# Petition for Writ of Certiorari — Official Committee of Tort v. Dow Corning Corp. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386013_1173%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1997 - **Citation:** 522 U.S. 977 ## Text FILE D / us 4 1997 No. A Ki _* OFFICE OF THE CLENT IN THE Supreme Court of the United States OCTOBER TERM, 1997 aaa OFFICIAL COMMITTEE OF TORT CLAIMANTS, Petitioner, sail cies DOW CORNING CORPORATION, THE DOW CHEMICAL COMPANY, and CORNING INCORPORATED, Respondents. ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT PETITION FOR A WRIT OF CERTIORARI MARVIN E. FRANKEL (Counsel of Record) Kenneth H. Eckstein Jeffrey S. Trachtman Kramer, Levin, Naftalis & Frankel 919 Third Avenue New York, New York 10022 (212) 715-9100 Attorneys for the Official Committee of Tort Claimants i QUESTIONS PRESENTED 1. Whether a court of appeals may review on mandamus a decision ordering mandatory abstention with respect to claims against nondebtor defendants in light of the proscription against appellate review contained in 28 U.S.C. § 1334(d). Va Whether 28 U.S.C. § 157(b)(5) empowers a district court in which a Chapter 11 bankruptcy case is pending against a tortfeasor debtor corporation to transfer to itself, from state and federal courts throughout the country, cases pending against alleged joint tortfeasors that are not debtors in the bankruptcy. il PARTIES TO THE PROCEEDINGS BELOW In addition to the parties listed in the caption, the following parties participated in proceedings in the Sixth Circuit: Heidi Lindsey; John M. O’Quinn; Johnson County, Texas, Plaintiffs; Breast Implant Tort Claimants Represented by John O’Quinn; Office of the United States Trustee; MDL Panel; Baxter Healthcare Corp. and Baxter Int’l, Inc.; Minnesota Mining and Mfg. Co.; Bristol-Myers Squibb Co. and Medical Engineering Corp.; California Plaintiffs’ Steering Committee, as amicus curiae; Official Committee of Unsecured Creditors, as Intervenor. ili TABLE OF CONTENTS Page QUESTIONS PRESENTED ..............__. i PARTIES TO THE PROCEEDINGS BELOW ...___- ii TABLE OF CONTENTS................__. ili TABLE OF AUTHORITIES..............__. iv OPINIONS BELOW .................. 2 siete, 3 STATUTES INVOLVED ..............___ 3 STATEMENT OF THECASE ..........____ 3 REASONS FOR GRANTING THE WRIT ...___ 7 ii 18 iV TABLE OF AUTHORITIES Cases: Page A.H. Robins Co. v. Piccinin, 788 F.2d 994 (4th Cir. 1986) ............ 16, 17 In re Dow Corning Corp., 187 B.R. 919 (.D. Mich. 1995) ............. 2 EEOC V. K-Mart Corp., 694 F.2d 1055 (6th Cir. 1982) ............. 13 Gravitt v. Southwestern Bell Telephone Co., SORES, Tee aeee ss ee ee ee RS 9 Lindsey v. Dow Chemical Co. (In re Dow Corning Corp.), 113 F.3d 565 (6th Cir. 1992) . . 7, 10 Lindsey v. O’Brien, Tanski, Tanzer & Young Health Care Providers (In re Dow Corning Corp.), 86 F.3d 482 (6th Cir. 1996), cert. denied, 117 S. Ct. TI6 GPP) ww wc. 6 National R. Passenger Corp. v. National Assoc. of R. Passengers, 414 U.S. 453 (1974) .......... 10 Official Committee of Tort Claimants v. Dow Corning Corporation (In re Dow Corning Corp.), 117 S. Ct. 718 (1997) .... 2, 14n4 Vv Pierpoint v. Barnes, $4 F.3q 813 (2d Cir. 1996), cert. denied, 117 S. Ct. 1691 (1997)... 9 Sheet Metal Workers’ Int’] Assoc. y. Carter, 450 U.S. 949 Re th ee eo ae en 13 In re Silicone Gel Breast Implants Prods. Liab. Litig., 887 F. Supp. 1455 (N.D. Ala. eee... 4 Thermtron Prods., Inc. y. Hermansdorfer, 423 U.S. 336 oii ME Re 8 &n.J 9,12n2 Things Remembered, Inc. v. Petrarca, 116 S. Ct. 494 ROE 5 Sol ed ee 9, 12 United States y. Rice, 327 U.S. 742 ( ete te 9 In re United States Brass Corp., 110 F.3d 126] (7th Cir. Sains Se ee 9 In re United States Lines, 128 B.R. 339 (S.D.N.Y. mee Sic ws deo 15 Will v. Calvert Fire Ins. ca. 437 U.S. 655 ii, 13 n.3 Statutes and Legislative Materials: 28 U.S.C. § POOP nt rc ae Oe Passim 28 U.S.C. § TOM <5. 5 shi 3 vi ae Uae. 6 Se 6k ee ee Oe eee 6 20 U4. § Tse ab eee see 3 28 U.S.C. © Eee: Sb a <0 e ee eee passim te U.S... §- AS. i. 4 ka awe eee 16 a US. = 3607 @) «..4.< cae ea eee 8 & n.1 28 U.S.C. §1447(d) .............. 8,12 &n.2 28 U.S.A. § P05 ov cs eae 8,9, 10, 12 All Wrias Act, Z6 U.S.C. § G08 3 05 se oes 6, 10 136 Cong. Rec. $17570-02, Oist Come., 26: DOB. ook a os a eee eae 12 Other Authorities: Richard B. Sobol, Bending the Law, The Story of the Dalkon Shield Bankruptcy (1991) .......... 16 No. 97- —_—_ IN THE SUPREME COURT OF THE UNITED STATES October Term, 1997 OFFICIAL COMMITTEE OF TORT CLAIMANTS, Petitioner, -V.- DOW CORNING CORPORATION , THE DOW CHEMICAL COMPANY, and CORNING INCORPORATED, Respondents. ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT PETITION FOR A WRIT OF CERTIORARI Petitioner, the Official Committee of Tort Claimants (the "Tort Committee") of Dow Corning Corporation ("Dow Corning" or the "Debtor"), petitions for a writ of certiorari to review the decision of the United States Court of Appeals for the Sixth Circuit issued on May 8, 1997. The Sixth Circuit reversed the holding of the United States District Court for the Eastern District of Michigan ordering mandatory and discretionary abstention with respect to state law tort claims pending against nondebtor corporate defendants that the Debtor had sought to transfer to the District Court overseeing its bankruptcy. Review is sought 2 of the holding that the Court of Appeals had subject matter jurisdiction to issue a writ of mandamus reversing the abstention decision notwithstanding the provision of 28 U.S.C. § 1334(d) that decisions granting abstention are "not reviewable by appeal or otherwise by the court of appeals." The Tort Committee also seeks review of the Sixth Circuit’s underlying holding that 28 U.S.C. § 157(b)(5) permits transfer of claims against nondebtors. OPINIONS BELOW The District Court’s unreported decision ordering mandatory and discretionary abstention for all pending nondebtor cases was issued on July 30, 1996 and is reprinted at 13a-20a. The Sixth Circuit’s May 8, 1997 decision granting mandamus and reversing the July 30 decision, reprinted at la-12a, is reported at 113 F.3d 565. The District Court previously issued two opinions on September 12, 1995 that were the subject of earlier appeals to the Sixth Circuit. The one relevant here denied on jurisdictional grounds Dow Corning’s motion to transfer claims pending against its corporate parents, Dow Chemical Company ("Dow Chemical") and Corning Incorporated ("Corning"). It is reprinted at 49a-76a and reported at 187 B.R. 919. The Sixth Circuit reversed that decision on April 9, 1996, holding that claims against the nondebtors were within the District Court’s "related to" jurisdiction and could be transferred pursuant to 28 U.S.C. § 157(b)(5). That decision, reported at 81 F.3d 635, was withdrawn, and an amended opinion, issued on June 3, 1996, is reported at 86 F.3d 482. The latter decision, reprinted at 21a-48a, was the subject of a petition for a writ of certiorari, which was denied on January 6, 1997, 117 S. Ct. 718. 3 JURISDICTION The decision of which review is sought was issued on May 8, 1997. This Court has jurisdiction to grant a writ of certiorari pursuant to 28 U.S.C. § 1254(1). STATUTES INVOLVED 28 U.S.C. § 1334(c)(2) provides: "Upon timely motion of a party in a proceeding based upon a State law claim or State law cause of action, related to a case under title 11 but not arising under title 11 or arising in a case under title 11, with respect to which an action could not have been commenced in a court of the United States absent jurisdiction under this section, the district court shall abstain from hearing such proceeding if an action is commenced, and can be timely adjudicated, in a State forum of appropriate jurisdiction." 28 U.S.C. § 1334(d) provides in relevant part: "Any decision to abstain or not to abstain made under this subsection (other than a decision not to abstain in a proceeding described in subsection (c)(2)) is not reviewable by appeal or otherwise by the court of appeals under section 158(d), 1291, or 1292 of this title or by the Supreme Court of the United States under section 1254 of this title." 28 U.S.C. § 157(b)(5) provides: "The district court Shall order that personal injury tort and wrongful death Claims shall be tried in the district court in which the bankruptcy case is pending, or in the district court in the district in which the claim arose, as determined by the district court in which the bankruptcy case is pending." 4 STATEMENT OF THE CASE The Petitioner Tort Committee was appointed in Dow Corning’s bankruptcy case to represent the interests of hundreds of thousands of product liability/tort claimants - against the Debtor. The Debtor’s principal liability consists of billions of dollars of claims by women suing for diseases and injuries alleged to have been caused by silicone gel breast implants created and marketed by the Debtor and others. As asserted against the Debtor and Dow Chemical, the pertinent facts may be summarized as follows: The first breast implant using silicone manufactured by the Debtor was implanted into a woman in 1962 -- at a time when the safety of the implanted materials had not been tested on any animal. Relying for silicone’s safety on inadequate research dating from the 1940s and no testing, the Debtor began actively marketing silicone breast implants in 1964, representing that silicone products were permanent, completely safe, and non-toxic. See Jn re Silicone Gel Breast Implants Prods. Liab. Litig., 887 F. Supp. 1455, 1457-58 (N.D. Ala. 1995) (vacating summary judgment in favor of Dow Chemical). Claims against the Debtor and Dow Chemical include charges of negligence, fraud, and conspiracy based on their failure to disclose substantial amounts of data indicating dangers of serious disease from silicones let loose in the human body and the disease and injuries caused to the plaintiffs by silicone gel implants. When a global class action settlement negotiated in proceedings before District Judge Sam C. Pointer, Jr., in Alabama collapsed in 1995, Dow Corning entered bankruptcy and the claims pending against it were automatically stayed. Claims have proceeded, however, against nondebtor 5 defendants, including Dow Chemical, which has been sued for its allegedly independent tortious conduct in connection with development and testing of silicone for medical purposes. As noted, upon filing for Chapter 11 protection (on May 15, 1995), the Debtor had an automatic stay of all actions against it under Bankruptcy Code § 362(a). In addition, the Debtor immediately commenced an adversary proceeding seeking a temporary restraining order (denied on May 26, 1995) and then a preliminary injunction under § 105 of the Bankruptcy Code barring opt-out plairtiffs from proceeding to trial against its nondebtor shareholders, Dow Chemical and Corning. After the Debtor abandoned its efforts to present adequate proof to justify a preliminary injunction, Bankruptcy Judge Arthur Spector dismissed the proceeding on June 8, 1995, and no appeal was taken. The Debtor then sought to bar litigation against its shareholders by moving on June 12, 1995 to transfer to the district court not only the already Stayed cases against itself but also those proceeding towards trial against Dow Chemical and Corning. Three other ondebtor breast implant defendants, also large corporations not in bankruptcy, moved two days later for transfer of cases pending against them. ~ The District Court ordered transfer of the claims pending against the Debtor, leaving the case files in the courts where the claims were pending (in most cases, before Judge Pointer in Alabama, to whom many cases had been transferred by the Panel for Multi-District Litigation following removal). The District Court held that it lacked "related to" jurisdiction under 28 U.S.C. § 1334(b) over claims against nondebtor defendants. That decision was 6 reversed by the Sixth Circuit last year in Lindsey v. O’Brien, Tanski, Tanzer & Young Health Care Health Care Providers (In re Dow Corning Corp.), 86 F.3d 462 (6th Cir. 1996) ("Lindsey I"), cert. denied, 117 S. Ct. 718 (1997). The court found "related to" jurisdiction over claims against nondebtor defendants because of the potential for claims against jointly held imsurance (with respect to the shareholders) and for contribution claims against the estate (with respect to all of the nondebtor defendants) and held that 28 U.S.C. § 157(b)(5) authorized transfer of nondebtor cases. With no appeal issue as to abstention before it, the Circuit observed that this subject would remain open before the District Court on the remand, noting that "the district court is in a better position to make the necessary abstention determinations." 86 F.3d at 498. Following remand, the District Court issued an order on July 30, 1996 holding that both mandatory and permissive abstention were appropriate for all the nondebtor breast implant claims. The Debtor and the nondebtor defendants appealed from this decision, and the Tort Committee moved to dismiss the appeal on the ground that decisions granting abstention under 28 U.S.C. § 1334(c) are not reviewable on appeal or otherwise, under 28 U.S.C. § 1334(d), quoted above at p. 3. The Court of Appeals, however, treated the appeal as a petition for mandamus and granted mandamus to Dow Corning, reversing the global abstention rulings with respect to Dow Chemical and Corning. The court found that it had jurisdiction on two grounds: First, it said, because Judge Hood had failed to follow its earlier mandate by improperly abstaining globally and, second, because Congress had omitted 28 U.S.C. § 1651 from the list of statutes recited in 7 § 1334(d), giving rise to the inference under the maxim “expressio unius est exclusio alterius" that it intended thereby to make abstention rulings reviewable by mandamus. The court remanded with instructions to the District Court to conduct a case-by-case analysis to determine which pending proceedings were subject to mandatory abstention. See Lindsey v. Dow Chemical Co. (In re Dow Corning Corp.), 113 F.3d 565, 569, 572 (6th Cir. 1997) ("Lindsey II"). The Sixth Circuit left standing the abstention decision with respect to the other nondebtor defendants, which have no corporate relationship to the Debtor. REASONS FOR GRANTING THE WRIT The decision of the Court of Appeals, allowing mandamus as a means of reviewing a mandatory abstention decision, is at war with the unambiguous proscription of such review in 28 U.S.C. § 1334(d) and with the principles of this Court’s decisions enforcing similar statutory prohibitions against appeals of orders to remand state law cases to the state courts from which removal was attempted. The asserted justifications for this use of mandamus amount to effective nullification of the statutory bar, which is meant to enforce respect for expeditious state proceedings. Preceding and underlying the issue of appellate jurisdiction, the Sixth Circuit’s decision that 28 U.S.C. § 157(b)(5) requires or permits transfer of claims against nondebtor defendants, which have not submitted themselves to the bankruptcy jurisdiction, represents an unwarranted expansion of a statute that merely empowers the district court sitting in bankruptcy to determine the venue for liquidating personal injury claims against the estate. Reversal on this point would enforce cognate principles and lead to the same 8 result as the district court’s abstention decision: leaving state law tort litigation against nondebtors where it belongs -- in state court. Both interrelated points are of vast importance in regulating the bankruptcy jurisdiction and confining it to bounds consistent with the claims of federalism. 1. This case affects thousands of tort claimants and their relationship to the second largest bankruptcy in United States history. The Sixth Circuit’s granting of mandamus presents a question of importance that is likely to reverberate in future mass tort bankruptcies. But even if the setting did not bespeak the importance of the issues presented, the case would present compelling issues as to the breadth of the Circuit’s appellate jurisdiction measured against direct limitations imposed by Congress as such limitations have been construed in apposite decisions of this Court. 28 U.S.C. § 1334(d) provides that orders granting mandatory or discretionary abstention "are not reviewable on appeal or otherwise by the court of appeals." This Court made clear in Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S. 336 (1976), that identical language in 28 U.S.C. § 1447(d) absolutely bars review -- by mandamus as well as on appeal -- of orders remanding cases on any of the grounds specified in § 1447(c).' Violation of this rule has led to In Thermtron the Court found the statutory barrier to appeals inapplicable because the remand had been ordered "on grounds not authorized by § 1447(c)." Jd. at 344. No similar argument is available to respondents here, where the mandatory and discretionary abstention order was precisely the kind of "decision to abstain" declared by 28 U.S.C. § 1334(d) to be “not reviewable by appeal or otherwise." EE EN NE i A OC ate Wiest AID a 9 summary reversal. See Gravitt v. Southwestern Bell Telephone Co., 430 U.S. 723, 724 (1977). The Court has also recently considered the effect of 28 U.S.C. § 1452(b), which contains the same bar against appeals of remand orders following removal in connection with bankruptcies. Things Remembered, Inc. v. Petrarca, 116 S. Ct. 494, 496-97 (1995). The Court there pronounced the principle leading to the unanimous affirmance of the Sixth Circuit, a principle from which the latter court departed in the present case: "Congress has placed broad restrictions on the power of federal appellate courts to review district court orders remanding removed cases to state court." Id. at 496. See also In re United States Brass Corp., 110 F.3d 1261, 1266 (7th Cir. 1997) (Posner, J.) (observing that § 1452(b) "bars review by appeal or otherwise, which would seem to take in mandamus"). The Court in Thermtron observed the basis for the Congressional policy against review of remand orders: "to prevent delay in the trial of remanded cases by protracted litigation of jurisdictional issues." Jd. at 351. See also, é.2., United States v. Rice, 327 U.S. 742, 752 ( 1946) (discussing "Congressional policy of avoiding interruption of the litigation of the merits of removed causes, properly begun in State courts"); Pierpoint v. Barnes, 94 F.3d 813, 819 (2d Cir. 1996) ("Review of remand orders delays litigation and adds unnecessary expense. A firm policy of declining to review remand orders allows litigants to proceed with the litigation in a timely fashion in state court."), cert. denied, 117 S. Ct. 1691 (1997). The Sixth Circuit in this case has announced two untenable grounds for departing from the settled rule against appeal of abstention and remand orders. First, the court held 10 that the District Court’s July 30 decision violated the Circuit’s mandate by failing to analyze abstention on a case- by-case basis. See 113 F.3d at 569, App. 6a-7a. But the Circuit’s earlier decision had involved only the question whether claims against nondebtors fell within the "related to" jurisdiction of § 1334(b). There was no occasion on that appeal to rule on mandatory or discretionary abstention, although the Circuit saw fit to go on and state general guidelines for that subject. The anticipatory statement of the court’s views could not create appellate jurisdiction, forbidden by statute, when an attempted appeal later proposed the issues, for the first time, as matters for decision. In any event, the Sixth Circuit’s principal ground for finding that it had mandamus jurisdiction was application of the doctrine of "expressio unius est exclusio alterius" to infer that Congress had intended to make mandamus review available when, in 1990, it added to § 1334(d) a recitation of several statutes under which review was unavailable but did not include a reference to the All Writs Act, 28 U.S.C. § 1651, which serves as the jurisdictional basis for orders of mandamus. See Lindsey II, 113 F.3d at 569, App. 7a. But the error in this analysis is demonstrable in several ways. First, the court ignored that the same language was also added to § 1452(b) but that no case has ever found that the amendment to either section operates to permit mandamus review. Even more central here is this Court’s teaching that "basic general principles of statutory construction" like expressio unius "must yield to clear contrary evidence of legislative intent." National R. Passenger Corp. v. National Assoc. of R. Passengers, 414 U.S. 453, 458 (1974). The "contrary evidence" in this case is compelling. 1] ong Staite Congress amended § 1334(d) and specified the statutes under which review was not to be allowed, not to make mandamus relief available, but to make clear that appellate review is prohibited only in the Courts of Appeals and this Court, while abstention decisions in the bankruptcy court may be reviewed in the district court: Section 309 would amend 11 U.S.C. 305(c) and [28] U.S.C. 1334(c)(2) and 1452(b) to clarify that, with respect to certain determinations in bankruptcy cases, they forbid only appeals from the district courts to the courts of appeals, not from bankruptcy courts to the district courts. The statutes provide that bankruptcy judges’ orders deciding certain motions (motions to abstain in favor of, or remand to, state courts) are unreviewable "by appeal or otherwise." Because bankruptcy judges may enter trial orders only if there is appellate review in an Article III court, one result of this limitation is that bankruptcy judges cannot make final judgments in such cases even when they clearly involve "core" proceedings. gts: Phen 45: a ~ Section 309 would authorize bankruptcy judges to enter binding orders in connection with abstention determinations under Title 11 or Title 28 and remand determinations under Title 28, subject to review in the district court. The statutory language under each of these sections now provides that the decision of the bankruptcy court (to abstain or remand) 1 i a abe Sic Aap atm tat ce be ONE ra ces tea 12 "is not reviewable by appeal or otherwise." The proposed amendment would modify these three sections to provide that the decision of the bankruptcy court is not reviewable "by the court of appeals . . . or by the Supreme Court of the United States .. ." Such determinations would therefore be reviewable by the district court. 136 Cong. Rec. $17570-02, *17580, 101st Cong., 2d Sess., Oct. 27, 1990 (ellipses in original; emphasis added). It is clear that the particular statutes were recited to erase any conceivable doubt that review only in the Courts of Appeals and this Court would be barred; there is no sound way to discover a new intention by Congress to make mandamus review available under a statute that previously had barred it. There is no basis for distinguishing among §§ 1447(d), 1334(d), and 1452(b), all of which manifest the "strong congressional policy" against review of abstention and remand orders. See Things Remembered, 116 S. Ct. at 499 (Ginsburg, J. concurring); see also Sheet Metal Workers’ Int’l Assoc. v. Carter, 450 U.S. 949 (1981) (Rehnquist, J., dissenting from denial of certiorari) (failure to follow Congressional mandate against review of remand orders As noted above, this Court has held that under 28 U.S.C. § 1447(d), which contains the same language withovt the enumeration of statutes, mandamus review is not available when remand is ordered on a ground covered by the statute. See Thermtron Prods. aimee pela RO cy Led aint nwa 13 warrants "at least review by this Court, if not summary reversal").? In reaching out to find mandamus jurisdiction here, the Court of Appeals cited cases authorizing mandamus to address "questions of unusual importance necessary to the economical and efficient administration of justice." 113 F.3d at 569 (quoting E.E.O.C. v. K-Mart Corp., 694 F.2d 1055 (6th Cir. 1982)). But the authority cited concerned the use of mandamus to circumvent problems of finality with respect to issues that would otherwise be reviewable on appeal from a final order. The Circuit cited no case (and we know of none) in which mandamus jurisdiction was invoked to review a decision expressly placed beyond appellate review as a substantive matter by Congress. The Circuit’s unprecedented expansion of mandamus provides a strong basis for the granting of certiorari. 2. An additional ground for granting the petition is the Circuit’s holding that 28 U.S.C. § 157(b)(5) empowers a district court sitting in bankruptcy to order transfer to itself of any "related to" case from anywhere in the country. The holding represents a plain misreading of the statute that, Even with respect to discretionary abstention decisions under non-statutory doctrines as to which Congress has not proscribed appellate review, a plurality of this Court has held that such determinations "ought not to be overridden by a writ of mandamus" because "[w]Jhere a matter is committed to the discretion of a district court, it cannot be said that a litigant’s right to a particular result is ‘clear and indisputable.’" Will v. Calvert Fire Ins. Co., 437 U.S. 655, 665-66 (1978) (opinion of Justice Rehnquist joined by Justices Stewart, White, and Stevens). 14 combined with the Circuit’s expansive reading of "related to" jurisdiction, threatens to undermine the balance struck by Congress in defining the powers of courts sitting in bankruptcy .* The starting point for analysis is, of course, the language of § 157(b)(5): The district court shall order that personal injury tort and wrongful death claims shall be tried in the district court in which the bankruptcy is pending, or in the district court in the district in which the claim arose, as determined by the district court in which the bankruptcy case is pending. The most striking thing about that provision for present purposes is that the word "transfer" is nowhere to be found in it. The result of that omission for the nondebtors is that they had no basis in law for the transfers they sought. Section 157(b)(5) is a venue-setting provision for personal injury tort cases against the debtor. This becomes clear from the setting of this provision within § 157 as a . This issue was raised in the petition for certiorari that was denied earlier this year, 117 S. Ct. 718. However, the previous petition was vigorously opposed on grounds of mootness because of the district court’s intervening abstention ruling. That asserted obstacle is gone now, and the reversal of the abstention order gives rise to the first of the questions presented for review. The related question of "transfer" under § 157(b)(5) creates a wider focus for interrelated aspects of the bankruptcy jurisdiction. Se ee ee ee aes 15 whole, which deals generally with the division of responsibility between the district and bankruptcy courts. Literally, of course, when § 157(b)(5) refers to "personal injury and wrongful death claims" without qualification, it could mean such claims against anyone, anywhere. But it obviously does not mean that. It means non-core proceedings triable by the district court, not the bankruptcy court. See In re United States Lines, 128 B.R. 339, 341 (S.D.N.Y. 1991). What kind of non-core proceedings? Section 157(b)(2)(B) answers this question: "personal injury tort or wrongful death claims against the estate" (emphasis added). The looser conception of § 157(b)(5) has crept into some cases because "transfer" is a perfectly sensible word to apply to the power over cases in which the debtor is a defendant. Such cases are automatically in the bankruptcy court in the fundamental sense that they are held in place by that court by virtue of the automatic stay imposed by Bankruptcy Code § 362(a). For those cases, the bankruptcy district court is empowered to say whether they may be tried at all so long as the bankruptcy is pending. It is a rational corollary to grant the power to say where they may be tried. In that orderly scheme of things, -it is suitable to speak of the venue-setting power of the district court as a power of "transfer." But the notion of a wider power over cases between nondebtors is embraced neither by the statutory language nor by the essential scheme of the relevant Bankruptcy Code provisions. As against the sound understanding that § 157(b)(5) refers to claims against a bankrupt estate, the extraordinary power to transfer nondebtor cases from courts throughout the country, both state and federal, is a kind of sweeping authority that would require the most persuasively explicit 16 Statutory language. When Congress meant to provide for transfer only of cases pending in federal courts, and then only for purposes of pretrial handling, it created a special multi-judge tribunal for the purpose. 28 U.S.C. § 1407. There is no persuasive suggestion anywhere that Congress intended to grant the headier power the respondents claim -- to pluck cases out of state and federal courts everywhere into the jurisdiction of any single district judge in bankruptcy cases. That power, if it had ever been contemplated, would entail (in this and other cases) the compelled transfer for trial of litigants, their witnesses, and their lawyers to a federal forum alien to and often distant from the states in which (and under the laws of which) the cases had been brought. A result so astounding is nowhere embraced in or foretold by the visible language and purpose of 28 U.S.C. § 157(b)(5). The contrary view pressed by respondents and adopted by the Sixth Circuit has its judicial origin and principal support in A.H. Robins Co. v. Piccinin, 788 F.2d 994 (4th Cir. 1986), which turns out upon close inspection to be strange authority indeed, notably because no transfer of claims against nondebtors -- or even claims against the debtor -- ultimately was ever authorized or made in that case. It is true that Judge Mehrige ordered transfer there of "related to" - cases, but his order to that effect was remanded because the affected parties had not received necessary notice of the proposed transfers. Jd. at 1015-16. On remand, that notice was never given; the transfers never happened; and the Robins reorganization went forward to completion unimpeded. See Richard B. Sobol, Bending the Law: The Story of the Dalkon Shield Bankruptcy 66 (1991). 17 Moreover, the Fourth Circuit’s discussion of the transfer issue in Robins proceeds entirely upon considerations relating to suits against the debtor and does not reason at all about the subject of possible "related" cases against nondebtors. The Fourth Circuit’s opinion repeatedly refers to "tort cases against a Chapter 11 debtor" (788 F.2d at 1010); transfer of venue "of a case against the bankrupt to another district" (id. at 1010-11); "personal injury tort claims against a debtor" (id.); and so on for several pages. Codefendants are mentioned only in one passing reference (id. at 1016), strongly suggesting that the court simply never focused on the question whether § 157(b)(5) was intended to permit transfer of nondebtor claims. The Sixth Circuit relied heavily on statements in Robins that claims against A.H. Robins could not be estimated or a dispute resolution facility established unless all Dalkon Shield claims were physically consolidated in one furum. See 44a-46a. But that proved to be an illusion; it is undisputed that (1) no cases were ever actually transferred in the Robins bankruptcy and (2) the lack of such a transfer had not a whit of impact on the district court’s ability to estimate the value of the Dalkon Shield claims and resolve the bankruptcy by establishing a claims resolution facility. Thus, to the extent the Fourth Circuit in Robins spoke in terms that would stretch the boundaries of § 157(b)(5) to achieve a policy goal, it has since become clear that the attainment of that goal is unrelated to any purported need to transfer cases. Estimation and liquidation of pending tort claims are two different things, and only the former need occur in the centralized bankruptcy forum. Even more clearly, it is wholly unnecessary to have claims against nondebtors transferred. 18 In short, the correct reading of 28 U.S.C. § 157(b)(5) is a further question of moment adding measurably to the reasons for granting the writ. CONCLUSION This petition for a writ of certiorari should be granted. Respectfully submitted, Marvin E. Frankel (Counsel of Record) Kenneth H. Eckstein Jeffrey S. Trachtman Kramer, Levin, Naftalis & Frankel 919 Third Avenue New York, New York 10022 (212) 715-9100 Attorneys for the Official Committee of Tort Claimants July 1997 KL3:181218.1 APPENDIX j “a E . e 4 : ; - : | E 3 % la UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT Argued April 24, 1997 Decided May 8, 1997 Nos. 96-2005, 96-2008 to 96-2013 and %6-2139. In re DoW CORNING CORPORATION, Debtor. HEIDI LINDSEY, Representative of the Estate of Charlotte Mahum and Cheryl Kahn, et al., UNSECURED CREDITORS’ COMMITTEE OFFICIAL COMMITTEE OF TORT CLAIMANTS, et al., Plaintiffs-Appellees, lit bies THE Dow CHEMICAL COMPANY (96-2005/2139); CORNING INCORPORATED (96-2008/2139); Dow CORNING CORPORATION (96-2009); MINNESOTA MINING AND MANUFACTURING COMPANY (96-2010); BAXTER HEALTHCARE CORPORATION (96-2011); MEDICAL ENGINEERING CORPORATION (96-2012); BRISTOL- MYERS SQUIBB COMPANY (96-2013), Defendants-Appellants. 2a Randall L. Frank, Bay City, MI, Karen E. Evangelista, Shermeta, Chimko & Kilpatrick, Rochester Hills, MI, Dennis S. Meir, Kilpatrick & Cody, Atlanta, GA, Susan M. Cook, Lambert, Leser, Dahm, Giunta, Cook & Schmidt, Bay City, MI, Marion J. Mack, Trustee, Office of the United States Trustee, Detroit, MI, Marvin E. Frankel (argued and briefed), Kramer, Levin, Naftalis, Nessin, Kamin & Frankel, New York City, Lenard M. Parkins, Verner, Liipfert, Bernard, McPher- son & Hand, Houston, TX, Russell Langford Munsch, Mun- sch, Hardt, Kopf, Harr & Dinan, Dallas, TX, John M. O’ Quinn, O’ Quinn, Kerensky, McAnnich & Laminack, Hous- ton, TX, Deborah H. Sheffield, Richardson, Plowden, Grier & Howser, Columbia, SC, Christopher J. Walker, Markow, Walker, Reeves & Anderson, Ridgeland, MS, Delia Y. Robin- son, Markow, Walker, Reeves & Anderson, Jackson, MS, Thomas D. Lambros, Bricker & Eckler, Cleveland, OH, Debra D. McCullough, Sherman & Sterling, New York City, Tommy Jacks, Mithoff & Jacks, Austin, TX, Edward Blizzard, Williams, Blizzard & McCarthy, Houston, TX, for Tort Claimant, Official Committee of Tort Claimants in No. 96- 2005. James C. Schroeder (briefed), Theresa A. Canaday (briefed), Herbert L. Zarov, Robert M. Dow, Jr., Mayer, Brown & Platt, Chicago, IL, for Dow Chemical Company in Nos. 96-2005 and 96-2139. Dennis S. Meir, Kilpatrick & Cody, Atlanta, GA, Marvin E. Frankel (argued and briefed), Kramer, Levin, Naftalis, Nessin, Kamin & Frankel, New York City, Russell Langford Munsch, Munsch, Hardt, Kopf, Harr & Dinan, Dallas, TX, John M. O’ Quinn, O’ Quinn, Kerensky, McAnnich & Laminack, Hous- ton, TX, Deborah H. Sheffield, Richardson, Plowden, Grier & Howser, Columbia, SC, Christopher J. Walker, Markow, Walker, Reeves & Anderson, Ridgeland, MS, Delia ‘Y. Robin- son, Markow, Walker, Reeves & Anderson, Jackson, MS, for Tort Claimant, Official Committee of Tort Claimants in Nos. 96-2008 to 96-2013. 3a Sheryl L. Toby, Michael J. Friedman, Honigman, Miller, Schwartz & Cohn, Detroit, MI, Ogden N. Lewis, Davis, Polk & Wardwell, New York City, for Unsecured Creditors’ Com- mittee in Nos. 96-2008 to 96-2013. William D. Eggers, Nixon, Hargrave, Devans & Doyle, Rochester, NY, for Corning Incorporated in Nos. 96-2008 and 96-2139. Barbara J. Houser (argued), George H. Tarpley, Sheinfeld, Maley & Kay, Dallas, TX, for Dow Corning Corporation in No. 96-2009. Greg A. Danilow (briefed), Bruce R. Zirinsky (argued and briefed), Howard B. Comet (briefed), Weil, Gotshal & Manges, New York City, Susan Healy Zitterman, John P. Hessburg, Kitch, Drutchas, Wagner & Kermey, Detroit, MI, for Minnesota Mining and Manufacturing Company in No. 96-2010. Larry J. Nyhan, James F. Conlan, Sidley & Austin, Chicago, IL, Judy A. O’Neill, Laura J. Eisele, Dylrema Gos- sett, Detroit, MI, Thomas E. Pitts, Jr. (argued and briefed), Sidley & Austin, New York City, for Baxter Healthcare Cor- poration in No. 96-2011. Hayden Smith, Jr. (briefed), David J. Adler, McCarter & English, Newark, NJ, for Medical Engineering Corporation in No. 96-2012. Hayden Smith, Jr. (briefed), David J. Adler, McCarter & English, Newark, NJ, for Bristol-Myers Squibb Company in No. 96-2013. Michael J. Friedman, Honigman, Miller, Schwartz & Cohn, Detroit, MI, Randall L. Frank, Bay City, MI, Karen E. Evan- gelista, Shermeta, Chimko & Kilpatrick, Rochester Hills, MI, Dennis S. Meir, Kilpatrick & Cody, Atlanta, GA, Susan M. Cook, Lambert, Leser, Dahm, Ginata, Cook & Schmidt, Bay City, MI, Marion J. Mack, Trustee, Office of the United States Trustee, Detroit, MI, Marvin E. Frankel (argued and briefed), Kramer, Levin, Naftlis, Nessin, Kamin & Frankel, New York City, Lenard M. Parkins, Verner, Liipfert, Bernard, McPherson & Hand, Houston, TX, Russell Langford Munsch, Munsch, Hardt, Kopf, Harr & Dinan, Dallas, TX, John M. 4a O’ Quinn, O’ Quinn, Kerensky, McAnnich & Laminack, Hous- ton, TX, Deborah H. Sheffield, Richardson, Plowden, Grier & Howser, Columbia, SC, Delia Y. Robinson, Markow, Walker, Reeves & Anderson, Jackson, MS, Thomas |. Lambros, Bricker & Eckler, Cleveland, OH, Debra D. McCullough, Sherman & Sterling, New York City, Tommy Jacks, Mithoff & Jacks, Austin, TX, Edward Blizzard, Williams, Blizzard & McCarthy, Houston, TX, for Tort Claimant, Official Com- mittee of Tort Claimants in No. 96-2139. Ogden N. Lewis, Davis, Polk & Wardwell, New York City, for Unsecured Creditors’ Committee in No. 96-2139. Before: MARTIN, Chief Judge; BATCHELDER, Circuit Judge; WISEMAN,* District Judge. BOYCE F. MARTIN, JR., Chief Judge. Before the Court is an appeal and petition for writ of man- damus by Dow Corning; its shareholders, The Dow Chemical Company and Corning Incorporated; and other manufacturers of silicone products that have been named as co-defendants with Dow Corning in product liability suits relating to sili- cone implants.' These parties contest the district court’s denial of their motion to transfer to the Eastern District of Michigan breast-implant claims brought in various jurisdic- tions by claimants who have chosen not to join the global set- tlement pool. The district court, upon remand from this Court, exercised discretionary and mandatory abstention in declin- ° The Honorable Thomas A. Wiseman, Ir., United States District Judge for the Middle District of Tennessee, sitting by designation. : These co-defendants include Baxter International Inc. (Baxter); Minnesota Mining and Manufacturing (3M); Bristol-Myers Squibb Co. (Bristol-Myers); and Medical Engineering Corp. (MEC). - | — Sa ing to transfer the claims against the shareholders and the co- defendants. For the reasons stated herein, we issue a writ of mandamus ordering the district court to transfer the claims against the shareholders to the Eastern District of Michigan and to evaluate each claim individually to determine whether mandatory abstention applies. This case concerns yet another chapter in “one of the world’s largest mass tort litigations.” In re Dow Corning Corp., 86 F.3d 482, 486 (6th Cir.1996), cert. denied, __ US. —__, 117 S.Ct. 718, 136 L.Ed.2d 636 (1997). Thousands of product liability claims arising from Dow Corning’s manu- facture and sale of silicone products have been filed against Dow Corning and its shareholders. The threatened conse- quences of these claims prompted Dow Corning to file a peti- tion for reorganization under Chapter 11 of the Bankruptcy Code. Dow Corning, joined by its shareholders, subsequently filed a motion to transfer the claims pending against them to the Eastern District of Michigan. The company envisioned its motion was the first step in ensuing a feasible plan of reor- ganization, and indicated that it would seek to have the trans- ferred actions consolidated for a threshold jury trial on the issue of whether silicone gel breast implants cause the diseases claimed.” Id. at 486. Citing potential claims for con- tribution against Dow Corning, the nondebtor manufactur- ers—Baxter, 3M, Bristol-Myers; and MEC—also moved to transfer the claims in which they were named as co-defen- dants with Dow Corning. The district court granted Dow Corning’s motion to transfer, but denied, on jurisdictional grounds, the motion as it related to the shareholders and the motions of the nondebtor manufacturers. In In re Dow Corning Corp., 86 F.3d at 482, this Court reversed and held that the Eastern District of Michigan had “related to” jurisdiction over breast-implant claims against not only the debtor, Dow Corning, but also its shareholders and certain other nondebtor defendants. We further held that 28 U.S.C. § 157(b)(5) granted the district court authority to transfer the cases against the nondebtors to the Eastern District of Michigan. In so doing, we recognized the interest 6a of all parties, including the tort claimants, in preventing unnecessary depletion of Dow Corning’s assets. We further acknowledged that the risk to the debtor’s estate would be substantially enhanced “if the claims against Dow Chemical and Corning Incorporated are allowed to proceed separately” from those against Dow Corning. Id. at 495. After outlining the risks to Dow Corning’s estate, we remanded to the district court with instructions “to determine in each individual case whether hearing it would promote or impair efficient and fair adjudication of bankruptcy cases.” Id. at 497 (quoting In re Salem Mortgage Co., 783 F.2d 626, 635 (6th Cir.1986)). Despite our clear articulation of the risks to Dow Corning’s estate and our call for individualized abstention determina- tions, the district court, without benefit of a hearing and with- out analysis of any individual claim, globally abstained from the cases against the shareholders. The Official Committee of Tort Claimants initially contend that we are without jurisdiction to review the district court’s decision. Indeed, Congress has significantly curtailed the couris of appeals’ ability to review a district court’s decision to exercise mandatory or discretionary abstention under 28 U.S.C. 1334(c)(1), (2). Section 1334(d) provides: Any decision to abstain or not to abstain made under this subsection (other than a decision not to [exercise manda- tory abstention]) is not reviewable by appeal or other- wise by the court of appeals under section 158(d), 1291, or 1292 of this title or by the Supreme Court of the United States under section 1254 of this title... . 28 U.S.C. § 1334(d). However, we conclude for two reasons that we have jurisdiction in mandamus to review the district court’s decision. First, this is not the ordinary situation in which the district court, either on motion of a party or on its own motion, deter- mines that abstention under 28 U.S.C. § 1334(c) is appro- priate. Rather, the district court was instructed by this Court, in an order remanding this matter for the explicit purpose of determining whether abstention was proper, to undertake a Ta case-by-case review of these tort claims and to determine, as to each case, whether to abstain. The district court did not comply with our order of remand. The issuance of a writ of mandamus is therefore necessary and appropriate to require the district court to conduct the abstention analysis in strict compliance with the requirements of § 1334 and our order of remand. Second, § 1334(d) does not mention this Court’s ability to review such determinations pursuant to our mandamus author- ity under 28 U.S.C. § 1651. Thus, recognizing the familiar maxim “expressio unius est exclusio alterius”—i.e., the expression of one is the exclusion of others—we conclude that our power to review a district court’s abstention deter- mination under 1334(c)(1) or (2), other than a decision not to abstain under 1334(c)(2), is limited to those rare cases when mandamus review is justified; that is, when the case “ ‘pre- sents questions of unusual importance necessary to the eco- nomical and efficient administration of justice.’ EEOC v. K-Mart Corp., 694 F.2d 1055 (6th Cir.1982). Because of the significant risk posed to Dow Corning’s estate by the multi- forum breast-implant litigation, this case is one of those rare instances where mandamus relief is appropriate. In In re Bendectin Prods. Liab. Litig., 749 F.2d 300, 304 (6th Cir.1984), we identified criteria for judging whether issuance of a writ of mandamus is appropriate. These guide- lines include: (1) the party seeking mandamus will be dam- aged or prejudiced and has no other means of obtaining relief; (2) the district court’s error is clearly erroneous as a matter of law; (3) the district court’s order is an oft-repeated error; and (4) the district court’s order raises important issues of first impression. Id.; see also In re Glass, Molders, Pottery, Plas- tics & Allied Workers Int’] Union, Local No. 173, 983 F.2d 725, 727 (6th Cir. 1993). Although all of the factors may not point toward issuance of a writ, mandamus relief is still appropriate “if the other factors clearly warrant it.” In re Glass Workers, 983 F.2d at 727. In this case, the balance of these factors indicate that issuance of a writ of mandamus is appropriate. 8a The first and fourth factors are clearly met. Dow Corning and its shareholders will be harmed if the writ is not issued, and § 1334(d)’s direct appeal prohibition renders a writ of mandamus their only avenue of relief. This case also presents extremely important issues that have not been addressed by this Court. Moreover, the district court’s clear error is equally appar- ent. The order of remand required the district court to make a case-by-case determination of whether, in light of the findings contained in the order of remand, abstention was statutorily mandated or appropriate as a matter of discretion, and Dow Corning and its shareholders were entitled to have that order followed. Instead, completely disregarding those findings, the district court made a blanket determination that mandatory abstention under § 1334(c)(2) was appropriate, and in the alternative, held that it would exercise discretionary absten- tion to avoid transfer of the shareholders’ claims to the East- ern District of Michigan. Both determinations were fraught with clear error. The mandatory abstention provision in § 1334(c)(2) pro- vides: Upon timely motion of a party in a proceeding based upon a State law claim or State law cause of action, related to a case under title 11 but not arising under title 11 or arising in a case under title 11, with respect to which an action could not have been commenced in a court of the United States absent jurisdiction under this section, the district court shall abstain from hearing such proceeding if an action is commenced, and can be timely adjudicated, in a State forum of appropriate jurisdiction. Thus, for mandatory abstention to apply to a particular pro- ceeding, there must be a timely motion by a party to that pro- ceeding, and the 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 adjudica- | 9a tion; and (5) be a non-core proceeding. In re Dow Corning, 86 F.3d at 497. The district court’s decision applying mandatory abstention to the proceedings against the shareholders is, in generous terms, inadequate. The requirements for mandatory abstention dictate that each case must be examined individually. The dis- trict court, in its three-page discussion of mandatory absten- tion, failed to make the necessary case-by-case inquiry. No hearing was conducted, and no evidence was accepted by the district court. It is undisputed that some of the cases do not meet the requirements of mandatory abstention. Indeed, in many of the cases, there does not even appear to have been a motion for abstention filed by the plaintiff in the proceéding. Moreover, the number of cases requiring mandatory absten- tion is impossible for us to determine because of the paucity of evidence on the record. Thus, the district court’s decision employing § 1334(c) to abstain globally without examination of a single individual claim cannot stand. The district court’s exercise of discretionary abstention is equally troubling. Section 1334(c)(1) provides, in relevant part: 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 11 or arising in or related to a case under title 11. 28 U.S.C. § 1334(c)(1). As an initial matter, it makes little practical sense to trans- fer the claims against Dow Corning while refusing to transfer those against the shareholders. The claims against the share- holders arise from an identical set of facts and are merely duplicates of those against Dow Corning. The shareholders have never manufactured a silicone-implant product and are only named in the suits because of their association with Dow Corning. Thus, the actions against Dow Corning’s share- holders are essentially the same exact cases that have already 10a been transferred to the Eastern District of Michigan. The dis- trict court’s decision to transfer only the claims against Dow Corning basically expanded an already overwhelming liti- gation burden. Aside from the impracticality of the district court’s decision to exercise discretionary abstention, its legal rationale is wholly inadequate. The district court did not examine a sin- gle tort claim to determine whether discretionary abstention was appropriate in the interests of justice and comity. The dis- trict court briefly mentioned principles of federalism and comity, as well as the state law nature of the claims, as bases for discretionary abstention. Although the cases are premised on state law, the district court did not indicate why the state law nature of the claims justified discretionary abstention; indeed, it appears that it does not. The district court ignored the fact that at least some of the claims have an independent basis for jurisdiction in federal court. Moreover, there is no suggestion that the state law issues in these cases are unique, unsettled, or difficult. See General Am. Communications Corp. v. Landsell (In re General Am. Communications Corp.), 130 B.R. 136, 146 (S.D.N.Y.1991) (“Given the genesis of sec- tion 1334(c)(1), it is not surprising that the primary deter- minant for the exercise of discretionary abstention is whether there exists unsettled questions of state law.”); see also In re Pan Am. Corp., 950 F.2d 839, 845 (2d Cir.1991). Thus, the principles of federalism and comity would not be violated by the district court’s assumption of jurisdiction over these cases. The breast implant litigation truly is a nationwide issue, and no state has a paramount interest in the litigation. The district court also overlooked the risks to Dow Corn- ing’s estate that were clearly articulated in our prior decision. Failing to transfer the claims against the shareholders will likely 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. As we noted in In re Dow Corning Corp., 86 F.3d 482, 493 (6th Cir.1996), cert. denied, ___—s—-U.S.__, 117 lla S.Ct. 718, 136 L.Ed.2d 636 (1997), “Dow Chemical and Corning Incorporated have already asserted cross-claims against each other and Dow Corning in the underlying liti- gation.” Moreover, the shareholders share joint insurance cov- erage with Dow Corning. We acknowledged in our prior decision that “certain of the policies cover defense expenses, and those costs alone may significantly reduce the pool of coverage available to Dow Corning if the claims pending against Dow Chemical and Corning Inc. are allowed to pro- ceed separately. “ Id. at 495. Therefore, contrary to the dis- trict court’s determination, the substantial risks identified in our prior decision indicate that the cases against the share- holders should be transferred in the interest of justice. The district court, without a hearing or the presentation of additional evidence, ignored this Court’s examination of the evidence and made a conclusory finding to the contrary. We nevertheless find that our prior examination of the record was correct and that the district court’s determinations are with- out support. Thus, because the district court clearly erred in making its abstention determinations, issuance of a writ of mandamus is appropriate in this case.” We further find that discretionary abstention from the cases against the shareholders is wholly inappropriate in this case. In our prior decision, we acknowledged the significant impact that our resolution of these issues will have on the future course of this litigation. We also recognized that perfect sat- isfaction of all interests was impossible. Armed with that real- ization, we set out to meet the goal of establishing “a mechanism for resolving the claims at issue in the most fair and equitable manner possible.” Id. at 487. This goal was 2 The district court also relied on 11 U.S.C. § 524(e) to justify its decision to exercise discretionary abstention. This reliance is puzzling. Section 524(e) provides that the liability of a nondebtor is not affected by the discharge of that liability with respect to the debtor. No nondebtor is seeking a discharge of their debt in the Eastern District of Michigan, and no nondebtor has argued that a discharge of the debtor’s debts should have any affect on their objigations or liabilities to the claimants in these cases. Thus, § 524 is completely irrelevant to this case. 12a to be attained by balancing the following often-competing interests: those of the individuals who have brought and will bring breast implant claims; Dow Corning’s interests with regard to its attempt to formulate a successful reorga- nization plan; Dow Chemical and Corning Incorporated’s interests as shareholders of Dow Corning; and the judi- cial system’s interest in allocating its limited resources effectively and efficiently. Id. The latter three interests clearly will be served by trans- ferring the claims against the shareholders to the Eastern Dis- trict of Michigan. The claimant’s interests—presumably preserving the assets of Dow Corning’s estate and receiving quick adjudication of their claims—will also be accomplished through such a transfer. Thus, with regard to the cases brought by claimants choosing not to join the global settlement pool, we have reached a crossroads. Dow Corning’s assets are finite and risk being unnecessarily diminished by the expense of lit- igating thousands of breast-implant claims in innumerable jurisdictions. We therefore believe that transferring these claims to a single jurisdiction is the only way to achieve an efficient resolution to this litigation, the development of a successful reorganization plan, and the adequate compensa- tion of deserving claimants. Accordingly, we issue a writ of mandamus ordering the dis- trict court to transfer the claims against Dow Chemical and Corning Incorporated to the Eastern District of Michigan. Once transfer has been accomplished, the cases should be indexed and cross referenced so that, in any proceeding in which a motion for abstention is filed, the district court may make the required abstention determinations and adequately state its reasoning as to each such proceeding. Because we find it unnecessary to transfer any other pending proceedings to the district court at this time, we deny the nondebtor man- ufacturers’ petition for writ of mandamus. Oe 13a UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION Case No. 95-CV-72397-DT In Re: Dow CORNING CORPORATION, Debtor. HON. DENISE PAGE Hoop 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. Jn 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 14a 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 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. Jn 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). /¢. Mandatory 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 15a capable of timely adjudication; and 5) be a non-core proceeding. /d. As to the first factor, the claims and causes of action at issue against the nondebtors are personal injury tort claims 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 nondebtors. 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: proceedings “arising under” title 11 and proceedings “arising in” title 11. In re Harris Pine Mills, 44 F.3d 1431, 1435 (9th ; 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 autside of the Eastern Dis. —- — ~-~~~ ~- -, trict of Michigan. 16a Cir. 1995), cert. denied, 115 S.Ct. 2555 (1995). Proceedings “arising under” title 11 “involve a cause of action created or determined by the statutory provision of title 11.” Jd. Pro- ceedings “arising in” title 11 are a reference to those “admin- istrative” matters that arise only in bankruptcy cases and are not based on any right expressly created by title 11, but nev- ertheless, would have no existence outside of the bankruptcy. Id. Section 157(b)(2) provides a nonexclusive list of pro- ceedings which are core proceedings. Non-core proceedings are only “related to” a case under title 11. Jd. at 1435. A non- core proceeding “does not invoke a substantive right created by the federal bankruptcy law and is one that could exist out- side 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 (O) which state in pertinent part: (b)(2) Core proceedings include, but are not limited to— * « « (B) allowance or disallowance of claims against the estate or exemptions from property of the estate, and estimation of claims or interests for the purposes of con- firming a plan under chapter 11, 12, or 13 of title 11 but not the liquidation or estimation of contingent or unliq- uidated personal injury tort or wrongful death claims against the estate for purposes of distribution in a case under title 11; *x *” *x (O) other proceedings affecting the liquidation of assets of the estate or the adjustment of the debtor-cred- itor or the equity security holder relationship, except per- sonal injury tort or wrongful death claims. 28 U.S.C. § 157(b)(2)(B) and (O) (emphasis added). /n re Hughes, 98 B.R. 115, 118 (D.C. 1988). The actions against -— —- ~- —~-+thenondebtordefendants-are non-core proceedings under2& _ __ U.S.C. § 157. 17a 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 indi- cated 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. In 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) provides: 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 11 or arising in or related to a case under title 11. In In re White Motor Credit, 761 F.2d 270 (1985), the Sixth Circuit noted: 18a . . . 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 fed- eral judge, . . . at least judicial economy and expedi- tiousness, 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- debtors would have any indemnification or contribution claims against the debtor’s estate. = The Sixth Circuit opinion addresses the_loint_Insnrance_ ___. issue between Dow Corning, Dow Chemical and Corning 19a 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. Jd. at 760- 761. The Bankruptcy Code discharges the Debtor’s liabilities and not those owed by third parties. Jd. at 760, notes 42, 43, and 44; 11 U.S.C. § 524(e). If the Court does not 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 dis- charge 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 discretionary abstention. Specifically, the Court finds the interests of justice and comity weigh in favor of discretionary abstention. —- — = —_———— -— —- - ~~ 20a 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 IS ORDERED that the actions against the nondebtor defendants are subject to mandatory abstention under 28 U.S.C. § 1334(c)(2); alternatively, IT 1S ORDERED that the Court will exercise its discretion to ABSTAIN from the cases against the nondebtors under 28 U.S.C. § 1334(c)(1). DATED: JUL 30 1996 /s/ DENISE PAGE HOOD DENISE PAGE Hoop United States District Judge 2la UNITED STATES COURT OF APPEALS, SIXTH CIRCUIT. Nos. 95-2034, 95-2082, 95-2084, 95-2106, and 95-2107. Argued March 5, 1996. Decided April 9, 1996. In re DoW CORNING CORPORATION, Debtor. HEIDI LINDSEY, et al.: Official Committee of Tort Claimants, et ai., Plaintiffs-Appellees, —_—vV.— O’ BRIEN, TANSKI, TANZER AND YOUNG HEALTH CARE PROVIDERS OF CONNECTICUT, et al., Defendants, Dow Corning Corporation; The Dow Chemical Company (95- 2034/2107); Corning Inc. (95-2107); Baxter Healthcare Corporation; Baxter International Inc. (95-2082); Min- nesota Mining and Manufacturing Co. (95-2084); Bristol- Myers Squibb Co.; Medical Engineering Corporation (95- 2106), Defendants-Appellants. 22a Before: MARTIN and BATCHELDER, Circuit Judges WISEMAN, District Judge.* AMENDED OPINION BOYCE MARTIN, JR., Circuit Judge. This is an appeal to determine the subject matter jurisdic- tion of federal district courts, sitting as bankruptcy courts, over proceedings “related to” a case filed under Chapter 11 of the Bankruptcy Code, and the ability of federal district courts to transfer such proceedings to the district court in which the bankruptcy case is pending. The principal issue presented is whether the district court erred, as a matter of law, in its determination that claims for compensatory and punitive dam- ages asserted in tens of thousands of actions against numer- ous nondebtor manufacturers and suppliers of silicone gel breast implants could have no conceivable effect upon, and therefore were not related to, the bankruptcy estate of The Dow Corning Corporation. The district court held that it did not have “related to” jurisdiction over those claims pursuant to 28 U.S.C. § 1334(b) and concluded that they could not be transferred to it pursuant to 28 U.S.C. § 157(b)(5). For the following reasons, we REVERSE and REMAND for further pro- ceedings consistent with this opinion.! The Honorable Thomas A. Wiseman, Jr., Senior United States District Judge for the Middle District of Tennessee, sitting by desig- nation. In this amended opinion, we adhere to our April 9, 1° 96 deci- sion in this case, but seek to clarify the scope of our ruling and the impact we intend it to have. The opinion is therefore amended and reis- sued as follows, 23a I. Until it ceased their manufacture in 1992, Dow Corning was the predominant producer of silicone gel breast implants, accounting for nearly 50% of the entire market. In addition, Dow Corning supplied silicone raw materials to other man- ufacturers of silicone gel breast implants. In recent years, tens of thousands of implant recipients have sued Dow Corning, claiming to have been injured by autoimmune reactions to the silicone in their implants. Dow Chemical Company, Corning Incorporated, Minnesota Mining and Manufacturing Com- pany, Baxter Healthcare Corporation and Baxter International Incorporated,” and Bristol-Myers Squibb Company and Med- ical Engineering Corporation? are other manufacturers and suppliers of silicone gel-filled implants, and are codefendants with Dow Corning in a large number of personal injury actions. On June 25, 1992, prior to Dow Corning’s filing of its Chapter 11 petition, the Federal Judicial Panel on Multidis- trict Litigation ordered the consolidation of all breast implant actions pending in federal courts for coordinated pretrial pro- ceedings, and transferred those actions to Chief Judge Pointer of the Northern District of Alabama. On September 1, 1994, Chief Judge Pointer certified a class for settlement purposes only, and approved a complex agreement between members of the class and certain defendants that contemplated the cre- ation of a $4.25 billion fund to cover, among other things, the costs of treatment and other expenses incurred by breast implant recipients. Each class member was given the oppor- tunity to opt out of the class and to pursue her individual claims separately. Several thousand plaintiffs opted out of the Baxter never designed, manufactured, or marketed breast implants, but is a defendant in personal injury actions as a result of cer- tain corporate acquisitions and mergers. The Baxter implants were actu- ally made by The Heyer-Schulte Company. 3 ‘The Bristol-Myers Squibb implants were made by a subsidiary, The Medical Engineering Corporation. —— eee... TY el 24a settlement class, while approximately 440,000 elected to reg- ister for inclusion in the Global Settlement.‘ Due to the litigation burden imposed by what is one of the world’s largest mass tort litigations, and the threatened con- sequences of the thousands of product liability claims arising from its manufacture and sale of silicone breast implants and silicone gel, Dow Corning filed a petition for reorganization under Chapter 11 of the Bankruptcy Code on May 15, 1995, in the United States District Court for the Eastern District of Michigan. The district court had jurisdiction over that pro- ceeding pursuant to 28 U.S.C. § 1334(a). As a result of Dow Corning’s Chapter 11 filing, all breast implant claims against it were automatically stayed pursuant to 11 U.S.C. § 362(a). Claims against Dow Corning’s two shareholders, Dow Chem- ical and Corning Incorporated, and the other nondebtor defen- dants were not stayed. Dow Chemical, Corning Incorporated, Minnesota Mining, Baxter and Bristol-Myers Squibb subse- quently removed many opt-out claims in which those com- panies were named defendants with Dow Corning from state to federal court pursuant to 28 U.S.C. § 1452(a). On June 12, 1995, Dow Corning filed a motion pursuant to 28 U.S.C. § 157(b)(5)° to transfer to the Eastern District of Michigan opt-out breast implant claims pending against it and its shareholders, Dow Chemical and Corning Incorpo- rated. Dow Corning’s motion covered claims that had been It has since become clear that the original Global Settlement will not hold together because the sums provided are inadequate to fund the claims filed by over 100,000 plaintiffs. Unless a modified settle- ment is reached, thousands of opt-in plaintiffs and thousands of claimants who have yet to file actions are likely to file or reactivate individual suits against the breast implant defendants in both state and federal courts. 5 Title 28 U.S.C. § 157(b)(5) states: “The district court shall order that personal injury tort and wrongful death claims shall be tried in the district court in which the bankruptcy case is pending, or in the district court in the district in which the claim arose, as determined by the district court in which the bankruptcy case is pending.” . Dow Corning’s motion sought a transfer of lawsuits against it and its shareholders which were not part of the global settlement. Dow 25a removed to federal court and were pending in the multidistrict forum, as well as claims pending in state courts which were in the process of being removed to federal courts pursuant to 28 U.S.C. § 1452(a). Dow Corning envisioned its transfer motion as the first step in ensuring a feasible plan of reorganization, and indicated that it would seek to have the transferred actions consolidated for a threshold jury trial on the issue of whether silicone gel breast implants cause the diseases claimed. Dow Chemical and Corning Incorporated joined in Dow Corning’s motion. On June 14, 1995, Minnesota Mining, Baxter, and Bristol- Myers Squibb also moved, pursuant to Section 157(b)(5), to transfer to the Eastern District of Michigan the opt-out cases in which those manufacturers, were named as defendants with Dow Corning.’ In their Section 157(b)(5) motions, Minnesota Corning Dow Chemical and Corning have stated that “[t]housancs of the suits against Dow Corning have included claims against Dow Chem- ical and Corning, even though neither of those companies designed, manufactured, tested, or sold breast implants.” Brief for Dow Corning Corporation, The Dow Chemical Company, and Corning Incorporated at 9. The companies have explained that “[p]laintitfs have generally alleged that the Shareholders are liable for Dow Corning’s acts because they purportedly (1) negligently undertook Dow Corning’s duties in connection with Dow Corning’s products, (2) aided and abetted Dow Corning’s manufacture and sale of unsafe products, or (3) conspired with Dow Corning in the sale by Dow Corning of unsafe or inade- quately tested products.” Id. at 9-10. Dow Corning’s transfer motion covered about one-third of the breast implant claims brought by opt-out plaintiffs against Dow Corning. ' The Minnesota Mining, Baxter, and Bristol-Myers Squibb motions were limited to personal injury actions in which Dow Corning was a named codefendant with one or more of those parties and the plaintiffs had opted out of the Global Settlement. According to Min- nesota Mining, “when [Dow Corning] filed for chapter Il, [it] was a codefendant with [Minnesota Mining] in approximately 75% of implant cases against [Minnesota Mining]. . . [i]n virtually every case, plain- tiffs asserted claims of joint and several liability against [Minnesota Mining] and [Dow Corning] for the full amount of their asserted dam- ages. Additionally, approximately 60% of the cases against [Minnesota Mining] involved plaintiffs who had received multiple sets of breast implants, in separate operations, including implants made by [Min- nesota Mining] and at least one other manufacturer, which in most cases 26a Mining, Baxter, and Bristol-Myers Squibb also asked the dis- trict court to order that the claims at issue be transferred to the district court in which the bankruptcy case is pending so that the court could conduct a consolidated trial on the issue of causation. On September 12, 1995, the district court issued two opin- ions and companion orders regarding the Section 157(b)(5) transfer motions. With respect to opt-out breast implant cases pending against Dow Corning, the district court asserted juris- diction under Section 1334(b) and permitted transfer pursuant to Section 157(b)(5). The district court, however, denied the remainder of the transfer motions on the ground that, as a matter of law, it lacked subject matter jurisdiction over the claims sought to be transferred because they were not “related to” Dow Corning’s bankruptcy proceeding pursuant to 28 U.S.C. § 1334(b). In denying the transfer motions, the district court also directed that individual federal courts nationwide dismiss or sever Dow Corning and/ or remand the combined opt-out actions to state court, and enjoined the nondebtor codefendants from removing any other cases from state to federal court pursuant to 28 U.S.C. § 1452 if the only basis for such removal was 28 U.S.C. § 1334(b) or 28 U.S.C. § 1367(a). In a September 14, 1995 order, the district court extended its rulings to include opt-in breast implant claims included [Dow Corning].” Brief for Minnesota Mining and Manufac- turing Company at 6. The Baxter motion “covered personal injury actions in which both the Debtor and Baxter were named defendants and the plaintiff had opted out of the Global Settlement.” Brief for Bax- ter Healthcare Corporation and Baxter International Inc. at 3. Baxter has stated that the actions in which “both the Debtor and Baxter are defendants number more than 5,000. . . in most of which the Debtor and Baxter are alleged to be joint tortfeasors and jointly and severally liable for the damages asserted.” Id. at 9. Bristol-Myers Squibb motion explained that the company sought to have the district court transfer the opt-out cases in which it was a named codefendant with Dow Corning. Brief for Bristol-Myers Squibb Company and Medical Engineering Cor- poration at 5. The Minnesota Mining, Baxter. and Bristol-Myers Squibb motions covered approximately two-thirds of the breast implant claims asserted by opt-out plaintiffs against Dow Corning. rr reea tenet + pa neni cokaermiapegneg 27a Dow Corning, Dow Chemical, Corning Incorporated, Min- nesota Mining, Baxter, and Bristol-Myers Squibb subse- quently filed appeals seeking review of the district court’s partial denial of their motions to transfer. Those appeals were consolidated on October 10, 1995, and we are now faced with a complex set of questions pertaining to the scope of a district court’s jurisdiction when it sits in bankruptcy, and its power to fix venue for the trial of wrongful death and personal injury tort claims that are “related to” a bankruptcy proceeding. In addressing these issues, we begin, as we do in any case involving a question of statutory construction, with the express language of the statute at issue and an examination of Congressional intent. In addition, we recognize that our deci- sion will significantly impact the future course of this mas- sive litigation. Realizing that we cannot satisfy all competing interests perfectly, our primary goal is to establish a mecha- nism for resolving the claims at issue in the most fair and equitable manner possible. In seeking to achieve that goal, we are called upon to balance four different, and frequently com- peting, interests: those of the individuals who have brought and will bring breast implant claims; Dow Corning’s interests with regard to its attempt to formulate a successful reorga- nization plan; Dow Chemical and Corning Incorporated’s interests as shareholders of Dow Corning; and the judicial System’s interest in allocating its limited resources effectively and efficiently. | II. As a threshold matter, we must determine whether the dis- trict court’s partial denial of the motions to transfer is imme- diately appealable. These issues are certainly fluid. Our general jurisdiction to review a decision or order of a district court sitting in bankruptcy is governed by 28 U.S.C. § 1291. A.H. Robins Co. v. Piccinin, 788 F.2d 994, 1009 (4th Cir.1986), cert. denied, 479 U.S. 876, 107 S.Ct. 251, 93 L.Ed.2d 177 (1986) (“A.H. Robins Co. I’); In re Salem Mort- gage Co., 783 F.2d 626, 629 n. 15 (6th Cir. 1986) (stating that 28a Congress apparently assumed Section 1291 would be avail- able for bankruptcy appeals because that provision was at one time proposed to be the exclusive source of such jurisdiction). Title 28 U.S.C. § 1291 permits appeals only from “final deci- sions of the district courts.” This finality requirement is con- sidered “in a more pragmatic and less technical way in bankruptcy cases than in other situations.” Jn re Cottrell, 876 F.2d 540, 541-42 (6th Cir.1989)(citing In re Amatex Corp.., 755 F.2d 1034, 1039 (3d Cir.1985)). In bankruptcy cases, “a ‘functional’ and ‘practical’ application [of Section 1291] is to be the rule.” A.H. Robins Co. I, 788 F.2d at 1009. The reason for a more relaxed rule of appealability in bankruptcy cases is that: Bankruptcy cases frequently involve protracted pro- ceedings with many parties participating. To avoid the waste of time and resources that might result from reviewing discrete portions of the action only after a plan of reorganization is approved, courts have permit- ted appellate review of orders that in other contexts might be considered interlocutory. Id. at 1009 (citations omitted). Therefore, where an order in a bankruptcy case “finally dispose[s] of discrete disputes within the larger case,” it may be appealed immediately. /n re Saco Local Dev. Corp., 711 F.2d 441, 444 (1st Cir.1983). We find that the district court’s order entered in bankruptcy sat- isfies the finality requirement of Section 1291 for purposes of appealability. We also believe appealability of the district court’s order is . sustainable under the collateral order doctrine of Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949). Cohen holds that it is not always neces- sary that a judgment terminate an action before an appeal may be brought, and permits appellate review of decisions which “finally determine claims of right separable from, and col- lateral to, rights asserted in the action, too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated.” Jd. at 546, 69 S.Ct. at 1225-26. Daa eran i aa 29a A collateral order is reviewable under Cohen when it: (1) con- clusively determines the disputed question; (2) resolves an important question completely separate from the merits of the action; and (3) is effectively unreviewable on appeal from final judgment. Pacor, Inc. v. Higgins, 743 F.2d 984, 988 (3d Cir.1984) (citing Coopers & Lybrand v. Livesay, 437 U.S. 463, 468, 98 S.Ct. 2454, 2457-58, 57 L.Ed.2d 351 (1978)). These three factors are equally fluid and are applied flexibly in determining whether an order involving a bankruptcy pro- ceeding is reviewable. Jn re Pan Am Corp., 16 F.3d 513, 515 (2d Cir.1994) (“In re Pan Am Corp. I’). Here we believe these conditions have been satisfied on all grounds. The district court’s order conclusively determines that claims pending against the nondebtor defendants are not “related to” Dow Corning’s bankruptcy proceeding for purposes of Section 1334(b). In addition, resolution of the “related to” jurisdic- tional question does not involve consideration of the merits of the pending tort claims. Finally, due to the unique circum- stances of this case and the hardship that would inevitably result if we were to refrain from addressing the issues pre- sented by this appeal at this time, the issues presented will be effectively unreviewable after a final judgment is rendered. Because appellate jurisdiction exists, we turn to the ques- tions on appeal. ITI. The first issue to be resolved is whether the district court has subject matter jurisdiction over breast implant claims pending not only against the debtor, Dow Corning, but also over certain claims pending against the nondebtor defendants. The nondebtor defendants argue that such jurisdiction exists pursuant to 28 U.S.C. § 1334(b) or, alternatively, 28 U.S.C. § 1367(a). We review the district court’s jurisdictional ruling de novo. In re Wolverine Radio Co., 930 F.2d 1132, 1138 (6th Cir.1991) (citation omitted). Section 1334 grants jurisdiction to district courts in bankruptcy cases and proceedings as follows: 30a (a) Except as provided in subsection (b) of this section, the district court shall have original and exclusive juris- diction of all cases under title 11. (b) Notwithstanding any Act of Congress that confers exclusive jurisdiction on a court or courts other than the district 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. 28 U.S.C. § 1334 (emphasis added). In addressing the extent of a district court’s bankruptcy jurisdiction under Section 1334(b) over civil proceedings “related to” cases under title 11, we start with the premise that the “emphatic terms in which the jurisdictional grant is described in the legislative history, and the extraordinarily broad wording of the grant itself, leave us with no doubt that Congress intended to grant to the district courts broad juris- diction in bankruptcy cases.” In re Salem, 783 F.2d at 634. Although “situations may arise where an extremely tenuous connection to the estate would not satisfy the jurisdictional | requirement” of Section 1334(b), Robinson v. Mich. Con- sol. Gas Co., Inc., 918 F.2d 579, 584 (6th Cir.1990), Congressional intent was “to grant comprehensive jurisdiction to the bankruptcy courts so that they might deal efficiently and expeditiously with all matters connected with the bankruptcy estate.” Celotex Corp. v. Edwards, 115 S.Ct. 1493, 1499 (1995) (citations omitted). The definition of a “related” proceeding under Section 1334(b) was first articulated by the Third Circuit in Pacor. As stated in that case, the “usual articulation of the test for deter- mining whether a 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, lia- bilities, options, or freedom of action (either positively or negatively) and which in any way impacts upon the handling nD 3la and administration of the bankrupt estate.” Jd. A proceeding “need not necessarily be against the debtor or against the debtor’s property” to satisfy the requirements for “related to” jurisdiction. Jd. However, “the mere fact that there may be common issues of fact between a civil proceeding and a con- troversy involving the bankruptcy estate does not bring the matter within the scope of section [1334(b)].” Jd. (stating also that “[jJudicial economy itself does not justify federal juris- diction”). Instead, “there must be some nexus between the ‘related’ civil proceeding and the title 11 case.” Jd. 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 (noting in doing so that circuit courts have “uniformly adopted an expansive definition of a related proceeding under section 1334(b)”). The majority of our sister circuits have likewise adopted the Pacor test for “related to” jurisdiction. See Jn re G.S.F. Corp., 938 F.2d 1467, 1475 (1st Cir.1991); In re Gard- ner, 913 F.2d 1515, 1518 (10th Cir.1990); In re Lemco Gyp- sum, Inc., 910 F.2d 784, 788 and n.19 (11th Cir.1990); Jn re Fietz, 852 F.2d 455, 457 (9th Cir.1988); In re Wood, 825 F.2d 90, 93 (Sth Cir.1987); In re Dogpatch, U.S.A., Inc., 810 F.2d 782, 786 (8th Cir.1987); A.H. Robins Co. I, 788 F.2d at 1002 n. 11. According to the Supreme Court, the Second and Sev- enth Circuits have adopted slightly different tests for deter- mining whether Section 1334(b) jurisdiction exists. Celotex, 115 S.Ct. at 1499 n. 6 (citing UNR Indus., Inc. v. Continental Casualty Co., 942 F.2d 1101, 1103 (7th Cir.1991), cert. denied 503 U.S. 971 (1992) and In re Turner, 724 F.2d 338, 341 (2d Cir.1983)). In addition, the Supreme Court recently cited Pacor with approval in addressing the broad scope of the jurisdictional grant in Section 1334(b). The Court stated: 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 [Section] 1334(b) was a distinct departure from the jurisdiction conferred under previous acts, which had been limited to 32a either possession 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 that “Congress intended to grant comprehensive jurisdiction to the bankruptcy courts so that they might deal efficiently and expeditiously with all matters con- nected with the bankruptcy estate,” and that the “related to” language of [Section] 1334(b) must be read to give district courts (and bankruptcy courts under [Section] 157(a)) jurisdiction over more than simple proceedings involving the property of the debtor or the estate. Celotex, 115 S.Ct. at 1498-99 (citations omitted) (recogniz- ing at the same time that a bankruptcy court’s jurisdiction cannot be limitless). The Court also stated that proceedings “related to” a bankruptcy proceeding include “suits between third parties which have an effect on the bankruptcy estate.” Jd. at 1499 n. 5 (citing 1 Collier on Bankruptcy § 3.01[1][c][iv], pp. 3-28 (15th ed.1994)). With these stan- dards in mind, we turn to an examination of whether subject matter jurisdiction exists pursuant to Section 1334(b) over joint claims pending against Dow Corning and the various nondebtor defendants. In their briefs and at oral argument, Dow Corning, Dow Chemical, Corning Incorporated, Minnesota Mining, Baxter and Bristol-Myers Squibb proposed several theories for the existence of Section 1334(b) subject matter jurisdiction over certain breast implant claims pending against the nondebtor defendants, no one of which has been clearly determined to definitively confer “related to” jurisdiction under Section 1334(b). Specifically, the defendants argued that contingent claims for contribution and indemnification, jointly-held insurance policies,*® the possibility of collateral estoppel with a corresponding increased exposure to liability, and the bur- - den of defending against the overwhelming number of breast implant claims all give rise to the possibility that the Dow Corning estate will be seriously impacted if the claims at . Dow Chemical and Corning Incorporated are co-insured with Dow Corning under various liability policies. —= 7 | PRAGA ett DEAE IANS RE Nat RE eat tS MOEA Ss tk NSE RD TRS WR a RNR CE aN YA TH Big we Nie ay ate EEL OI OR ioe I AIOE IN ‘ SL OE he PENI RT E> 33a issue, all of which to some degree affect the reorganization of Dow Corning under Chapter 11, are permitted to proceed in separate forums nationwide. We believe two of these theories support a finding that the district court has “related to” juris- diction over claims at issue, and address them in turn. 1. Claims for Contribution and Indemnification Dow Corning, Dow Chemical and Corning Incorporated argue that the district court erred in its determination that “related to” jurisdiction does not exist over certain breast implant claims asserted against Dow Chemical and Corning Incorporated because, in addition to the claims asserted by the personal injury claimants, Dow Chemical and Corning Incor- porated have asserted cross-claims against each other and Dow Corning in the underlying litigation, which will have an effect on the bankruptcy estate.'!° Minnesota Mining, Baxter, and Bristol-Myers Squibb argue that, despite the fact that they have not yet filed contribution and indemnification claims or proofs of claim relating to implant litigation in Dow Corn- ing’s bankruptcy case, they have contingent claims for con- tribution and indemnification that will have a conceivable effect on the bankruptcy proceedings. Minnesota Mining, Baxter, and Bristol-Myers Squibb therefore argue that the breast implant claims covered by their Section 157(b)(5) motions will give rise to thousands of claims against Dow Corning for indemnification and contribution. In addition, the nondebtor defendants claim that Dow Corning may itself have claims against them for contribution and indemnification ’ In our original opinion, we addressed the two additional argu- ments proffered by the movants in support of their assertion that “related to” jurisdiction exists over claims pending against Dow Corn- ing and the nondebtor defendants. Upon reconsideration, we believe our finding that “related to” jurisdiction exists is best supported by the con- tribution and indemnification and joint insurance theories. 10 According to Dow Corning, Dow Chemical, and Corning Incorporated, the shareholders have asserted “thousands of cross-claims for indemnity and contribution against Dow Corning in breast implant suits.” (Brief for Dow Corning Corporation, The Dow Chemical Com- pany, and Corning Incorporated at 21). 34a under theories of joint and several liability. The companies argue that these claims need to be resolved as part of Dow Corning’s bankruptcy proceedings and reorganization plan, and certainly will affect the debtor’s rights, liabilities, options, and freedom of action in the administration of its estate. Relying on Pacor, the district court rejected this basis for “related to” jurisdiction and held that the possibility of con- tribution or indemnification should only be regarded as rel- evant if and when judgments are actually entered against the nondebtors. The district court stated: In the instant case, as in Pacor, there will be no contin- gent claim by the Shareholders against the debtor for indemnification until such time as a judgment is ren- dered and, then, the non-debtors would still have to pro- ceed with an entirely separate proceeding in order to obtain indemnification from the Debtor under 11 U.S.C. § 502. Pacor involved John and Louise Higgins’ claim against the Philadelphia Asbestos Co. (Pacor) in state court seeking dam- ages allegedly caused by Mr. Higgins’ work-related exposure to asbestos supplied by the company. In response, Pacor filed a third-party complaint impleading the Johns-Manville Cor- poration, which Pacor claimed was the original manufacturer of the asbestos. After Johns-Manville filed for Chapter 11, a dispute ensued as to whether the Higgins-Pacor action was “related to” the Manville bankruptcy so that the entire con- troversy could be removed to bankruptcy court. The Third Circuit held that the primary Higgins-Pacor action would not affect the Manville bankruptcy estate, and therefore was not “related to” the bankruptcy proceedings. The court stated that the Higgins-Pacor action was, “[a]t best, a mere precursor to the potential third party claim for indemnification by Pacor against Manville,” and held that, because all issues with regard to Manville’s possible liability would be resolved in a subsequent third party impleader action, “there would be no automatic creation of liability against Manville on account of a BPR LAPEER Wt Sues Aaa ee GRE IME Spt eRe tre 35a a judgment against Pacor.” Pacor, 743 F.2d at 995 (stating also that “[t]here would therefore be no effect on adminis- tration of the estate, until such time as Pacor may choose to pursue its third party claim”). Thus, the court in Pacor viewed the absence of “automatic” liability on the part of the debtor as dispositive in determining that Section 1334(b) “related to” jurisdiction did not exist. It has become clear following Pacor that “automatic” liability is not necessarily a prerequisite for a finding of “related to” jurisdiction. The Third Circuit itself has empha- sized that: 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) (citation omitted). Our Circuit has held that Section 1334(b) “does not require a finding of definite liability of [an] estate as a condition precedent to holding an action related to a bankruptcy pro- ceeding.” In re Salem, 783 F.2d at 635. In Jn re Salem, our Court reversed a district court’s determination that it lacked Section 1334(b) subject matter jurisdiction over a proposed settlement order entered by the bankruptcy court. Prior to bankruptcy, Salem Mortgage Company and related debtor and nondebtor corporations acted as mortgage brokers. Salem and three related corporations filed voluntary petitions under Chapter 11 and the bankruptcy court ordered the petitions of the four debtors consolidated for administration. The Michi- gan Attorney General subsequently filed an adversary pro- ceeding against the debtors and eight other defendants. The major parties in interest negotiated a stipulation for temporary class certification and a proposed final consent judgment, which was conditionally approved by the bankruptcy court. The bankruptcy court eventually entered a Proposed Order Approving Class Certification, Settlement of Class Action 36a Litigation, and Entry of Consent Judgment. While reviewing the proposed order, the district court raised the question of whether it possessed “related to” subject matter jurisdiction | over the adversary proceeding, and concluded it did not. Our | Court reversed that determination stating: The proposed order in this case provided that the plain- tiff classes would release all claims against the debtors arising from the mortgage transactions except for claims concerning the alleged misappropriation of escrow funds. The order also provided that the debtors pay civil penalties under the Michigan Consumer Protection Act. The corporations’ penalties are to be subordinated to the claims of the general creditors. Resolution of the dis- pute, moreover, will affect the liability of the debtors to the investors. For example, to the extent the value of the mortgages is reduced by their reformation, the investors may have an action against the debtors such as breach of the assignment agreement. Because of the nature of these mortgage transactions, we hold that this dispute is sufficiently related to the estate of the bankrupt such that the district court had jurisdiction over the subject matter. Id. at 634. The Court stated that the case was distinguishable from Pacor on the ground that a finding of definite liability of an estate is not a prerequisite to holding an action “related to” a bankruptcy proceeding, and because the parties in the mortgage transactions in the proceeding at issue were “more intertwined” than the parties in Pacor. Id. at 635. This Court’s decision in Jn re Salem has been cited for the proposition that “when [a] plaintiff alleges liability resulting from the joint conduct of the debtor and non-debtor defen-— dants, bankruptcy jurisdiction exists over all claims under section 1334.” In re Wood, 825 F.2d at 94 (citing In re Salem, 783 F.2d at 634). In re Wood involved a dispute among the directors/stockholders of a medical clinic. Dr. Arthur Wood, III sued Dr. and Mrs. James Wood and Woodrow Barham for the wrongful appropriation of corporate assets. Before the filing of Dr. Arthur Wood’s single complaint a SR TRY STRESS Oy ees cupre apa SEMEL ELE HELLO OR I RIE Pe La gs 37a against all three defendants, Dr. and Mrs. James Wood had filed a Chapter 11 petition. A dispute subsequently ensued as to whether the entire matter fell within bankruptcy jurisdic- tion. The Fifth Circuit held that the “complaint [was] suffi- ciently related to the pending bankruptcy to allow the district court to exercise jurisdiction under section 1334.” Jn re Wood, 825 F.2d at 93. The Court further stated: The complaint against the bankruptcy debtors could have a conceivable effect on their bankruptcy. The plaintiff seeks to recover stock and monies that the debtors allegedly appropriated from the clinic. They seek to resolve the disputed allocation of interest in the clinic. To the extent that the debtors’ interest in the Clinic, their stock holdings, or their withdrawals are now property of the estate, the complaint against them has a potential effect on their estate. Id. at 93-94. The Court acknowledged the possibility that the complaint, which raised a post-petition claim, could ulti- mately have no effect on the bankruptcy proceeding. Unable, however, to conclude that the suit would have no conceivable effect on that proceeding, the court found “related to” juris- diction as to both the debtor and nondebtor defendants. stat- ing: The plaintiff has filed one complaint against the defen- dants seeking liability for their joint conduct. Success against any of the defendants will have a potential effect on the estate. For example, if Dr. Wood and his wife are held liable but Barham is not, the bankrupt estate may bear the entire burden of the judgment. If, on the other hand, Barham is found jointly liable, the estate may bear only a portion of the judgment. Moreover, in filing the complaint, the plaintiff challenged the combined actions of both the debtors and Barham, a non-debtor. Res- olution of the dispute will necessarily involve, there- fore, consideration of Barham’s involvement in those actions. We find support in the Court of Appeals for the Sixth Circuit and lower courts, which have held that 38a when the plaintiff alleges liability resulting from the joint conduct of the debtor and non-debtor defendants, bankruptcy jurisdiction exists over all claims under sec- tion 1334. Id. at 94. The degree of identity between a debtor and nondebtor codefendants was an important factor in A.H. Robins Co. I, a mass tort case involving the Dalkon Shield, an intrauterine contraceptive device. In that case, A.H. Robins was faced with an overwhelming number of federal and state actions seeking damages for injuries allegedly sustained by the use of the Dalkon Shield. The pending litigation caused A.H. Robins, the manufacturer of the device, to file a petition under Chapter 11 of the Bankruptcy Code. By the time A.H. Robins filed its petition, over 5,000 suits had been filed. More than half named A.H. Robins as the sole defendant, while a codefendant or codefendants were named in the others. When the filing of the petition automatically stayed all suits against AH. Robins under Section 362(a), a number of plaintiffs in suits in which A.H. Robins was named along with at least one codefendant sought to sever their actions against A.H. Robins and proceed against the codefendant or codefendants. A.H. Robins then sought injunctive relief restraining the prosecu- tion of the actions against its codefendants. The district court granted a preliminary injunction, holding that all actions that might be satisfied from proceeds of the debtor’s products lia- bility policy with Aetna Casualty and Insurance Company were stayed, and enjoined further litigation in eight civil actions. Shortly after entry of the preliminary injunction, A.H. Robins moved for: a determination of trial venue of all Dalkon Shield suits; identification of such cases as were “related to” the Chapter 11 case; and transfer of such cases to the Eastern District of Virginia for trial. The district court held that: (1) pursuant to Section 1334(b), all actions based upon personal injury tort or wrongful death claims arising from the use of the Dalkon Shield were proceedings related to the Chapter 11 case; (2) pursuant to Sections 157(b)(5) and a as el a a ee ts ee el 39a 1334(b), all such actions, wherever pending, were to be tried in the Eastern District of Virginia; (3) all actions related to the Chapter 11 case then pending in or subsequently removed to any federal district court during the pendency of the Chap ter 11 case were to be transferred to the Eastern District of Virginia; and (4) the court was not prevented from later abstaining under Section 1334(c)(1) or remanding under Sec- tion 1452(b). This order and the preliminary injunction were both appealed to the Fourth Circuit. In discussing the propriety of the stay issued against A.H. Robins’ nondebtor codefendants, the Fourth Circuit stated that, although Section 362(a)(1) is generally available only to a debtor, proceedings against nonbankrupt codefendants may be stayed by a bankruptcy court where there are “unusual circumstances.” A.H. Robins Co. I, 788 F.2d at 999. Such a Situation arises when “there is such identity between the debtor and the third-party defendant that the debtor may be said to be the real party defendant and that a judgment against the third-party defendant will in effect be a judgment or find- ing against the debtor.” Jd. The court stated that “an illus- tration of such a situation would be a suit against a third-party who is entitled to absolute indemnity by the debtor on account of any judgment that might result against them in the case.” Id. In addition, such a relationship may exist where code- fendant liability is “directly attributable to the debtor.” /d. at 1004. Based on the principles outlined above, we believe the dis- trict court has “related to” subject matter jurisdiction over the breast implant claims pending against the nondebtor defen- dants in this case. Thousands of suits asserted against Dow Corning include claims against the nondebtors, and the nature of the claims asserted establishes that Dow Corning and the various nondebtor defendants are closely related with regard to the pending breast implant litigation.'' Dow Chemical and '| The opt-out claims asserted against Dow Corning and the var- ious nondebtor defendants generally can be divided into four cate- gories: (i) “Multiple Implant Actions,” which are actions where plaintiffs received implants manufactured by both Dow Corning and one or more of the nondebtors; (ii) “Supplier Actions,” which involve 40a Corning Incorporated have already asserted cross-claims against each other and Dow Corning in the underlying liti- gation, and the other nondebtor defendants have asserted repeatedly throughout their briefs, motions, and oral argu- ments that they intend to file claims for contribution and indemnification against Dow Corning, and we have no reason to doubt the veracity of those assertions at this time. We find that it is not necessary for the appellees first to prevail on their claims against the nondebtor defendants, and for those companies to establish joint and several liability on Dow Corning’s part, before the civil actions pending against the nondebtors may be viewed as conceivably impacting Dow Corning’s bankruptcy proceedings. The claims currently pending against the nondebtors give rise to contingent claims against Dow Corning whieh unquestionably could ripen into fixed claims. The potential for Dow Corning’s being held liable to the nondebtors in claims for contribution and indem- nification, or vice versa, suffices to establish a conceivable impact on the estate in bankruptcy. Claims for indemnifica- tion 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 the overwhelming number of cases asserted against Dow Corning and the nondebtor defendants in this case. A single possible claim for indemnification or contribution sim- ply does not represent the same kind of threat to a debtor’s claims against the nondebtors as manufacturers and claims against Dow Corning as the supplier of silicone materials to the nondebtors; (iii) “Conspiracy Actions,” which allege that Dow Corning and the non- debtors conspired to defraud the plaintiffs by fraudulently withholding material information regarding the hazards of breast implants: and (iv) “Form Complaint Actions,” which simply name Dow Corning and the nondebtors as defendants without making any specific allegations of individual wrongdoing. (See Motion of Minnesota Mining and Manu- facturing Company for an Order Pursuant to 28 U.S.C. § 157(b)(5) at 7). 4la reorganization plan as that posed by the thousands of poten- tial indemnification claims at issue here. Cognizant of the fact that “related to” jurisdiction cannot be limitless and concerned about granting benefits of the automatic stay in bankruptcy to solvent codefendants, we nev- ertheless believe the possibility of contribution or indemni- fication liability in this case is far from attenuated. We conclude that Section 1334(b) juri_ci cion exists over the actions pending against Dow Chemical, Corning Incorporated, Minnesota Mining, Baxter, and Bristol-Myers Squibb that are the subject of the companies’ Section 157(b)(5) motions. 2. Joint Insurance Dow Corning, Dow Chemical and Corning Incorporated also argue that “related to” jurisdiction exists as to claims pending against the shareholders because the three companies share joint insurance. We believe this argument provides addi- tional support for the existence of “related to” jurisdiction under the unique facts of this case, but address it only briefly because we have already concluded that Section 1334(b) jurisdiction exists over breast implant claims pending against Dow Corning and one or both of its parents. Dow Corning, Dow Chemical and Corning Incorporated are co-insured under various insurance policies, which together provide over $1 billion in coverage. Dow Corning’s interest in the policies is one of the largest assets of its bankruptcy estate. In addition, Dow Corning recently entered into ten new insurance settlements under which the estate will receive, if approved by the bankruptcy court, approximately $350 to $450 million in cash. Most of these settlements involve poli- cies under which Dow Chemical or Corning Incorporated is a co-insured. Dow Corning, Dow Chemical, and Corning Incorporated claim that the district court’s order, by allowing thousands of claims to proceed separately against Dow Chemical and Corn- ing Incorporated, will diminish the value of this major bankruptcy asset to the extent that settlements, judgments and defense costs incurred by the shareholders will exhaust pol- 42a icy limits otherwise available to Dow Corning, its creditors, and individuals asserting claims in the bankruptcy proceed- ings. In addition, all three co-insureds argue that the policies will be further diminished if and when payments must be made to Minnesota Mining, Baxter, or Bristol-Myers Squibb. Dow Chemical has already notified insurers that it is assert- ing claims against the jointly-held policies on the ground that, as a co-insured, it is entitled to recover from the insurers all of its defense costs, as well as any settlements or judgments paid by it in litigating breast implant claims. The concern, then, is that permitting scores of trials against the share- holders to go forward while litigation against the debtor is stayed may result in the shareholders making claims for insur- ance and seeking and obtaining payment from the insurers before Dow Corning is able to make any claims of its own. The district court rejected this argument for the existence of “related to” jurisdiction, holding that, while a bankruptcy court has broad discretion over a debtor’s interest in a lia- bility insurance policy shared with a nondebtor, no judgment has been entered yet against Dow Chemical or Corning Incor- porated and neither company has a claim pending against the insurance policies at this time. We believe the district court is in error because, as we stated earlier, an immediate impact on a debtor’s estate is not a prerequisite for Section 1334(b) jurisdiction. Under the facts of this case, we believe the pos- sible depletion of insurance policies depends on contingencies sufficiently immediate to support a finding of “related to” jurisdiction. See, e.g., A.H. Robins Co. I, 788 F.2d at 1008 (stating that “irreparable harm would be suffered by the debtor and by the defendants since any of [the] suits against [the] co-defendants, if successful, would reduce and diminish the [debtor’s] insurance fund”); In re Zale Corp., 62 F.3d 746, 758-59 (5th Cir.1995) (concluding that, where disputes regarding an insurance policy can have an effect on a debtor’s estate, the bankruptcy court has “related to” jurisdiction over nondebtors’ claims against the insurer); Coar v. National Union Fire Ins. Co., 19 F.3d 247, 249 (Sth Cir.1994) (stating that, where there is a “cognizable threat” that insurance pol- icy proceeds would not cover plaintiffs’ claims and could pene apitaite ee i ‘i te Me Hiden ROI So a 43a expose the debtor’s estate to liability, a suit against a debtor’s insurer is “related to” the debtor’s bankruptcy case): Jn re Titan Energy, Inc., 837 F.2d 325, 329 (8th Cir.1988) (noting that the scope of a products liability insurance policy affects the size of a debtor’s estate for distribution). Dow Corning’s interest in the insurance policies at issue is property of its estate under the expansive definition set forth in 11 U.S.C. § 541(a)(1). The threat posed to those insurance policies if claims pending against Dow Chemical and Corning Incorporated are permitted to go forward in a separate man- ner supports a finding of “related to” jurisdiction under Sec- tion 1334(b). The prospect of Dow Chemical and Corning Incorporated being able to assert mature, liquidated claims against the insurance proceeds if litigation pending against them is permitted to go forward demonstrates a conceivable impact on the bankruptcy proceedings. If it is determined that Dow.Chemical or Corning Incorporated has a priority to the insurance proceeds, even if the bankruptcy court has the Power to prevent payments of the proceeds while Dow Corn- ing is in bankruptcy, the risk remains that the insurance cov- erage may be eviscerated when the proceeds are eventually distributed. In addition, certain of the policies cover defense expenses, and those costs alone may Significantly reduce the pool of coverage available to Dow Corning if the claims pending against Dow Chemical and Corning Incorporated are allowed to proceed separately. In addition, the bankruptcy court has yet to determine whether it has the power to prevent Dow Corning’s co-insureds from receiving proceeds of the jointly-held policies while Dow Corning is in bankruptcy. Resolution of the dispute over the right to proceeds alone will have a conceivable effect on Dow Corning’s bankruptcy proceedings. IV. We next address the power of the district court, sitting in bankruptcy, to fix the venue for the trial of personal injury tort and wrongful death claims asserted in non-bankruptcy 44a forums pursuant to 28 U.S.C. § 157(b)(5). Section 157(b)(5) provides: The district court shall order that personal injury tort and wrongful death claims shall be tried in the district court in which the bankruptcy case is pending, or in the dis- trict court in the district in which the claim arose, as determined by the district court in which the bankruptcy case is pending. The purpose of Section 157(b)(5) is “to centralize the admin- istration of the estate and to eliminate the ‘multiplicity of forums for the adjudication of parts of a bankruptcy case.’ ” A.H. Robins Co. I, 788 F.2d at 1011 (citation omitted). Cen- tralization of claims increases the debtor’s odds of develop- ing a reasonable plan of reorganization which will “work a rehabilitation of the debtor and at the same time assure f [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386013_1173%3A1. Public record. Not legal advice.