## Facts

- Dow Corning Corporation manufactured silicone-gel breast implants and silicone gel used by other manufacturers.
- Tens of thousands of recipients filed tort suits alleging implant-related injuries.
- Federal cases were centralized in multidistrict litigation, and a nationwide settlement class was certified; thousands of plaintiffs opted out to pursue individual actions.
- Dow Corning filed a Chapter 11 petition in the Eastern District of Michigan amid mounting litigation pressures.
- The automatic stay halted claims against Dow Corning, but not claims against non-debtor entities such as its parent companies and other co-defendants.
- Dow Corning sought to remove and centralize implant-related actions (including suits solely against non-debtors) in the Eastern District of Michigan under bankruptcy “related to” jurisdiction and bankruptcy removal.

## Issues

1. Whether the district court had “related to” jurisdiction under 28 U.S.C. § 1334(b) over breast-implant tort actions against non-debtor parent and affiliated companies.
2. Whether potential indemnity or contribution claims and shared insurance arrangements between the debtor and non-debtors can create a sufficient connection to the bankruptcy estate.
3. Whether mass-tort centralization tied to reorganization feasibility supports a finding that non-debtor litigation could conceivably affect estate administration.

## Decision

- The Sixth Circuit reversed the district court’s determination that it lacked subject-matter jurisdiction over the suits against non-debtor co-defendants.
- The court held that the actions against the non-debtors were “related to” the Chapter 11 case under § 1334(b) because their outcomes could conceivably affect the debtor’s estate and reorganization.
- The court concluded the non-debtor actions were therefore removable under 28 U.S.C. § 1452(a).

## Legal Principles

- A civil proceeding is “related to” a bankruptcy case if its outcome could conceivably have any effect on the estate being administered in bankruptcy.
- “Related to” jurisdiction exists where a proceeding could alter the debtor’s rights, liabilities, options, or freedom of action, or otherwise affect the handling and administration of the estate.
- Potential, contingent indemnity or contribution exposure to the debtor can satisfy the “conceivable effect” standard; a fixed judgment or matured claim is not required.
- Shared insurance coverage and overlapping liability theories can create a sufficient connection between non-debtor litigation and estate assets for § 1334(b) jurisdiction.
- In a mass-tort Chapter 11, proceedings bearing on the debtor’s ability to propose and confirm a feasible plan may fall within “related to” jurisdiction when they plausibly affect estate administration.

## Conclusion

The Sixth Circuit held that the bankruptcy court’s “related to” jurisdiction extends to mass-tort actions against non-debtor affiliates and co-defendants when the litigation could reasonably affect the debtor’s estate through contingent indemnity or contribution claims, depletion or allocation of shared insurance, and consequences for administering and reorganizing the Chapter 11 estate.


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