ORDER
June 3, 1996
The court having received two petitions for rehearing en bane, 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 rehear
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.
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
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.
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,
On June 25, 1992, prior to Dow Coming’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 оf 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 inelu
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 Coming 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 Coming’s Chapter 11 filing, all breast implant claims against it were automatically stayed pursuant to 11 U.S.C. § 362(a). Claims against Dow Coming’s two shareholders, Dow Chemical and Coming Incorporated, and the other non-debtor 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)
On June 14, 1995, Minnesota Mining, Baxter, and Bristol-Myers Squibb also moved, pursuant to Section 157(b)(5), tо transfer to the Eastern District of Michigan the opt-out cases in which those manufacturers were named as defendants with Dow Coming.
On September 12, 1995, the district court issued two opinions and companion orders regarding the Section 157(b)(5) transfer motions. With respect to opt-out breast implant cases pending against Dow Corning, the district court asserted jurisdiction under Section 1384(b) and permitted transfer pursuant to Section 157(b)(5). The district court, however, 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” Dow Coming’s bankruptcy proceeding pursuant to 28 U.S.C. § 1334(b). In denying the transfer motions, the district court also directed that individual federal courts nationwide dismiss or sever Dow Coming and/or rеmand the combined opt-out actions to state court, and enjoined the nondebtor eodefendants from removing any other cases from state to federal court pursuant to 28 U.S.C. § 1452 if the only basis for such removal was 28 U.S.C. § 1334(b) or 28 U.S.C. § 1367(a). In a September 14, 1995 order, the district court extended its rulings to include opt-in breast implant claims.
Dow Coming, Dow Chemical, Coming Incorporated, Minnesota Mining, Baxter, and Bristol-Myers Squibb subsequently filed appeals seeking review of the district court’s partial denial of their motions to transfer. Those appeals were consolidated on October 10, 1995, and we are now faced with a complex set of questions pertaining to the scope of a district court’s jurisdiction when it sits in bankruptcy, and its power to fix venue for the trial of wrongful death and personal injury tort claims that are “related to” a bankruptcy proceeding. In addressing these issues, we begin, as we do in any case involving a question of statutory construction, with the express language of the statute at issue and an examination of Congressional intent. In addition, we recognize that our decision will significаntly impact the future course of this massive litigation. Realizing that we cannot satisfy all competing interests perfectly, our primary goal is to establish a mechanism for resolving the claims at issue in the most fair and equitable manner possible. In seeking to achieve that goal, we are called upon to balance four different, and frequently competing, interests: those of the individuals who have brought and will bring breast implant claims; Dow Coming’s interests with regard to its attempt to formulate a successful reorganization plan; Dow Chemical and Corning Incorporated’s interests as shareholders of Dow Corning; and the judicial system’s interest in allocating its limited resources effectively and efficiently.
II.
As a threshold matter, we must determine whether the district court’s partial denial of the motions to transfer is immediately appealable. These issues are certainly fluid. Our general jurisdiction to review a decision or order of a district court sitting in bankruptcy is governed by 28 U.S.C. § 1291. A.H. Robins Co. v. Piccinin,
Bankruptcy cases frequently involve protracted proceedings with many parties participating. To avoid the waste of time and resources that might result from reviewing discrete portions of the action only after a plan of reorganization is approved, courts have permitted appellate review of orders that in other contexts might be considered interlocutory.
Id. at 1009 (citations omitted). Therefore, where an order in a bankruptcy case “finally disposefs] of discrete disputes within the larger case,” it may be appealed immediately. In re Saco Local Dev. Corp.,
We also believe appealability of the district court’s order is sustainable under the collateral order doctrine of Cohen v. Beneficial Indus. Loan Corp.,
Because appellate jurisdiction exists, we turn to the questions on appeal.
III.
The first issue to be resolved is whether the district court has subject matter jurisdiction over breast implant claims pending not only against the debtor, Dow Corning, but also over certain claims pending against the nondebtor defendants. The non-debtor defendants argue that such jurisdiction exists pursuant to 28 U.S.C. § 1334(b) or, alternatively, 28 U.S.C. § 1367(a). We review the district court’s jurisdictional ruling de novo. In re Wolverine Radio Co.,
Section 1334 grants jurisdiction to district courts in bankruptcy cases and proceedings as follows:
(a) Except as provided in subsection (b) of this section, the district court shall have original and exclusive jurisdiction of all eases under title 11.
*489 (b) Notwithstanding any Act of Congress that confers exclusive jurisdiction on a court or courts other than the district courts, the district courts shall have original but not exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or related to cases under title 11.
28 U.S.C. § 1334 (emphasis added).
In addressing the extent of a district court’s bankruptcy jurisdiction under Section 1334(b) over civil proceedings “related to” eases under title 11, we start with the premise that the “emphatic terms in which the jurisdictional grant is described in the legislative history, and the extraordinarily broad wording of the grant itself, leave us with no doubt that Congress intended to grant to the district courts broad jurisdiction in bankruptcy cases.” In re Salem,
The definition of a “related” proceeding under Section 1334(b) was first articulated by the Third Circuit in Pacor. As stated in that case, the “usual articulation of the test for determining whether a civil proceeding is related to bankruptcy is whether the outcome of that proceeding could conceivably have any effect on the estate being administered in bankruptcy.” Pacor,
Our Circuit adopted the Pacor test for determining whether a civil proceeding is “related to” a bankruptcy proceeding under Section 1334(b) in Robinson,
In addition, the Supreme Court recently cited Pacor with approval in addressing the broad scope of the jurisdictional grant in Section 1334(b). The Court stated:
Congress did not delineate the scope of “related to” jurisdiction, but its choice of words suggests a grant of some breadth. The jurisdictional grant in [Section] 1334(b) was a distinct departure from the jurisdiction conferred under previous acts, which had been limited to either possession of property by the debtor or consent as a basis for jurisdiction. We agree with the views expressed by the Court of Appeals fоr the Third Circuit in Pacor that “Congress intended to grant comprehen*490 sive jurisdiction to the bankruptcy courts so that they might deal efficiently and expeditiously with all matters connected with the bankruptcy estate,” and that the “related to” language of [Section] 1334(b) must be read to give district courts (and bankruptcy courts under [Section] 157(a)) jurisdiction over more than simple proceedings involving the property of the debtor or the estate.
Celotex, — U.S. at---,
In their briefs and at oral argument, Dow Coming, Dow Chemical, Corning Incorporated, Minnesota Mining, Baxter and Bristol-Myers Squibb proposed several theories for the existence of Section 1334(b) subject matter jurisdiction оver certain breast implant claims pending against the nondebtor defendants, no one of which has been clearly determined to definitively confer “related to” jurisdiction under Section 1334(b). Specifically, the defendants argued that contingent claims for contribution and indemnification, jointly-held insurance policies,
1. Claims for Contribution and Indemnification
Dow Corning, Dow Chemical and Coming Incorporated argue that the district court erred in its determination that “related to” jurisdiction does not exist over certain breast implant сlaims asserted against Dow Chemical and Coming Incorporated because, in addition to the claims asserted by the personal injury claimants, Dow Chemical and Corning Incorporated have asserted cross-claims against each other and Dow Corning in the underlying litigation, which will have an effect on the bankruptcy estate.
Relying on Pacor, the district court rejected this basis for “related to” jurisdiction and held that the possibility of contribution or indemnification should only be regarded as relevant if and when judgments are actually entered against the nondebtors. The district court stated:
In the instant case, as in Pacor, there will be no contingent claim by the Shareholders against the debtorfor indemnification until such time as a judgment is rendered and, then, the non-debtors would still have to proceed with an entirely separate proceeding in order to obtain indemnification from the Debtor under 11 U.S.C. § 502.
Pacor involved John and Louise Higgins’ claim against the Philadelphia Asbestos Co. (Pacor) in state court seeking damages allegedly caused by Mr. Higgins’ work-related exposure to asbestos supplied by the company. In response, Pacor filed a third-party complaint impleading the Johns-Manville Corporation, which Pacor claimed was the оriginal manufacturer of the asbestos. After Johns-Manville filed for Chapter 11, a dispute ensued as to whether the Higgins-Paeor action was “related to” the Manville bankruptcy so that the entire controversy could be removed to bankruptcy court. The Third Circuit held that the primary Higgins-Paeor action would not affect the Manville bankruptcy estate, and therefore was not “related to” the bankruptcy proceedings. The court stated that the Higgins-Paeor action was, “[a]t best, a mere precursor to the potential third party claim for indemnification by Paeor against Manville,” and held that, because all issues with regard to Manville’s possible liability would be resolved in a subsequent third party impleader action, “there would be no automatic creation of liability against Manville on account of a judgment against Pacor.” Pacor,
It has become clear following Pacor that “automatic” liability is not necessarily a prerequisite for a finding of “related to” jurisdiction. The Third Circuit itself has emphasized that:
A key word in [the] test is “conceivable.” Certainty, or even likelihood, is not a requirement. Bankruptcy jurisdiction will exist so long as it is possible that a proceeding may impact on “the debtor’s rights, liabilities, options, or freedom of action” or the “handling and administration of the bankrupt estate.”
In re Marcus Hook Dev. Park Inc.,
Our Circuit has held that Section 1334(b) “does not require a finding of definite liability of [an] estate as a condition precedent to holding an action related to a bankruptcy proceeding.” In re Salem,
The proposed order in this ease provided that the plaintiff classes would release all claims against the debtors arising from the mortgage transactions except for claims concerning the alleged misappropriation of escrow funds. The order also provided that the debtors pay civil рenalties under the Michigan Consumer Protection Act. The corporations’ penalties are to be subordinated to the claims of the general creditors. Resolution of the dispute, moreover, will affect the liability of the debtors to the investors. For example, to the extent the value of the mortgages is reduced by their reformation, the investors may have an action against the debtors such as breach of the assignment agreement. Because of the nature of these mortgage transactions, we hold that this dispute is sufficiently related to the estate of the bankrupt such that the district court had jurisdiction over the subject matter.
Id. at 634. The Court stated that the case was distinguishable from Pacor on the ground that a finding of definite liability of an estate is not a prerequisite to holding an action “related to” a bankruptcy proceeding, and because the parties in the mortgage transactions in the proceeding at issue were “more intertwined” than the parties in Pacor. Id. at 635.
This Court’s decision in In re Salem has been cited for the proposition that “when [a] plaintiff alleges liability resulting from the joint conduct of the debtor and non-debtor defendants, bankruptcy jurisdiction exists over all claims under section 1334.” In re Wood,
The complaint against the bankruptcy debtors could have a conceivable effect on their bankruptcy. The plaintiff seeks to recover stock and monies that the debtors allegedly appropriated from the clinic. They seek to resolve the disputed allocation of interest in the clinic. To the extent that the debtors’ interest in the clinic, their stock holdings, or their withdrawals are now property of the estate, the complaint against them has a potential effect on their estate.
Id. at 93-94. The Court acknowledged the possibility that the complaint, which raised a post-petition claim, could ultimately have no effect on the bankruptcy proceeding. Unable, however, to conclude that the suit would have no conceivable effect on that proceeding, the court found “related to” jurisdiction as to both the debtor and nondebtor defendants, stating:
The plaintiff has filed one complaint against the defendants seeking liability for their joint conduct. Success against any of the defendants will have a potential effect on the estate. For example, if Dr. Wood and his wife are held liable but Barham is not, the bankrupt estate may bear the entire burden of the judgment. If, on the other hand, Barham is found jointly liable, the estate may bear only a portion of the judgment. Moreover, in filing othe complaint, the plaintiff challenged the combined actions of both the debtors and Barham, a non-debtor. Resolution of the dispute will necessarily involve, therefore, considerаtion of Barham’s involvement in those actions. We find support in the Court of Appeals for the Sixth Circuit and lower courts, which have held that when the plaintiff alleges liability resulting from the joint conduct of the debtor and non-debtor defendants, bankruptcy jurisdiction, exists over all claims under section 1334.
Id. at 94.
The degree of identity between a debtor and nondebtor codefendants was an impor
Shortly after entry of the preliminary injunction, A.H. Robins moved for: a determination of trial venue of all Daikon Shield suits; identification of such eases as were “related to” the Chapter 11 case; and transfer of such eases to the Eastern District of Virginia for trial. The district court held that: (1) pursuant to Section 1334(b), all actions based upon personal injury tort or wrongful death claims arising from the use of the Daikon Shield were proceedings related to the Chapter 11 case; (2) pursuant to Sections 157(b)(5) and 1334(b), all such actions, wherever pending, were to be tried in the Eastern District of Virginia; (3) all actions related to thе Chapter 11 case then pending in or subsequently removed to any federal district court during the pendency of the Chapter 11 case were to be transferred to the Eastern District of Virginia; and (4) the court was not prevented from later abstaining under Section 1334(c)(1) or remanding under Section 1452(b). This order and the preliminary injunction were both appealed to the Fourth Circuit.
In discussing the propriety of the stay issued against A.H. Robins’ nondebtor codefendants, the Fourth Circuit stated that, although Section 362(a)(1) is generally available only to a debtor, proceedings against nonbankrupt codefendants may be stayed by a bankruptcy court where there are “unusual circumstances.” A.H. Robins Co. I,
Based on the principles outlined above, we believe the district court has “related to” subject matter jurisdiction over the breast implant claims pending against the nondebt- or defendants in this ease. Thousands of suits asserted against Dow Corning include claims against the nondebtors, and the nature of the claims asserted establishes that Dow Corning and the various nondebtor defendants are closely related with regard to the pending breast implant litigation.
We find that it is not necessary for the appellees first to prevail on their claims against the nondebtor defеndants, and for those companies to establish joint and several liability on Dow Coming’s part, before the civil actions pending against the nondebtors may be viewed as conceivably impacting Dow Coming’s bankruptcy proceedings. The claims currently pending against the non-debtors give rise to contingent claims against Dow Coming which unquestionably could ripen into fixed claims. The potential for Dow Coming’s being held liable to the non-debtors in claims for contribution and indemnification, or vice versa, suffices to establish a conceivable impact on the estate in bankruptcy. Claims for indemnification and contribution, whether asserted against or by Dow Coming, obviously would affect the size of the estate and the length of time the bankruptcy proceedings will be pending, as well as Dow Coming’s ability to resolve its liabilities and proceed with reorganization. In addition, we believe there is a qualitative difference between the single suit involved in Pacor and the overwhelming number of cases asserted against Dow Coming and the non-debtor defendants in this case. A single possible claim for indemnification or contribution simply does not represent the same kind of threat to a debtor’s reorganization plan as that posed by the thousands of potential indemnification claims at issue here.
Cognizant of the fact that “related to” jurisdiction cannot be limitless and concerned about granting benefits of the automatic stay in bankruptcy to solvent codefendants, we nevertheless believe the possibility of contribution or indemnification liability in this case is far from attenuated. We conclude that Section 1334(b) jurisdiction exists over the ' actions pending against Dow Chemical, Coming Incorporated, Minnesota Mining, Baxter, and Bristol-Myers Squibb that are the subject of the companies’ Section 157(b)(5) motions.
2. Joint Insurance
Dow Corning, Dow Chemical and Corning Incorporated also argue that “related to” jurisdiction exists as to claims pending against the shareholders because the three companies share joint insurance. We believe this argument provides additional support for the existence of “related to” jurisdiction under the unique facts of this case, but address it only briefly because we have alrеady concluded that Section 1334(b) jurisdiction exists over breast implant claims pending against Dow Coming and one or both of its parents.
Dow Corning, Dow Chemical and Coming Incorporated are co-insured under various insurance policies, which together provide over $1 billion in coverage. Dow Coming’s interest in the policies is one of the largest assets of its bankruptcy estate. In addition, Dow Coming recently entered into ten new insurance settlements under which the estate will receive, if approved by the bankruptcy court, approximately $350 to $450 million in cash. Most of these settlements involve policies under which Dow Chemical or Corning Incorporated is a co-insured.
Dow Corning, Dow Chemical, and Corning Incorporated claim that the district court’s order, by allowing thousands of claims to proceed separately against Dow Chemical and Corning Incorporated, will diminish the value of this major bankruptcy asset to the extent that settlements, judgments and defense costs incurred by the shareholders will exhaust policy limits otherwise available to Dow Corning, its creditors, and individuals аsserting claims in the bankruptcy proceedings. In addition, all three co-insureds argue that the policies will be further diminished if and when payments must be made to Minnesota Mining, Baxter, or Bristol-Myers
The district court rejected this argument for the existence of “related to” jurisdiction, holding that, while a bankruptcy court has broad discretion over a debtor’s interest in a liability insurance policy shared with a non-debtor, no judgment has been entered yet against Dow Chemical or Corning Incorporated and neither company has a claim pending against the insuranсe policies at this time. We believe the district court is in error because, as we stated earlier, an immediate impact on a debtor’s estate is not a prerequisite for Section 1334(b) jurisdiction. Under the facts of this case, we believe the possible depletion of insurance policies depends on contingencies sufficiently immediate to support a finding of “related to” jurisdiction. See, e.g., A.H. Robins Co. I,
Dow Coming’s interest in the insurance policies at issue is property of its estate under the expansive definition set forth in 11 U.S.C. § 541(a)(1). The threat posed to those insurance policies if claims pending against Dow Chemical and Coming Incorporated are permitted to go forward in a separate manner supports a finding of “related to” jurisdiction under Section 1334(b). The prospect of Dow Chemical and Corning Incorporated being able to assert mature, liquidated claims against the insurance proceeds if litigation pending against them is permitted to go forward demonstrates a conceivable impact on the bankruptcy proceedings. If it is determined that Dow Chemical or Corning Incorporated has a priority to the insurance proceeds, even if the bankruptcy court has the power to prevent payments of the proceeds while Dow Corning is in bankruptcy, the risk remains that the insurance coverage may be eviscerated when the proceeds are evеntually distributed. In addition, certain of the policies cover defense expenses, and those costs alone may significantly reduce the pool of coverage available to Dow Corning if the claims pending against Dow Chemical and Coming Incorporated are allowed to proceed separately. In addition, the bankruptcy court has yet to determine whether it has the power to prevent Dow Coming’s eoinsureds from receiving proceeds of the jointly-held policies while Dow Coming is in bankruptcy. Resolution of the dispute over the right to proceeds alone will have a conceivable effect on Dow Coming’s bankruptcy proceedings.
IV.
We next address the power of the district court, sitting in bankruptcy, to fix the venue for the trial of personal injury tort and wrongful death claims asserted in non-bankruptcy forums pursuant to 28 U.S.C. § 157(b)(5). Section 157(b)(5) provides:
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*496 arose, as determined by the district court in which the bankruptcy case is pending.
The 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 ease.’ ” A.H. Robins Co. I,
It has been established that a “bankrupt debtor who is a defendant in a personal injury action may move under section 157(b)(5) to transfer the case to one of two venues: (1) the district where the bankruptcy is proceeding; or (2) the district where the claim arose.” In re Pan Am Corp. I,
The Fourth Circuit has construed Section 157(b)(5) as permitting the transfer of such cases, and we follow that Circuit’s аpproach. In A.H. Robins Co. I, by the time A.H. Robins filed its Chapter 11 petition, 5,000 suits were pending against the company. More than half of those cases named A.H. Robins as the sole defendant, while a codefendant or codefendants were named in the others. After the district court issued a preliminary injunction against suits by A.H. Robins’ eodefendants, A.H. Robins moved for a determination of trial venue of all Daikon Shield suits, an identification of cases “related to” the bankruptcy case, and the transfer of those eases to the district court where the bankruptcy proceedings were being held for trial. The district judge held that, pursuant to Section 1334(b), all actions based upon personal injury tort or wrongful death claims arising from the use of the Daikon Shield were proceedings “related to” A.H. Robins’ Chapter 11 case and that, pursuant to Sections 1334(b) and 157(b)(5), all such actions, wherever pending, were to be tried in the Eastern District of Virginia. In addition, the district court held that all actions “related to” the Chapter 11 case then pending in any federal district court or subsequently removed to any federal district court during the pеndency of A.H. Robins’ bankruptcy case were to be transferred to the Eastern District of Virginia.
In reviewing the validity of the district court’s order fixing the venue for the trial of all Daikon Shield cases and transferring such cases to the Eastern District of Virginia, the Fourth Circuit stated: “Unquestionably the district court in this case had the power under the statute to fix the trial venue in its district for all the Daikon Shield cases.” Id. at 1010 (stating also that the power of the district court to fix venue for all the pending Daikon Shield tort cases is “stated in unmistakable terms in section 157(b)(5)”). The Fourth Circuit stated its intent in consolidating the Daikon Shield litigation as follows:
Since the Daikon Shield litigation began, forty claims have actually been tried but over $517,000,000 have been expended in defending or settling Daikon Shield suits or claims. It is impossible to anticipate the stupendous costs that would be involved if all the claims here had to be tried. If the claimants as a whole are to realize reasonable compensation for their claims, it is obviously in the interest of the class of claimants as a whole to obviate the tremendous expense of trying these cases separately. If the bankruptcy court could arrive at a fair estimation of the value of all the claims and submit a fair plan of reorganization based on such estimation, with some mechanism for dispute resolution and acceptable to all interested parties, great benefit to all the claimants could be achieved and the excessive expense of innumerable trials, stretching over an interminable time, could be avoided. In addition, the real purpose of the proceedings (i.e., a reorganization of the debtor and its continuance as a going business) could be attained.
Id. at 1013 (footnote omitted). The court stated that these objectives could not be achieved until “all Daikon Shield claims and suits [were] centralized before a single forum where all interests [could] be heard and in
That undoubtedly was the purpose of the motion to fix venue and to transfer the pending suits to the district court sitting in bankruptcy before which the proceedings were pending. This unquestionably was the idea which prompted the district court to opt tentatively in his order fixing venue in the district court sitting in bankruptcy for all these claims. We approve of the idea and find it conducive of the interests of all concerned.
Id. at 1014.
We agree with the Fourth Circuit that Section 157(b)(5) should be read to allow a district court to fix venue for cases pending against nondebtor defendants which are “related to” a debtor’s bankruptcy proceedings pursuant to Section 1334(b).
V.
Finally, a Section 157(b)(5) motion “requires an abstention analysis.” In re Pan Am Corp.,
Section 1334 provides for two types of abstention: discretionary abstention under 28 U.S.C. § 1334(c)(1) and mandatory abstention under 28 U.S.C. § 1334(c)(2). Section 1334(c)(1) provides:
Nothing in this section prevents a district court in the interest of justice, or in the interest of comity with State courts or respect for State law, from abstaining from hearing a particular proceeding arising under title 11 or arising in or related to a case under title 11.
Section 1334(c)(2) states in relevant part:
Upon timely motion of a party in a proceeding based upon a State law claim or State law cause of action, related to a ease under title 11 but not arising under title 11 or arising in a case under title 11, with respect to which an action could not have been commenced in a court of the United States absent jurisdiction under this section, the district court shall abstain from hearing such proceeding if an action is commenced, and can be timely adjudicated, in a State forum of appropriate jurisdiction.
For mandatory abstention to apply, a proceeding must: (1) be based on a state law claim or cause of action; (2) lack a federal jurisdictional basis absent the bankruptcy; (3) be commenced in a state fоrum of appropriate jurisdiction; (4) be capable of timely adjudication; and (5) be a non-core proceeding. Non-core proceedings under Section 157(b)(2)(B) (i.e. liquidation of personal injury tort or wrongful death ease) are not subject to Section 1334(c)(2)’s mandatory abstention provisions pursuant to 28 U.S.C. § 157(b)(4).
The district court in this case determined that Section 157(b)(4) rendered exempt from the mandatory abstention requirement all personal injury tort claims pending solely against Dow Corning, and decided not to abstain discretionarily with regard to those claims at this time. Because the district court found that it did not have subject matter jurisdiction over the claims pending against the nondebtor defendants, it did not address the abstention issue in detail and merely incorporated by reference its analysis of the abstention issue pertaining to claims pending solely against Dow Coming. It also remains to be fully determined whether the
VI.
We REVERSE the district court’s determination that it lacked subject matter jurisdiction over the tort claims pending against the nondebtor defendants and that it did not have the power to transfer those claims pursuant to Section 157(b)(5). In addition, we REMAND this case to the district court for further proceedings on the issue of Section 1334(c) abstention.
Notes
. In this amended opinion, we adhere to our April 9, 1996 decision in this case, but seek to clarify the scope of our ruling and the impact we intend it to have. The opinion is therefore amended and reissued as follows.
. Baxter never designed, manufactured, or marketed breast implants, but is a defendant in personal injury actions as a result of certain corporate acquisitions and mergers. The Baxter implants were actually made by The Heyer-Schulte Company.
. The Bristol-Myers Squibb implants were made by a subsidiary, The Medical Engineering Corporation.
. It has since become clear that the original Global Settlement will not hold together because the sums provided are inadequate to fund the claims filed by over 100,000 plaintiffs. Unless a modified settlement is reached, thousands of opt-in plaintiffs and thousands of claimants who have yet to file actions are likely to file or reactivate individual suits against the breast implant defendants in both state and federal courts.
. Tide 28 U.S.C. § 157(b)(5) states: "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.”
. Dow Coming’s motion sought a transfer of lawsuits against it and its shareholders which were not part of the global settlement. Dow Coming, Dow Chemical and Coming have stated that "thousands of the suits against Dow Coming have included claims against Dow Chemical and Coming, even though neither of those companies designed, manufactured, tested, or sold breast implants.” Brief for Dow Coming Corporation, The Dow Chemical Company, and Coming Incorporated at 9. The companies have explained that "[pjlaintiffs have generally alleged that the Shareholders are liable for Dow Coming's acts because they purportedly (1) negligently undertook Dow Coming's duties in connection with Dow Coming’s products, (2) aided and abetted Dow Coming's manufacture and sale of unsafe products, or (3) conspired with Dow Coming in the sale by Dow Coming of unsafe or inadequately tested products.” Id. at 9-10. Dow Coming’s transfer motion covered about one-third of the breast implant claims brought by opt-out plaintiffs against Dow Coming.
. The Minnesota Mining, Baxter, and Bristol-Myers Squibb motions were limited to personal injury actions in which Dow Coming was a named codefendant with one or more of those parties and the plaintiffs had opted out of the Global Settlement. According to Minnesota Mining, "when [Dow Coming] filed for chapter 11, [it] was a codefendant with [Minnesota Mining] in approximately 75% of implant cases against [Minnesota Mining] ... [i]n virtually every case, plaintiffs asserted claims of joint and several liability against [Minnesota Mining] and [Dow Coming] for the full amount of their asserted damages. ' Additionally, approximately 60% of the cases against [Minnesota Mining] involved plaintiffs who had received multiple sets of breast implants, in separate operations, including implants made by [Minnesota Mining] and at least one other manufacturer, which in most cases included [Dow Coming].” Brief for Minnesota Mining and Manufacturing Company at 6. The Baxter motion "covered personal injury
. Dow Chemical and Coming Incorporated are co-insured with Dow Coming under various liability policies.
. In our original opinion, we addressed the two additional arguments proffered by the movants in support of their assertion that "related to’’ jurisdiction exists over claims pending against Dow Coming and the nondebtor defendants. Upon reconsideration, we believe our finding that "related to” jurisdiction exists is best supported by the contribution and indemnification and joint insurance theories.
. According to Dow Coming, Dow Chemical, and Coming Incorporated, the shareholders have asserted "thousands of cross-claims for indemnity and contribution against Dow Coming in breast implant suits.” (Brief for Dow Coming Corporation, The Dow Chemical Company, and Coming Incorporated at 21).
. The opt-out claims asserted against Dow Coming and the various nondebtor defendants generally can be divided into four categories: (i) "Multiple Implant Actions,” which are actions where plaintiffs received implants manufactured by both Dow Coming and one or more of the nondebtors; (ii) "Supplier Actions,” which involve claims against the nondebtors as manufacturers and claims against Dow Coming as the supplier of silicone materials to the nondebtors; (iii) "Conspiracy Actions,” which allege that Dow Coming and the nondebtors conspired to defraud the plaintiffs by fraudulently withholding material information regarding the hazards of breast implants; and (iv) "Form Complaint Actions,” which simply name Dow Coming and the nondebtors as defendants without making any specific allegations of individual wrongdoing.
. We note that our holding here is limited to the district court's ability to consider motions under 28 U.S.C. § 157(b)(5) with respect to the trial venue of the breast implant claims at issue.
. Section 157(b)(4) provides that "[n]on-core proceedings under section 157(b)(2)(B) of title 28, United States Code, shall not be subject to the mandatory abstention provisions of section 1334(c)(2)."
