Dow Corning Corp., In re

Decision Date09 April 1996
Docket Number95-2106,95-2082,Nos. 95-2034,95-2084,s. 95-2034
Citation86 F.3d 482
PartiesBankr. L. Rep. P 76,921 In re DOW CORNING CORPORATION, Debtor. Heidi LINDSEY, et al.; Official Committee of Tort Claimants, et al., Plaintiffs-Appellees, v. 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); Minnesota Mining and Manufacturing Co. (95-2084); Bristol-Myers Squibb Co.; Medical Engineering Corporation (95-2106), Defendants-Appellants. , and 95-2107.
CourtU.S. Court of Appeals — Sixth Circuit
& Frankel, New York City, Dennis Meir, Alfred S. Lurey, Kilpatrick & Cody, Atlanta, GA, Lenard M. Parkins, Patrick L. Hughes, Verner, Liipfert, Bernard, McPherson & Hand, Houston, TX, Thomas D. Lambros, Bricker & Eckler, Columbus, OH (of Counsel), for Official Committee of Tort Claims.

Sheldon S. Toll, Sheryl L. Toby, Honigman, Miller, Schwartz & Cohn, Detroit, MI, Lynn E. Busath, Ogden N. Lewis (briefed), Davis, Polk & Wardwell, New York City, for Intervenor Official Committee of Unsecured Creditors' of Dow Corning Corporation in Support of Appeals.

Dennis S. Meir, Kilpatrick & Cody, Atlanta, GA, for Heidi Lindsey.

Patricia Howard, Washington, DC, for MDL Panel.

Lenard M. Parkins, Verner, Liipfert, Bernard, McPherson & Hand, Houston, TX, for John M. O'Quinn.

Daniel W. McDonald (briefed), McDonald, Clay & Crow, LLP, Fort Worth, TX, Frank Cain, Bowers & Cain, Fort Worth, TX, Ben C. Martin, Ben C. Martin, Dallas, TX, J. Mark Howell, J. Kevin Clark, Clark & Howell, Fort Worth, TX, Michael P. McGartland, Chappell & McGartland, LLP, Fort Worth, TX, Stephen C. Stapleton (briefed), Russell L. Munsch, Munsch Hardt Kopf Harr & Dinan, P.C., Dallas, TX, for Appellees Johnson County, Texas Plaintiffs.

John M. O'Quinn (argued & briefed), Richard N. Laminack, Thomas W. Pirtle, O'Quinn, Kerensky, McAninch & Laminack, Houston, TX, for Appellees Breast Implant Tort Claimants represented by John O'Quinn.

Martha K. Wivell (briefed), Robins, Kaplan, Miller & Ciresi, Costa Mesa, CA, for amicus curiae California Plaintiffs' Steering Committee.

James C. Schroeder, Theresa A. Canaday, Herbert L. Zarov (briefed), Mayer, Brown & Platt, Chicago, IL, for The Dow Chemical Co. and Corning Corp.

William D. Eggers (briefed), Nixon Hargrave Devans & Doyle, LLP Rochester, NY, for Corning, Inc.

Leslie Berg, Trustee, Office of the United States Trustee, Detroit, MI, pro se.

Marion J. Mack, Trustee, Office of the United States Trustee, Detroit, MI, for Dow Corning Corp. in Nos. 95-2082, 95-2106.

Larry J. Nyhan, James F. Conlan, Sidley & Austin, Chicago, IL, Judy A. O'Neill, Laura J. Eisele, Dykema & Gossett, Detroit, MI, Thomas E. Pitts, Jr. (argued & briefed), Sidley & Austin, New York City, for Baxter Healthcare Corp. and Baxter Int'l Inc.

James F. Conlan, Sidley & Austin, Chicago, IL, for Baxter Intern. Inc.

Barbara J. Houser (argued), George H. Tarpley, Sheinfeld, Maley & Kay, Dallas, TX, for Dow Corning Corp.

Greg A. Danilow, Bruce R. Zirinsky (argued & briefed), Martin J. Bienenstock, Howard B. Comet, Arvin Maskin, Weil, Gotshal & Manges, New York City, Susan Healy Zitterman (briefed), Richard A. Kitch, John Paul Hessburg, Kitch, Drutchas, Wagner & Kenney, Detroit, MI, for Minnesota Min. and Mfg. Co.

Robert W. Powell (briefed), Dickinson, Wright, Moon, Van Dusen & Freeman, Detroit, MI, Hayden Smith, Jr. (briefed), David J. Adler, McCarter & English, Newark, NJ, Thomas E. Pitts, Jr. (argued), Sidley & Austin, New York City, for Bristol-Myers Squibb Co. and Medical Engineering Corp.

Before: MARTIN and BATCHELDER, Circuit Judges; WISEMAN, District Judge. *

ORDER
June 3, 1996

The court having received two petitions for rehearing en banc, and the petitions having been circulated not only to the original panel members but also to all other active judges of this court, and no judge of this court having requested a vote on the suggestion for rehearing en banc, the petitions for rehearing This panel has further reviewed the petitions for rehearing and concludes that the issues raised in the petitions were fully considered upon the original submission and decision of the case. Accordingly, the petitions are denied.

have been referred to the original hearing panel.

This panel is, however, issuing an amended opinion in which we adhere to the April 9, 1996 decision in this case, but seek to clarify the scope of the ruling and the impact it is intended to have. The opinion is therefore amended and reissued as follows. Mandate to issue immediately.

AMENDED OPINION

BOYCE F. MARTIN, Jr., Circuit Judge.

This is an appeal to determine the subject matter jurisdiction 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 damages asserted in tens of thousands of actions against numerous 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 proceedings consistent with this opinion. 1

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 manufacturers 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 Company, Baxter Healthcare Corporation and Baxter International Incorporated, 2 and Bristol-Myers Squibb Company and Medical Engineering Corporation 3 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 Multidistrict Litigation ordered the consolidation of all breast implant actions pending in federal courts for coordinated pretrial proceedings, 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 creation 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 opportunity to opt out of the class and to pursue her individual claims separately. Several thousand plaintiffs opted out of the settlement class, while approximately 440,000 elected to register for inclusion in the Global Settlement. 4

Due to the litigation burden imposed by what is one of the world's largest mass tort litigations, and the threatened consequences 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 proceeding 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 Chemical and Corning Incorporated, and the other nondebtor defendants were not stayed. Dow Chemical, Corning Incorporated, Minnesota Mining, Baxter and Bristol-Myers Squibb subsequently removed many opt-out claims in which those companies 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) 5 to transfer to the Eastern District of Michigan opt-out breast implant claims pending against it and its shareholders, Dow Chemical and Corning Incorporated. 6 Dow Corning's motion covered claims that had been 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 wit...

To continue reading

Request your trial
405 cases
  • In Re Joseph Francis Swain
    • United States
    • United States Bankruptcy Courts. Tenth Circuit. U.S. Bankruptcy Court — Eastern District of Michigan
    • September 27, 2010
    ...743 F.2d 984, 994 (3d Cir.1984) (emphasis in original)); see also Lindsey v. O'Brien, Tanski, Tanzer and Young Health Care Providers of Connecticut (In re Dow Corning Corp.), 86 F.3d 482, 489, 490 (6th Cir.1996). In enacting § 1334(b), “Congressional intent was ‘to grant comprehensive juris......
  • LTL Mgmt., LLC v. Those Parties Listed on Appendix a to Complaint (In re LTL Mgmt., LLC)
    • United States
    • U.S. Bankruptcy Court — District of New Jersey
    • February 25, 2022
    ...11 and potentially deplete available insurance coverage—frustrating the purpose of the automatic stay. See, e.g. , In re Dow Corning Corp. , 86 F.3d 482, 494 (6th Cir. 1996), as amended on denial of reh'g and reh'g en banc (June 3, 1996) ("The potential for Dow Corning's being held liable t......
  • LTL Mgmt., LLC v. State ex rel. Balderas (In re LTL Mgmt., LLC)
    • United States
    • U.S. Bankruptcy Court — District of New Jersey
    • October 4, 2022
    ...the pending consumer protection claims be liquidated at this juncture outside of the chapter 11 case. See, e.g. , In re Dow Corning Corp. , 86 F.3d 482, 494 (6th Cir. 1996), as amended on denial of reh'g and reh'g en banc (June 3, 1996) ("The potential for Dow Corning's being held liable to......
  • Jove Engineering, Inc. v. I.R.S.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • August 29, 1996
    ...way in bankruptcy cases than in other situations." In re Amatex Corp., 755 F.2d 1034, 1039 (3d Cir.1985); see In re Dow Corning, 86 F.3d 482, 487-88 (6th Cir.1996); In re Greene County Hospital, 835 F.2d 589, 594 (5th Cir.1988) (citing In re Saco Local Development Corp., 711 F.2d 441 (1st C......
  • Request a trial to view additional results
3 firm's commentaries
6 books & journal articles
  • The Pesky Persistence of Class Action Tolling in Mass Tort Multidistrict Litigation
    • United States
    • Louisiana Law Review No. 74-2, January 2014
    • January 1, 2014
    ...large numbers of claimants applying to the settlement fund and Dow Corning’s subsequent bankruptcy filing. See In re Dow Corning Corp., 86 F.3d 482, 486 (6th Cir. 1996). 116. In re Diet Drugs Prods. Liab. Litig., Nos. 1203, 99–20593, 2000 WL 1222042, at *41–42 (E.D. Pa. Aug. 28, 2000) (cert......
  • THE LAW WANTS TO BE FORMAL.
    • United States
    • January 1, 2021
    ...F.3d 922, 931 (6th Cir. 2000); Lindsey v. O'Brien, Tanski, Tanzer & Young Health Care Providers of Conn. (In re Dow Corning Corp.), 86 F.3d 482, 494-95 (6th Cir. 1996); XL/Datacomp, Inc. v. Wilson (In re Omegas Grp., Inc.), 16 F.3d 1443, 1448 (6th Cir. 1994); DAGAN, supra note 47, at 29......
  • Judicial independence, autonomy, and the bankruptcy courts.
    • United States
    • Stanford Law Review Vol. 62 No. 3, March 2010
    • March 1, 2010
    ...in Celotex for endorsing "related to" jurisdiction without properly considering its constitutionality). (174.) See In re Dow Coming Corp., 86 F.3d 482, 485 (6th Cir. 1996) (finding related to jurisdiction over tort claims by non-debtor plaintiffs against non-debtor (175.) 28 U.S.C. [section......
  • Beyond maturity: mass tort case management in the Manual for Complex Litigation.
    • United States
    • University of Pennsylvania Law Review Vol. 148 No. 6, June 2000
    • June 1, 2000
    ...three criteria that are "presumptively necessary" before a limited fund class action may be certified). (158) See In re Dow Corning Corp., 86 F.3d 482, 495-96 (6th Cir. 1996), cert. denied sub nom. Official Comm. of Tort Claimants v. Dow Corning Corp., 519 U.S. 1071 (1997) (noting that the ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT