In Re Dow Corning Corporation

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

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Nature of the Case

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Facts

P was the predominant producer of silicone gel breast implants, accounting for nearly 50% of the entire market. P supplied silicone raw materials to other manufacturers of silicone gel breast implants. Tens of thousands of implant recipients have sued P, claiming to have been injured by autoimmune reactions to the silicone in their implants. Prior to P's filing Chapter 11, 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. 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 the costs of treatment and other expenses incurred by breast implant recipients. Class members were given the opportunity to opt-out of the class and to pursue their individual claims. Several thousand members opted out of the settlement class, while approximately 440,000 elected to register for inclusion. P filed Chapter 11 on May 15, 1995. All breast implant claims against it were automatically stayed under §362(a). Claims against P's two shareholders, Dow Chemical and Corning Incorporated, and the other nondebtor parties were not stayed. P filed a motion to transfer to the Eastern District of Michigan opt-out breast implant claims pending against it and its shareholders, P wanted to ensure 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 P's motion. With respect to opt-out breast implant cases pending against P, the district court asserted jurisdiction under Section 1334(b) and permitted transfer pursuant to Section 157(b)(5). It 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' P's bankruptcy proceeding pursuant to §1334(b). It then directed that individual federal courts nationwide dismiss or sever P 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 §1452 if the only basis for such removal was §1334(b) or §1367(a). P, Dow Chemical, Corning Incorporated, Minnesota Mining, Baxter, and Bristol-Myers Squibb appealed seeking a review of the district court's partial denial of their motions to transfer.