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In re Imerys Talc America, Inc.

United States District Court, D. Delaware

May 9, 2019

IN RE IMERYS TALC AMERICA, INC., et al., Debtors.

          MEMORANDUM OPINION

          NOREIKA, U.S. DISTRICT JUDGE.

         Presently before the Court is the Emergency Motion for Provisional Transfer Under 28 U.S.C. § 157(b)(5) (D.I. 12 & 13) (“Emergency Provisional Transfer Motion”) filed by non-debtors Johnson & Johnson and Johnson & Johnson Consumer Inc. (collectively, “J&J”) on April 30, 2019. The motion seeks entry of an order directing provisional transfer of approximately 2, 400 federal and state personal injury and wrongful death actions, pending this Court's decision on J&J's Motion to Fix Venue for Claims (D.I. 1, 2, 3 & 4) (“Venue Motion”), which was filed on April 18, 2019. J&J has also filed a request that the Court enter an order granting the Emergency Provisional Transfer Motion immediately and on an ex parte basis (D.I. 15). (“Motion for Ex Parte Relief). The Court has reviewed J&J's motion papers with respect to the Emergency Provisional Transfer Motion and the Motion for Ex Parte Relief and considered the oppositions filed with respect to those motions by the Official Committee of Tort Claimants (“Committee”) (D.I. 17 & 31) and various law firms on behalf of affected plaintiffs (D.I. 19, 21, 32, & 33). The Court has further considered J&J's replies and affidavits in further support of relief. (D.I. 22, 23, 28, 29, & 30). For the reasons set forth below, the Court will DENY both the Emergency Provisional Transfer Motion and the Motion for Ex Parte Relief.

         I. BACKGROUND

         J&J's motions relate to the chapter 11 cases of Imerys Talc America, Inc. and certain affiliates (together, “Debtors”).[1] On February 13, 2019, the Debtors filed their Chapter 11 petitions. J&J is a defendant in numerous personal injury and wrongful death actions pending in state and federal courts all over the country. Each plaintiff alleges that exposure to talc - through products like Johnson's Baby Powder - caused cancer, primarily mesothelioma or ovarian cancer. J&J alleges that Debtors supplied cosmetic talc to J&J for use in some J&J products.

         A. Venue Motion

         On April 18, 2019, J&J filed the Venue Motion seeking to fix venue in this Court with respect to the personal injury and wrongful death claims against J&J that were identified in Exhibit 1 to the motion and to “centralize the adjudication of claims impacting the Debtors' estates” in this Court and “ensure orderly and efficient resolution of these claims.” (See D.I. 1). The authority for the relief requested in the Venue Motion is 28 U.S.C. §§ 157(b)(5) and 1334(b). (See Id. at 2). Section 1334(b) provides, in relevant part, that “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(b). 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 arose, as determined by the district court in which the bankruptcy case is pending.” 28 U.S.C. § 157(b)(5). Certain courts have held that § 157(b)(5) is not limited to cases already pending in the bankruptcy court and “should be read to allow a district court to fix venue for cases pending against nondebtor defendants which are ‘related to' bankruptcy proceedings pursuant to Section 1334(b).” See e.g., In re Dow Corning Corp., 86 F.3d 482, 497 (6th Cir. 1996); A.H. Robins Co. v. Piccinin, 788 F.2d 994, 1010 (4th Cir.1986), cert. denied, 479 U.S. 876 (1986). This “related to” jurisdiction may extend to “suits between third parties that conceivably may have an effect on the bankruptcy estate.” In re W.R. Grace & Co., 591 F.3d 164, 171 (3d Cir. 2009); In re Combustion Eng'g, Inc., 391 F.3d 390, 226 (3d Cir. 2004). “Broadly worded as that is, however, related-to jurisdiction is ‘“not without limitation.'” Id. at 228. See e.g., Pacor Inc. v. Higgins, 743 F.2d 984, 994-95 (3d Cir. 1984) (concluding “related to” jurisdiction did not extend to civil proceeding between non-debtors Higgins and Pacor because, “[a]t best, [the lawsuit] is a mere precursor to the potential third party claim for indemnification by [defendant] against [the debtor]”).

         J&J argues that, because supply agreements between the Debtors and J&J contain cross-contractual indemnifications triggered upon the filing of the claims without regard to findings on underlying liability, the claims affect the Debtors' estates. Similarly, it argues that the Debtors have claimed rights to J&J's insurance for expenses incurred in defending against the talc-related lawsuits, and that the claimed shared insurance could increase or decrease the pool of assets available for creditors. On this basis, the Venue Motion argues that all individual state-law personal injury or wrongful death claims against J&J are “related to” the Debtors' bankruptcy and, on that basis, this Court should exercise jurisdiction over and order transfer of all 2, 400 cases from district courts throughout the United States to this Court. It is the position of various plaintiffs, as well as the Committee, that this Court lacks jurisdiction over these individual litigants and their claims and, in any event, must abstain from exercising subject matter jurisdiction pursuant to § 1334(c). (D.I. 17 at 2, n.1). Briefing on the underlying Venue Motion is underway pursuant to an agreed-upon schedule (D.I. 11, 12) and will be completed by May 23, 2019.

         B. Removal

         Contemporaneously with the Venue Motion, J&J began removing cases pending in state courts, including apparently some that were on the eve of trial (D.I. 19 at 1), on the basis of 28 U.S.C. § 1452, which governs removal of claims related to bankruptcy cases. Section 1452(a) permits removal of any claim or cause of action to the district court for the district where such civil action is pending, if such district court has jurisdiction over such claim or cause of action under § 1334. See 28 U.S.C. § 1452(a). J&J asserts that federal subject matter jurisdiction exists over the removed actions under 28 U.S.C. § 1334(b) because each is “related to” the Debtors' bankruptcy. (D.I. 2 at 6). J&J's removal triggered the 30-day period dictated by 28 U.S.C. § 1447(c) for each respective plaintiff to seek remand of his or her case to state court, and plaintiffs have accordingly begun filing motions for remand. Pursuant to § 1452(b), the district court may remand back to state court “on any equitable ground.” 28 U.S.C. § 1452(b). Remand has been ordered in some cases and stayed in others pending the Court's decision on the Emergency Provisional Transfer Motion. (See D.I. 30).

         C. Emergency Provisional Transfer Motion & Motion for Ex Parte Relief

         Hours after this Court's entry of the stipulated briefing schedule for the Venue Motion, on April 30, 2019, J&J filed the Emergency Provisional Transfer Motion. Based on plaintiffs' timely filing of remand motions, which J&J can hardly claim to be a surprise, J&J claims that the litigation it has created warrants the granting of a provisional transfer to this Court. On April 30, 2019, J&J also filed its motion arguing that immediate, ex parte relief is justified here in order to protect this Court's jurisdiction over the state court claims and prevent conflicting decisions regarding transfer or remand in other courts. (See D.I. 15 at 3).

         III. DISCUSSION

         A. Immediate, Ex Parte Relief

         J&J argues that the interests of the Debtors' creditors and efficient administration of the Debtors' estates will be advanced through immediate, ex parte provisional relief and that these interests outweigh state court considerations. (D.I. 30). J&J asserts that immediate provisional transfer will preserve judicial resources, and that if a provisional transfer is not immediately ordered, other federal district courts will waste time and resources determining remand ...


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