases or controversies” under Article III of the Con-

stitution. A “case or controversy” must be justiciable and not

be moot, a political question or a request for an advisory

opinion. See United States v. Richardson, 418 U.S. 166, 171

(1974). (citations omitted).

7

As Chief Justice Hughes explained in Aetna Life Ins. Co. v.

Haworth, 300 U.S. 227, 240-41 (1937),

A justiciable controversy is thus distinguished from a

difference or dispute of a hypothetical or abstract char-

acter; from one that is academic or moot. The contro-

versy must be definite and concrete, touching the legal

relations of parties having adverse legal interests. It must

be a real and substantial controversy admitting of spe-

cific relief through a decree of a conclusive character, as

distinguished from an opinion advising what the law

would be upon a hypothetical state of facts.

As demonstrated herein, while the issues raised by Peti-

tioners may be intellectually stimulating, there are no justi-

ciable issues to be determined in light of the Abstention

Order. Whether these issues will ultimately become justi-

ciable is wholly dependent upon the present appeal pending

before the Sixth Circuit.’ Regardless of the Sixth Circuit's

ultimate determination, certiorari should be denied at this

time. Rice v. Sioux City Cemetery, Inc., 349 U.S. 70, 74

(1955) (dismissing certiorari as improvidently granted, the

Court stated: “this Court does not sit to satisfy a scholarly

interest in such [abstract] issues”).

A. Petitioners Seek Review of an Interiocutory

Order

In Lindsey, the Sixth Circuit determined that the District

Court has subject matter jurisdiction over the Opt-Out

Actions and that transfer of the actions pending against the

Non-Debtors under 28 U.S.C. § 157(b)(5) is permissible.

Lindsey, 86 F.3d at 497; accord A.H. Robins Co. v. Piccinin,

788 F.2d 994 (4th Cir.), cert. denied, 479 U.S. 876 (1986).

The matter was then remanded to the District Court and there-

after the Abstention Order was entered.

8 As of November 19, 1996, the appeal was fully briefed. Respon-

dents have not been notified of the date for oral argument.

Initially, the Lindsey decision is an interlocutory order that

is not reviewable at this time. See Brotherhood of Locomotive

Firemen v. Bangor & Aroostock R.R. Co., 389 U.S. 327, 328

(1967) (certiorari denied because the Court of Appeals

remanded the case so the matter was not ripe for review by

the Supreme Court). In general, the Court does not exercise

certiorari jurisdiction prior to a lower court issuance of a final

judgment. See Virginia Military Institute v. United States, 508

U.S. 946 (1993); American Constr. Co. v. Jacksonville, Tampa

& Key West Ry. Co., 148 U.S. 372 (1893). In American Con-

str., Justice Gray noted:

Whether an interlocutory order may be separately

reviewed by an appellate court in the progress of the

suit, or only after and together with the final decree, is

matter of procedure rather than of substantial right; and

many orders made in the progress of a suit become quite

unimportant by reason of the final result or of interven-

ing matters. Clearly, therefore, this court should not

issue a writ of certiorari to review adecree. . . unless

it is necessary to prevent extraordinary inconvenience

and embarrassment in the conduct of the cause.

Id. at 384; see also Hamilton Brown Shoe Co. v. Wolf Bros. &

Co., 240 U.S. 251, 258 (1916) (“except in extraordinary cases,

the writ is not issued until final decree.”) (citation omitted).

B. The Issues Raised in the Petitions Are Not Ripe

Certiorari is not appropriate because the issues sought to be

reviewed are not ripe. As one Circuit Court has noted:

{the} [r]ipeness doctrine is drawn from both Article III

limitations on judicial power and discretionary reasons

of policy for refusing to exercise existing power. The

central concern of both power and discretion is that the

tendered case involves uncertain and contingent future

events that may not occur as anticipated, or indeed may

not occur at all.

9

Metzenbaum v. FERC, 675 F.2d 1282, 1289-90 (D.C. Cir. 1982)

(quoting from C. Wright, A. Miller & E. Cooper, 13 Federal

Practice and Procedure: Jurisdiction § 3532, at 237-38

(1975)).

Whether a decision is ripe for adjudication is “peculiarly

a question of timing.” Anderson v. Green, __ U.S. __, 115

S. Ct. 1059, 1060 (1995), quoting Regional Rail Reorgani-

zation Act Cases, 419 U.S. 102, 140 (1974). Ripeness

becomes an issue when a case is anchored in future events

that may not occur as anticipated, or at all. See Dames &

Moore v. Regan, 453 U.S. 654, 689 (1981). Underlying the

ripeness doctrine is the concept that courts should decide only

a “real, substantial controversy”, not a mere hypothetical

question. See City Communications, Inc. v. City of Detroit,

888 F.2d 1081, 1089 (6th Cir. 1989) (citation omitted).

In this case, the Abstention Order vitiated, at least for the

time being, any practical effect of the determination in Lind-

sey that Petitioners seek to have this Court review. The issues

raised in the Petitions ceased to be ripe when the District

Court abstained and will only become ripe again if the Sixth

Circuit reverses the Abstention Order and a final order is

entered granting the Transfer Motion—future contingencies

that may not occur. Accordingly, the issues raised by Peti-

tioners are presently not ripe for adjudication.

C. Should the Sixth Circuit not Reverse the Absten-

tion Order, the Issues Raised by Petitioners Are

Moot

If the Sixth Circuit were to affirm the Abstention Order (or

alternatively dismiss the appeals), the issues raised by the

Petitioners would be moot. A moot controversy is one “when

the issues presented are no longer ‘live’ or the parties lack a

cognizable interest in the outcome.” See Powell v. McCor-

mack, 395 U.S. 486, 496 (1969) (citation omitted). A moot

case is not a “case or controversy” under Article III of the

Constitution. St. Pierre v. U.S., 319 U.S. 41, 42 (1943) (“a

10

federal court is without power to decide moot questions or to

give advisory opinions which cannot affect the rights of liti-

gants in the case before it”); see also Lewis v. Continental

Bank Corp., 494 U.S. 472, 477 (1990): Iron Arrow Honor

Society v. Heckler, 464 U.S. 67, 70 (1983); Defunis v. Ode-

gaard, 416 U.S. 312, 319 (1974); Liner vy. Jafco, Inc., 375

U.S. 301, 306 n.3 (1964); United States v. Munsingwear, Inc.,

340 U.S. 36, 39 (1950).

Because a moot controversy does not contain “live” issues,

review will result in the issuance of an advisory opinion in

contravention of Article III of the Constitution. See Muskrat

v. United States, 219 U.S. 346, 362 (1911); Hayburn’s Case,

2 Dall. 409 (1792). The limited exception to the mootness

rule for cases that fall under the doctrine of “capable of rep-

etition, yet evading review” is inapplicable in this case. See

Southern Pacific Terminal Co. v. ICC, 219 U.S. 498, 515

(1911).

Although the O’ Quinn Claimants purport that this excep-

tion is applicable to the instant case, it is not. O’ Quinn

Claimants Pet. at 2-3. In order for an action “to be capable of

repetition, yet evading review”, two elements must be satis-

fied: (i) the challenged action must be in its duration too short

to be fully litigated prior to its cessation or expiration, and

(ii) there must be a reasonable expectation that the same com-

plaining party will be subjected to the same action again. See

Weinstein v. Bradford, 423 U.S. 147, 149 (1975); see also

Southern Pacific Terminal Co. v. ICC, 219 US. 498, 515

(1911). Assuming, arguendo, that the issues raised by Peti-

tioners are “capable of repetition”, they most certainly do not

evade review.® For example, if the Sixth Circuit were to

9

In cases where the Court has invoked the “capable of repetition

yet evading review” exception, the matter sought to be reviewed was of

a limited duration. See, e.g., Sosna v. lowa, 419 U.S. 393 (1975) (resi-

dency requirements); Super Tire Engineering Corp. v. McCorkle, 416

U.S. 115 (1974) (economic strikes): Roe v. Wade, 410 U.S. 113 (1973)

(pregnancy); Dunn v. Blumstein, 405 U.S. 330 (1972) (elections).

11

reverse and the Opt-Out Actions were to be transferred, the

issues would no longer be moot and the Court could consider

petitions for a writ of certiorari in the normal course. Simi-

larly, if the same parties were to be subjected to this treatment

again, it would be in the context of the transfer of the Opt-Out

Actions which would not be of such a limited duration so as

to avoid review. '°

In sum, the issues raised by the Petitioners are not presently

justiciable and certiorari should be denied.

The Decision in Lindsey Would Be The Same Under Any

Of The Tests For Determining “Related to” Jurisdiction

Even if the Court were to consider the issues raised in the

petitions in the context of a final decision, certiorari should

still be denied. Contrary to Petitioners’ assertions, the deci-

sion in Lindsey is not in conflict with Pacor, Inc. v. Higgins,

743 F.2d 984 (1984) or In re Fedpak Systems, Inc., 80 F.3d

207 (7th Cir. 1996). Indeed, in issuing its ruling, the Sixth

Circuit explicitly reiied on the test for determining “related

to” jurisdiction set forth in Pacor."'

10 The Tort Committee acknowledges this fact when it improperly

characterizes the motives of the Non-Debtors. See Tort Committee Peti-

tion at 11 (noting that if the Opt-Out Actions were transferred, they

would continue for an indefinite period).

11 Similarly, Lindsey does not represent an “enormous destructive

change in the American Tort System” or “violate[ }] basic principles allo-

cating tort jurisdiction in our federal system” as the Tort Committee

asserts. Tort Committee Pet. at 9. In A.H. Robins v. Piccinin, 788 F.2d

994, cert. denied, 479 U.S. 876 (1986), the Fourth Circuit considered

similar issues and determined that actions pending agains! non-debtors

were subject to transfer to the district where the Robins case was pend-

ing. Petitioners do not assert that a conflict among the Circuits exists

with respect to the proper interpretation of 28 U.S.C. § 157(b)(5).

Accordingly, certiorari is not appropriate as to that issue.

12

“Related to” jurisdiction stems from Section 1334(b) of

Title 28 which provides, in relevant part, that:

Notwithstanding any Act of Congress that confers exclu-

sive jurisdiction on a court or courts other than the dis-

trict courts, the district courts shall have original but not

exclusive jurisdiction of all civil proceedings arising

under title 11, or arising in or related to cases under title

11.

As this Court has previously noted, the scope of “related to”

jurisdiction is not defined, but Congress intended it to be

broad:

Congress did not delineate the scope of ‘related to’. . .

jurisdiction, but its choice of words suggests a grant of

some breadth. The jurisdictional grant in § 1334(b) was

a distinct departure from the jurisdiction conferred under

previous acts, which had been limited to either posses-

sion of property by the debtor or consent as a basis for

jurisdiction. . . . We agree with the views expressed by

the Court of Appeals for the Third Circuit in Pacor, Inc.

v. Higgins, 743 F.2d 984 (1984), that ‘Congress

intended to grant comprehensive jurisdiction to the

bankruptcy courts so that they might deal efficiently

and expeditiously with all matters connected to the

bankruptcy estate,’ and that the ‘related to’ language

of § 1334(b) must be read to give district courts juris-

diction over more than simple proceedings involving

the property of the debtor or the estate.’

Celotex Corp. v. Edwards, einlthy MO? cline RAD Bs OF, 1493.

1498-99 (1995) (emphasis supplied).

Petitioners’ assertion that Lindsey conflicts with Pacor is

unfounded. Initially, in determining that the District Court

had “related to” jurisdiction over the Opt-Out Actions and

that such actions were subject to transfer under 28 U.S.C.

13

§ 157(b)(5), the Sixth Circuit relied explicitly on the test set

forth in Pacor:

As stated in [Pacor], the “usual articulation of the test

for determining whether civil proceeding is related to

bankruptcy is whether the outcome of that proceeding

could conceivably have any effect on the estate being

administered in bankruptcy.” Pacor, 743 F.2d at 994. An

action is “related to bankruptcy if the outcome could

alter the debtor’s rights, liabilities, options, or freedom

of action (either positively or negatively) and which in

any way impacts upon the handling and administration of

the bankrupt estate.” /d.

* * * *

Our Circuit adopted the Pacor test for determining

whether a civil proceeding is “related to” a bankruptcy

proceeding under Section 1334(b) in Robinson, 918 F.2d

at 583... . . The majority of our sister circuits have

likewise adopted the Pacor test for “related to” juris-

diction.

Id, at 489 (citations omitted). Virtually every Court of Appeals

has embraced the test enunciated in Pacor, sometimes with

minor modifications. '?

While Lindsey explicitly relied on Pacor"’, Petitioners seem

to take issue because of the difference in the holdings of these

two cases. Initially, to the extent that Petitioners seek redress

12 See In re G.S.F. Corp., 938 F.2d 1467, 1475 (1st Cir. 1991); A.H.

Robins Co. v. Piccinin, 788 F.2d 994, 1002, (4th Cir.) cert. denied, 479

U.S. 876; In re Wood, 825 F.2d 90, 93 (Sth Cir. 1987); Robinson v. Michi-

gan Consol. Gas Co., 918 F.2d 579, 583-84 (6th Cir. 1990); In re Dog-

patch U.S.A.,Inc., 810 F.2d 782, 786 (8th Cir. 1987); In re Fietz, 852 F.2d

455, 457 (9th Cir. 1988); In re Gardner, 913 F.2d 1515, 1518 (10th Cir.

1990); In re Lemco Gypsum, Inc., 910 F.2d 784, 788 (11th Cir. 1990).

‘> Consistent with Pacor, the Sixth Circuit recognized that “related

to” jurisdiction is not limitless. Jd. at 490.

14

from the Court because they are displeased with the result in

Lindsey, certiorari jurisdiction should not be exercised for the

“the benefit of the particular litigants”, but instead for the set-

tlement of [issues] of importance to the public, as distin-

guished from . . . the parties.” Sullivan v. Little Hunting

Park, Inc., 396 U.S. 229, 250 (1969) (Harlan, J. dissenting)

(citations omitted); see also Sup. Ct. R. 10 (“[a] petition for

a writ of certiorari is rarely granted when the asserted error

consists of . . . the misapplication of a properly stated rule of

law.”).

Moreover, the Tort Committee seems to suggest that a def-

inite finding of liability is required under the Pacor test. Tort

Committee Pet. at 14. Such a finding is not required:

A key word in [the] test is “conceivable.” Certainty, or

even likelihood is not a requirement. Bankruptcy juris-

diction will exist so long as it is possible that a pro-

ceeding may impact on “the debtor’s rights, liabilities,

options, or freedom of action” or the “handling and

administration of the bankrupt estate.”

In re Marcus Hook Dev. Park, Inc., 943 F.2d 261, 264 (3d Cir.

1991) (quoting Jn re Smith, 866 F.2d 576 (3d Cir. 1989)) (other

citations omitted). Finally, the Sixth Circuit explained the dif-

ference in the outcome between Lindsey and Pacor:

The potential for Dow Corning’s being held liable to the

non-debtors in claims for contribution and indemnifi-

cation, or vice versa, suffices to establish a conceivable

impact on the estate in bankruptcy. Claims for indem-

nification and contribution, whether asserted against or

by Dow Corning, obviously would affect the size of the

estate and the length of time the bankruptcy proceedings

will be pending, as well as Dow Corning’s ability to

resolve its liabilities and proceed with reorganization. In

addition, we believe there is a qualitative difference

between the single suit involved in Pacor and tie over-

15

whelming number of cases asserted against Dow Corning

and the non-debtor defendants in this case.

Id. at 494, Accordingly, Lindsey does not conflict with Pacor.

In addition, Petitioners assert that Lindsey “significantly

diverges” from In re Fedpak Systems, Inc., 80 F.3d 207 (7th

Cir. 1996). Tort Committee Pet. at 12. In fact, the result in

Lindsey would be no different if the test in Fedpak were

applied.'*

In Fedpak, the debtor Fedpak Systems, Inc. (“Fedpak”) was

the developer and patent holder on a frozen dessert machine.

Id. at 209. Shortly after filing for bankruptcy, Fedpak com-

menced a breach of contract action against Stanley Jones

(“Jones”). Id. The Fedpak/Jones litigation was subsequently

settled on appeal and Fedpak thereafter transferred all of its

intellectual property rights in the machines to Polar Express

International, Inc. (“Polar Express”) in exchange for royalty

payments. /d. at 210. Years later, at the request of Polar

Express, Fedpak filed a motion seeking clarification of the

findings of facts and conclusions of law issued by the

bankruptcy court in the Fedpak/Jones Litigation.

On appeal, the Seventh Circuit noted that Fedpak did not

have standing to request such an order. /d. at 212. Addition-

ally, the Court noted that the bankruptcy court lacked juris-

diction to determine the rights of Jones and Polar Express to

property outside of the Court’s control. /d. at 213. In so rul-

ing, the court set forth its test for determining jurisdiction:

“[a] case is related to a bankruptcy case when the dispute

‘affects the amount of property available for distribution [i.e.,

" Equally unavailing is the assertion of the O’ Quinn Claimants

that the decision in Lindsey conflicts with that of In re Turner, 724 F.2d

338 (2d Cir. 1983) and Jn re Lemco Gypsum, Inc., 910 F.2d 784 (11th Cir.

1990). In Lemco, the Eleventh Circuit stated: “[wJe join the majority of

the circuits that have adopted the Pacor formulation.” Jd. at 788. More-

over, the Opt-Out Actions have a “significant connection” with the

Debtor’s bankruptcy as required under Turner. Turner, supra, 724 F.2d

at 341.

16

the debtor's estate] or the allocation of property among cred-

itors.’ ” /d. at 213-14 (citations omitted).

Despite the Petitioners’ assertions to the contrary, the Fed-

pak test does not “significantly diverge” from that of Lindsey.

Indeed, in the instant case, application of the Fedpak test

would not have changed the result. Unlike the thousands of

claims pending against the Debtor, the claim in Fedpak was

but a single claim. Moreover, as the Sixth Circuit noted, the

claims for indemnification and contribution whether asserted

by or against the Debtor will undoubtedly “affect the size of

the estate”—i.e., the amount of property available for dis-

tribution—as well as the Debtor's “ability to resolve its lia-

bilities and proceed with reorganization”—i.e., allocation of

property among creditors. See Lindsey, 86 F.3d at 494.

In sum, there is no conflict among the Circuits with respect

to “related to” jurisdiction and Petitioners’ requests for cer-

tiorari should be denied.

CONCLUSION

The petitions for writs of certiorari should be denied.

Respectfully submitted,

Hayden Smith

Counsel of Record

David J. Adler

MCCARTER & ENGLISH

Gateway Four

100 Mulberry Street

Newark, New Jersey 07102

(201) 622-4444

Counsel for Respondents Bristol-

Myers Squibb Company and

Medical Engineering Corporation

Dated: November 26, 1996

APPENDIX

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Appendix “A”

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

Case No. 95-CV-72397-DT

HON. DENISE PAGE Hoop

In Re:

Dow CORNING CORPORATION,

Debtor.

MEMORANDUM OPINION AND ORDER ON REMAND

REGARDING SECTION 1334(c) ABSTENTION

I. INTRODUCTION:

This matter is before the Court on remand from the United

States Court of Appeals for the Sixth Circuit. /n re: Dow

Corning Corporation, Nos. 95-2034/2082/2084/2106/2107,

86 F.3d 482 (6th Cir. 1996) (Amended). This Court previously

entered an order finding that it did not have subject matter

jurisdiction over the tort claims against the nondebtor defen-

dants pursuant to 28 U.S.C. § 157(b)(5). The Sixth Circuit

reversed this Court’s determination on this issue and found

that this Court had subject matter jurisdiction over the tort

claims pending against the nondebtor defendants pursuant to

28 U.S.C. § 157(b)(5). The Sixth Circuit remanded this case

2a

on the issue of whether or not this Court should abstain from

the tort claims against the nondebtors pursuant to 28 U.S.C.

§ 1334(c)(1) and/or (2).

II. ANALYSIS:

A. Whether this Court must abstain or, alternatively,

exercise its discretion to abstain pursuant to 28

U.S.C. § 1334(c).

1. Mandatory Abstention.

The Sixth Circuit has concluded that this Court has “related

to” jurisdiction pursuant to 28 U.S.C. § 1334(b) over the

actions pending against the nondebtors Dow Chemical, Corn-

ing Incorporated, Minnesota Mining, Baxter and Bristol-

Myers Squibb in nonbankruptcy forums nationwide. /n re

Dow Corning Corp., supra at 494. In a section 157(b)(5)

motion, an abstention analysis is required. /n re Pan Ameri-

can Corp., 950 F.2d, 839, 844 (2nd Cir. 1991); In re Dow

Corning Corp., supra at 497. The Tort Claimants’ briefs and

other claimants’ objections and responses to the nondebtors’

motions under Section 157(b)(5) requested this Court to

abstain under 28 U.S.C. § 1334(c).

Section 1334(c) qualifies Section 1334(b)’s broad grant of

jurisdiction. Jn re Dow Corning Corp. at 497. There are two

types of abstention under Section 1334(c): discretionary

abstention under 28 U.S.C. § 1334(c)(1) and mandatory

abstention under 28 U.S.C. § 1334(c)(2). Id. Mandatary

abstention will be addressed first.

In order for mandatory abstention to apply, a proceeding

must: 1) be based on a state law claim or cause of action; 2)

lack a federal jurisdictional basis absent the bankruptcy; 3) be

commenced in a state forum of appropriate jurisdiction; 4) be

capable of timely adjudication; and 5) be a non-core pro-

ceeding. /d.

As to the first factor, the claims and causes of action at

issue against the nondebtors are personal injury tort claims

3a

which are essentially state law claims. Addressing the second

factor, this Court notes that the Sixth Circuit held that this

Court has “related to” bankruptcy jurisdiction over the non-

debtors. The personal injury tort actions against the non-

debtors are not proceedings which need a determination under

the bankruptcy laws and do not arise in a bankruptcy case.

Absent the bankruptcy of the debtor in this matter, this Court

would lack federal jurisdiction over the actions against the

nondebtors.' With respect to the third factor, there have been

no allegations that the actions against the nondebtors have not

been commenced in a state forum of appropriate jurisdiction.

Satisfying the fourth factor, the parties have informed the

Court that there are numerous cases ready for trial against the

nondebtors. Furthermore, the Honorable Sam C. Pointer, Jr. in

his March 19, 1996 (Order 29) and April 16, 1996 (Order

29B) orders and the Multidistrict Litigation Panel’s April 10,

1996 Conditional Remand Order, indicate there are numerous

cases against the nondebtors which are indeed ready for trial.

Considering the fifth factor, the Court must determine

whether the actions against the nondebtors are non-core pro-

ceedings. There are two categories of core proceedings: pro-

ceedings “arising under” title 11 and proceedings “arising in”

title 11. Jn re Harris Pine Millis, 44 F.3d 1431, 1435 (9th Cir.

1995), cert. denied, 115 S.Ct. 2555 (1995). Proceedings “aris-

ing under” title 11 “involve a cause of action created or deter-

mined by a statutory provision of title 11.” /d. Proceedings

“arising in” title 11 are a reference to those “administrative”

The only cases against the nondebtors over which this Court

would have jurisdiction, sitting in the Eastern District of Michigan, are

those cases that involve complete diversity. The Court notes that most of

the cases involving the nondebtors also include the Debtor Dow corning

Corporation which would defeat this Court's diversity jurisdiction. (See

the Court’s Discretionary Abstention analysis, infra.) The Court notes

that mandatory abstention also apply to removed cases. William v. Shell

Oil Co., 169 B.R. 684, 690-691 (S.D. Cal. 1994). The Court further notes

that absent the bankruptcy, the Court has no jurisdiction over the cases

against the nondebtors where the claims arose outside of the Eastern Dis-

trict of Michigan.

4a

matters that arise only in bankruptcy cases and are not based

on any right expressly created by title 11, but nevertheless,

would have no existence outside of the bankruptcy.)/d. Sec-

tion 157(b)(2) provides a nonexclusive list of proceedings

which are core proceedings. Non-core proceedings are only

“related to” a case under title 11. /d. at 1435. A Non-core pro-

ceeding “does not invoke a substantive right created by the

federal bankruptcy law and is one that could exist outside of

bankruptcy.” /d.

Personal injury tort or wrongful death claims are excluded

from the catalog of core proceedings by 28 U.S.C.

§ 157(b)(2)(B) and (QO) which state in pertinent part:

(b)(2) Core proceedings include, but are not limited

to—

cad * *

(B) allowance or disallowance of claims against

the estate or exemptions from property of the estate,

and estimation of claims or interests for the pur-

poses of confirming a plan under chapter 11, 12 or

13 of title 11 but not the liquidation or estimation

of contingent or unliquidated personal injury tort

or wrongful death claims against the estate for pur-

poses of distribution in a case under title 11;

* * *

(O) other proceedings affecting the liquidation of

assets of the estate or the adjustment of the debtor-

creditor or the equity security holder relationship,

except personal injury tort or wrongful death

claims.

28 U.S.C. § 157(b)(2)(B) and (QO) (emphasis added). Jn re

Hughes, 98 B.R. 115, 118 (D.C. 1988). The actions against

the nondebtor defendants are non-core proceedings under 28

U.S.C. § 157.

5a

Section 157(b)(4) provides that “[n]on-core proceedings

under § 157(b)(2)(B) of title 28 [liquidation of personal injury

tort or wrongful death cases], shall not be subject to the

mandatory abstention provisions of Section 1334(c)(2).” In re

Pan Am, 950 F.2d at 845; 28 U.S.C. § 157(b)(4). As indicated

above, the non-core proceedings included in Section

157(b)(2)(B) are “liquidation or estimation of contingent or

unliquidated personal injury tort or wrongful death claims

against the estate for purposes of distribution in a case under

title 11.” (Emphasis added). Here, the personal injury and/or

wrongful death tort actions are not “against the estate” of the

debtor but against the nondebtors. Consequently, the non-core

proceedings and actions against the nondebtors are not

exempt from mandatory abstention under Section 157(b)(4).

Moreover, 28 U.S.C. § 1334(c)(2) provides for mandatory

abstention in cases involving state law claims for which the

sole basis of bankruptcy jurisdiction is “related to” jurisdic-

tion. Celotex Corp. v. Edwards, 115 S.Ct. 1493, 1506, note 10

(1995) (Stevens, J., dissenting). In the instant case, the Sixth

Circuit held that this Court had Section 1334(b) or “related

to” jurisdiction over the actions pending against the non-

debtors in nonbankruptcy forums nationwide. Jn re Dow

Corning, supra at 494. Based on the above, the court finds

that the four factors calling for mandatory exemption under

Section 1334(c)(2) have been met.

2. Discretionary Abstention.

Alternatively, the Court exercises its discretion to remand

pursuant to 28 U.S.C. § 1334(c)(1). Section 1334(c)(1) pro-

vides:

Nothing in this section prevents a district court in the

interest of justice, or in the interest of comity with State

courts or respect for State law, from abstaining from

hearing a particular proceeding arising under title ll or

arising in or related to a case under title 11.

6a

In Jn re White Motor Credit, 761 F.2d 270 (1985), the Sixth

Circuit noted:

. . . federal courts should be hesitant to exercise juris-

diction when state issues substantially predominate,

whether in terms of proof of the scope of the issues

raised, or of the comprehensiveness of the remedy

sought.

Id. at 274 (quotations omitted). Here, the personal injury/tort

claims against the nondebtors are predominantly state law

claims. The proof and scope of issues in dispute and the com-

prehensiveness of the remedies sought varies state to state.

The Sixth Circuit in Jn re White Motor further noted that:

. .in large bankruptcy cases with hundreds or even

thousands of tort litigants beating on the door of one

federal judge, . . . at least judicial economy and expe-

ditiousness, may depend on the court’s authority to refer

cases to other courts. Since the 1984 Bankruptcy Act

prevents reference of these tort cases to bankruptcy

courts, as in the past, it makes good sense to give the

district courts wide latitude in referring the cases

through abstention to other courts.

Id. The Court finds that discretionary abstention from the

cases against the nondebtors would best serve the interest of

justice and comity. Waiting until the estimation and confir-

mation of a plan of reorganization before the actions against

the nondebtors are liquidated would not result in a more pre-

cise estimation of the assets needed by the debtor’s estate to

cover any indemnification and contribution claims against the

debtor’s estate. The estimation of any possible indemnifica-

tion and contribution claims by the nondebtors against the

debtor’s bankruptcy estate would not be any different than if

the cases against the nondebtors proceed to trial at this stage.

To the contrary, as the various trials proceed against the non-

debtors, a clearer picture would emerge as to whether the non-

7a

debtors would have any indemnification or contribution

claims against the debtor’s estate.

The Sixth Circuit opinion addresses the Joint Insurance

issue between Dow Corning, Dow Chemical and Corning

Incorporated finding that the Court had “related to” juris-

diction based on the Joint Insurance between the parties. The

Sixth Circuit opinion does not address the Joint Insurance

issue as it pertains to the abstention issue. This Court

addresses this issue as it relates to the interest of justice and

comity issues which must be addressed in an analysis of dis-

cretionary abstention. Although Dow Chemical has apparently

notified insurers that it is asserting claims against the jointly-

held policies, it has been argued that as to Dow Chemical, the

joint policies are in fact excess policies and that Dow Chem-

ical has sufficient primary insurance. (Ex. A, p.5, Official

Committee of Tort Claimants’ Brief, filed June 7, 1996). The

Sixth Circuit’s opinion addresses the insurance issue from the

point of view of whether the Debtor’s estate will have suffi-

cient resources. The Debtor itself has not put forth proof that

its estate would be dissipated based upon the “threat” posed

to those insurance policies by Dow Chemical and Corning

Incorporated. In The Matter of Zale Corp., 62 F.3d 746 (Sth

Cir. 1995), the Fifth Circuit found that even if the bankruptcy

court had “related to” jurisdiction over certain insurance poli-

cies with indemnification contracts, a nondebtor should not be

shielded by the powers of the bankruptcy court. /d. at 760-

761. The Bankruptcy Code discharges the Debtor’s liabilities

and not those owed by third parties. /d. at 760, notes 42, 43

and 44; 11 U.S.C. §524(e). If the Court does aid abstain from

the tort claims against the nondebtors, the tort claims against

the nondebtors would effectively be determined by this Court

which would be contrary to 11 U.S.C. §524(e). Section 524(e)

does not allow the Bankruptcy Code to be used to discharge

the debts of nondebtors. /d., at 760, notes 42, 43 and 44. The

Court finds that the “threat” posed to the insurance policies

by the nondebtors does not overcome factors in favor of dis-

cretionary abstention. Specifically, the Court finds the inter-

8a

ests of justice and comity weigh in favor of discretionary

abstention.

III. CONCLUSION:

This court finds that the cases against the nondebtors are

subject to mandatory abstention under 28 U.S.C. § 1334(c)(2).

Alternatively, the Court finds that in the interest of justice,

comity and judicial economy, it will exercise its discretion to

abstain from the cases against the nondebtors under 28 U.S.C.

§ 1334(c)(1)

Accordingly,

IT 1S ORDERED that the actions against the nondebtor

defendants are subject to mandatory abstention under 28

U.S.C. § 1334(c)(2); alternatively,

IT IS ORDERED that the Court will exercise its discretion to

ABSTAIN from the cases against the nondebtors under 28

U.S.C. § 1334(c)(1).

/s/

DENISE PAGE Hoop

United States District Judge

DATED: Jul 30, 1996

9a

Appendix “B”

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

Nos. 96-2005/2008/2009/2010/2011/2012/2013

HEIDI LINDSEY, Rep. of Charlotte Mahum

and Cheryl Kahn, et al.,

Plaintiff,

TORT CLAIMANT, Official Committee of

Tort Claimants; et al,

Plaintiff-Appellees,

a |

O’ BRIEN, TANSKI, TANZER AND YOUNG HEALTHCARE

PROVIDERS OF CONNECTICUT; et al,

Defendants,

Dow CORNING CORPORATION (96-2009); THE Dow

CHEMICAL COMPANY (96-2005); BAXTER INTERNATIONAL

INCORPORATED (96-2011); MINNESOTA MINING AND

MANUFACTURING COMPANY (96-2010); BRISTOL-MYERS

SQUIBB COMPANY (96-2013); and MEDICAL ENGINEERING

CORPORATION (96-2012),

Defendant-Appellant.

5

|

10a

Before: MARTIN and BATCHELDER, Circuit Judges;

and WISEMAN, District Judge.*

ORDER

These appeals are from the district court’s memorandum

opinion and order regarding abstention pursuant to this

court’s remand. The Official Committee of Tort Claimants

moves to dismiss the appeals, and the various appellants

respond in opposition. The jurisdictional issue shall be argued

along with the merits of the appeals.

It is ORDERED that the clerk enter an expedited briefing

schedule in this matter. Upon completion of briefing, the

cases shall be submitted for argument upon the briefs and the

motion to dismiss.

ENTERED BY ORDER OF THE COURT

/s/

Clerk

ag The Honorable Thomas A. Wiseman, Jr., United States District

Judge for the Middle District of Tennessee, sitting by designation.