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In re Dow Corning Corp.

United States Court of Appeals for the Sixth Circuit
86 F.3d 482 (1996)


Dow Corning (debtor) manufactured silicone-gel breast implants and sold silicone gel to other manufacturers. Tens of thousands of implant recipients sued Dow Corning and the other manufacturers for injures allegedly caused by the implants. A federal judicial panel consolidated all of the actions pending in federal court and certified a class for settlement. The parties reached a settlement agreement. Several thousand plaintiffs elected to opt out of the settlement class to pursue their claims individually. Due to the financial burden of the claims, Dow Corning filed for bankruptcy. As a result of the bankruptcy, all implant claims against Dow Corning became subject to the automatic stay. Similar claims against Dow Corning’s non-debtor parent companies were not stayed. Dow Corning filed a motion to remove all claims against it and its parent companies then pending in both federal and state courts to the United States District Court for the Eastern District of Michigan, in order to consolidate the claims as a first step in ensuring a feasible plan of reorganization. The district court held that the claims against Dow Corning were subject to federal bankruptcy jurisdiction under § 1334(b) of the bankruptcy code, but that the court lacked subject-matter jurisdiction over the claims against the non-debtor parent companies. Dow Corning appealed.

Rule of Law


Holding and Reasoning (Martin, J.)

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