936 F.3d 260
5th Cir.2019Background
- Double Eagle Energy filed Chapter 11 and then sued MarkWest and Ohio Gathering on a contract claim in Louisiana federal court.
- At filing, the suit was a “related to” bankruptcy matter, giving the district court subject-matter jurisdiction under 28 U.S.C. § 1334(b).
- After filing, Double Eagle assigned its claim against Defendants to a creditor, prompting Defendants to move to dismiss for lack of jurisdiction.
- The magistrate and district court concluded the assignment destroyed § 1334(b) jurisdiction and, consequently, personal jurisdiction, and dismissed the case.
- The Fifth Circuit considered whether the time-of-filing rule preserves § 1334(b) jurisdiction despite the post-filing assignment, and whether bankruptcy service rules affect personal jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 1334(b) jurisdiction is governed by the time-of-filing rule | Time-of-filing controls; jurisdiction existed at filing and remains | Assignment after filing destroyed any bankruptcy connection and thus jurisdiction | Time-of-filing rule applies to § 1334(b); jurisdiction that existed at filing remains |
| Whether personal jurisdiction exists after assignment | Bankruptcy jurisdiction allows service under Bankr. R. 7004; nationwide service means Fifth Amendment contacts with U.S. suffice | Lack of sufficient contacts with Louisiana means no personal jurisdiction | With § 1334(b) jurisdiction and Bankr. R. 7004, nationwide service supports personal jurisdiction based on contacts with the United States |
| Whether district court should have dismissed as a discretionary matter because bankruptcy connection ended | Plaintiff argued jurisdiction remains and dismissal is discretionary; remand appropriate for discretion | Defendants urged dismissal is proper where the bankruptcy connection is gone | Court declined to resolve discretionary dismissal; remanded for district court to exercise its discretion in the first instance |
| Effect of forum-selection clause on venue/ dismissal | Plaintiff contended clause might warrant transfer but not dismissal | Defendants argued clause supported dismissal for improper venue | Forum-selection clause could support transfer to Ohio federal court but not dismissal; remand to consider transfer/enforceability |
Key Cases Cited
- Grupo Dataflux v. Atlas Glob. Grp., L.P., 541 U.S. 567 (time-of-filing rule governs jurisdictional status)
- Wood v. Wood, 825 F.2d 90 (5th Cir. 1987) ("related to" standard: claim need only conceivably affect the estate)
- In re Celotex Corp., 124 F.3d 619 (4th Cir. 1997) (time-of-filing rule applies to bankruptcy-related jurisdiction; Bankruptcy Rule 7004 service discussion)
- In re Querner, 7 F.3d 1199 (5th Cir. 1993) (bankruptcy case closing does not automatically divest related-to jurisdiction; discretionary dismissal guidance)
- Omni Capital Int’l, Ltd. v. Rudolf Wolff & Co., Ltd., 484 U.S. 97 (personal-jurisdiction framework; minimum contacts requirement)
- Busch v. Buchman, Buchman & O’Brien, Law Firm, 11 F.3d 1255 (5th Cir. 1994) (nationwide service under Bankruptcy Rule 7004 makes the forum the United States for due-process purposes)
- Atl. Marine Constr. Co. v. U.S. Dist. Court for the W. Dist. of Tex., 571 U.S. 49 (forum-selection clause enforces transfer but does not justify dismissal when federal venue exists)