Opinion ID: 70422
Heading Depth: 1
Heading Rank: 2

Heading: jurisdiction

Text: Before discussing the merits, this court must first address the issue of subject matter jurisdiction, which is reviewed de novo. Gasch v. Hartford Accident & Indem. Co., 491 F.3d 278, 281 (5th Cir. 2007). Bankruptcy jurisdiction, like all federal jurisdiction, must be based in statute. In re Bass, 171 F.3d 1016, 1022 (5th Cir.1999). In this case, the MLPA's indemnity provisions are sufficient to create a dispute that is related to New Century's bankruptcy. 28 U.S.C. § 1334(b). Federal courts have related to subject matter jurisdiction over litigation arising from a bankruptcy case if the proceeding could conceivably affect the estate being administered in bankruptcy. In re TXNB Internal Case, 483 F.3d 292, 298 (5th Cir.) (citation omitted), cert. denied, 552 U.S. 1022, 128 S.Ct. 613, 169 L.Ed.2d 393 (2007). Related to jurisdiction includes any litigation where the outcome could alter, positively or negatively, the debtor's rights, liabilities, options, or freedom of action or could influence the administration of the bankrupt estate. Id. Barclays maintains that because the MLPA renders New Century liable for all damages that could be imposed on Barclays by this litigation, the district court had jurisdiction to rule on the case. On appeal, Appellants have supplemented their argument and contend that related to jurisdiction only arises if claims for contribution or indemnity have accrued. Appellants mean that a right to indemnity or contribution must be established such that no further litigation is required to substantiate such rights against the debtor. Their reliance for this proposition on the Third Circuit's decision In re Federal-Mogul Global, Inc., 300 F.3d 368, 382 (3d Cir.2002), is misplaced. Federal-Mogul concerned tort contribution principles where the debtor's liability for asbestos-caused injuries would ultimately have to be litigated before contribution rights would accrue in favor of other producers of asbestos products. We take no position on the Federal-Mogul situation. Compare Arnold v. Garlock, Inc., 288 F.3d 234, 238-39 (5th Cir.2002) (holding that absent a judgment against a defendant at time of removal, common law contribution could not give rise to related to jurisdiction). In this case, Barclays relies heavily, if not exclusively, on contractual indemnity provisions with New Century containing representations about the quality of the mortgage loans purchased by Barclays, which are nearly identical to the representations Barclays made to Lone Star. This circuit has already ruled, moreover, that contractual indemnification rights may give rise to related to jurisdiction. See In re Stonebridge Techs., Inc., 430 F.3d 260, 266 (5th Cir.2005) (holding that a debtor's letter of credit obligation triggered related to jurisdiction in a dispute between two non-bankrupt third parties).