Sutherland v. DCC Litig. Facility, Inc. (In re Dow Corning Corp.)

• Decision Date: 20 February 2015
• Docket Number: No. 13–1497.,13–1497.
• Citation: 778 F.3d 545
• Parties: In re DOW CORNING CORPORATION, Reorganized Debtor. Pamela D. Sutherland, Plaintiff–Appellant, v. DCC Litigation Facility, Inc., Defendant–Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

778 F.3d 545

In re DOW CORNING CORPORATION, Reorganized Debtor.Pamela D. Sutherland, Plaintiff–Appellant

v.DCC Litigation Facility, Inc., Defendant–Appellee.

No. 13–1497.

United States Court of Appeals, Sixth Circuit.

Argued: Jan. 30, 2014.

Decided and Filed: Feb. 20, 2015.

Rehearing Denied March 18, 2015.

ARGUED:Mark R. Bendure, Bendure & Thomas, Detroit, Michigan, for Appellant. Robert D. Goldstein, Garan Lucow Miller, P.C., Grand Blanc, Michigan, for Appellee. ON BRIEF:Mark R. Bendure, Bendure & Thomas, Detroit, Michigan, for Appellant. Robert D. Goldstein, Timothy J. Jordan, Garan Lucow Miller, P.C., Grand Blanc, Michigan, for Appellee.

Before: MERRITT, SUTTON, and STRANCH, Circuit Judges.

STRANCH, J., delivered the opinion of the court in which MERRITT, J., joined. SUTTON, J. (pp. 554–56), delivered a separate dissenting opinion.

OPINION

JANE BRANSTETTER STRANCH, Circuit Judge:

In 1988 Pamela Sutherland received breast implants in North Carolina. She filed suit in the Middle District of North Carolina five years later, after learning that the silicone in her implants could be causing a variety of serious medical problems. The Silicone's manufacturer, Dow Corning, filed for bankruptcy in the Eastern District of Michigan, and Sutherland's suit was transferred there. In 2012, twenty-four years after Sutherland received the implants, the district court concluded that Sutherland's claim was barred by Michigan's statute of limitations and granted summary judgment to the defendant. The district court should have applied North Carolina's law instead of Michigan's, and should have concluded that there was a genuine factual issue as to whether Sutherland's claim was timely-filed under North Carolina law. We therefore REVERSE the district court and remand for proceedings consistent with this opinion.

I. PROCEDURAL HISTORY

In 1988 Pamela Sutherland, a Virginia resident, received breast implants at Duke University Hospital in North Carolina. The silicone-based filling in the implants was produced by Dow Corning, whose corporate headquarters is in Michigan. In 1993 Sutherland filed suit in the Middle District of North Carolina alleging that the silicone in her implants was causing a wide range of serious health problems. Sutherland's was one of tens of thousands of silicone-related cases brought against Dow Corning. A multidistrict litigation panel transferred the cases to the Northern District of Alabama where, in 1994, a class settlement was reached. Sutherland opted out of the class. In 1995 Dow Corning filed for bankruptcy in the Eastern District of Michigan and Sutherland's claim was transferred to that district as “related to” the bankruptcy, pursuant to 28 U.S.C. § 157(b)(5). See In re Dow Corning Corp., 86 F.3d 482, 485–88 (6th Cir.1996) ; In re Dow Corning Corp., 113 F.3d 565 (6th Cir.1997). After a series of appeals, see id., the district court asserted jurisdiction over all silicone-related tort claims against Dow Corning. The district court established the procedures for opt-out claimants in a series of global case management orders. As part of the bankruptcy reorganization, Dow Corning agreed to create and fund a DCC Settlement Facility to handle the class action and a DCC Litigation Facility (“DCC”) to deal with opt-out claims.

In 2009, after settlement negotiations failed, DCC moved to certify the case for trial. The district court certified the case and ordered Sutherland to file a new complaint, which Sutherland filed on January 5, 2010, and DCC answered on January 19. The case moved towards trial. Sutherland was deposed on November 2, 2011, roughly 23 years after she received the implants and 18 years after first filing suit. In May 2012 DCC filed five separate motions for summary judgment, two of which are relevant to this appeal: One motion argued that Sutherland's claim was time-barred by the relevant statute of limitations; the other argued that Sutherland had failed to provide evidence of general causation.

The district court granted summary judgment to DCC on statute-of-limitations grounds and explicitly declined to address as unnecessary any of DCC's other arguments. The court concluded that, although North Carolina, Virginia, and Michigan law might apply to Sutherland's claim, a choice of law analysis was unnecessary and applied Michigan law. There was, the district court found, no question that Sutherland's claim accrued shortly after she received the implants, and no question that her claim was untimely. This appeal followed.

II. STANDARD OF REVIEW

We review a district court's grant of summary judgment de novo. Geiger v. Tower Auto., 579 F.3d 614, 620 (6th Cir.2009). Summary judgment is appropriate if there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). As the party seeking summary judgment, DCC must show there are no genuine issues of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). All facts, including inferences, are viewed in the light most favorable to Sutherland, the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The central issue is whether the evidence presents a sufficient disagreement regarding whether Sutherland's claims are time-barred to require submission of Sutherland's claims to a jury or whether the evidence is so one-sided that DCC must prevail as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251–52, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

In resolving issues of state law, the panel looks to “the final decisions of that state's highest court, and if there is no decision directly on point, then we must make an Erie guess to determine how that court, if presented with the issue, would resolve it.” Conlin v. Mortg. Elec. Registration Sys., Inc., 714 F.3d 355, 358–59 (6th Cir.2013). We “usually defer” to our sister circuits' analyses of the law of the states within their respective borders. U.S. v. Maness, 23 F.3d 1006, 1008 (6th Cir.1994) ; Curtis 1000, Inc. v. Martin, 197 Fed.Appx. 412, 422 n. 4 (6th Cir.2006) ; see also Dawn Equip. Co. v. Micro–Trak Sys., Inc., 186 F.3d 981, 989 n. 3 (7th Cir.1999). Mellon Bank, N.A. v. Ternisky, 999 F.2d 791, 796 (4th Cir.1993). Unless the home circuit has “disregarded clear signals emanating from the state's highest court pointing towards a different rule” we will avoid creating “the oddity of a split in the circuits over the correct application” of one state's law. Abex Corp. v. Maryland Cas. Co., 790 F.2d 119, 125 (D.C.Cir.1986) (internal citations and quotation marks omitted); see also Curtis 1000, 197 Fed.Appx. at 422 n. 4 (quoting Abex, 790 F.2d at 125 ).

III. CHOICE OF LAW ANALYSIS

Although Sutherland's case came to the Middle District of North Carolina via diversity jurisdiction, it ended up in the Eastern District of Michigan by virtue of bankruptcy jurisdiction. The district court (that is, the Eastern District of Michigan) originally obtained jurisdiction over this case pursuant to 28 U.S.C. § 1334(b), which grants “the district courts ... original but not exclusive jurisdiction of all civil proceedings ... related to cases under title 11.” See Dow Corning, 86 F.3d at 489. Sutherland's claim was thus “related to” the Dow Corning bankruptcy-it conceivably could have had an effect on the Dow Corning estate. See id. at 489.

Sutherland's claim was transferred to the Eastern District of Michigan pursuant to 28 U.S.C. § 157(b)(5), which allows the district court “to fix the venue for the trial of personal injury tort and wrongful death claims asserted in non-bankruptcy forums.” Dow Corning, 86 F.3d at 495–96. Section 157(b)(5) reads:

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.

The section does not grant jurisdiction. Stern v. Marshall, –––U.S. ––––, 131 S.Ct. 2594, 2606, 180 L.Ed.2d 475 (2011). Rather, “[t]he purpose of Section 157(b)(5) is to ‘centralize the administration of the estate and to eliminate the multiplicity of forums for the adjudication of parts of a bankruptcy case.’ ” Dow Corning, 86 F.3d at 496 (quoting A.H. Robins Co. v. Piccinin, 788 F.2d 994, 1011 (4th Cir.1986) (internal quotation marks omitted); see also 1–3 Collier on Bankruptcy ¶ 3.06[3]. There is no indication that Congress intended § 157(b)(5) to be used to alter the substantive law governing the state-law cases transferred under it. Rather, Congress intended § 157(b)(5) to promote efficiency simply by allowing courts to centralize personal injury and wrongful death cases “related to” a bankruptcy. See A.H. Robins, 788 F.2d at 1011 ; Baumgart v. Fairchild Aircraft Corp., 981 F.2d 824, 829–34 (5th Cir.1993) ; In re Pan Am. Corp., 950 F.2d 839, 845 (2d Cir.1991) ).

So, although this case looks very much like a diversity case, it is not quite a diversity case—it is a type of “related to” bankruptcy case. The distinction matters only because it raises a narrow question of first impression for this circuit: Should a change of venue under § 157(b)(5) alter which state's law governs or, as in diversity, should a change of venue have no impact on which state law applies?

There is no question that if this were a diversity case whose venue was transferred pursuant to the multidistrict litigation statute, 28 U.S.C. § 1407, or general change-of-venue statute, 28 U.S.C. § 1404, the district court would be bound to apply North Carolina's choice of law rules. In Van Dusen v. Barrack and Ferens v. John Deere Company, the Supreme Court made clear that normally the appropriate state's choice of law rule attaches when and where the plaintiff files her complaint and then travels with the case. Ferens v. John...