VSP Labs, Incorporated v. Hillair Capital Investments L.P., et al.

In Celotex Corp. v. Edwards, 514 U.S. 300, 308 (1995), this Court cautioned that a bankruptcy court’s “related to” jurisdiction “cannot be limitless.” But the Court has never established a test to determine “related to” jurisdiction. The lower courts are now deeply divided on this issue. They cannot agree on whether indirect or speculative possibilities confer bankruptcy jurisdiction under 28 U.S.C. § 1334(b) or on whether it must be construed more narrowly. The lower courts also cannot agree on whether and when to apply the “anticipated outcome” test, the “conceivable effect” test, the “significant connection” test, the “close nexus” test, or the “common sense” test to decide jurisdiction. The lower courts even disagree internally about which conflicting test to apply. Confusion and misapplication are rampant. This Court has not yet determined the correct test, and now is the time to resolve the longstanding divide among the lower courts. Now is also the time to reaffirm bankruptcy jurisdiction “cannot be limitless.” The decision below directly defied this principle. The Question Presented is: What test determines whether a bankruptcy court has “related to” jurisdiction under 28 U.S.C. § 1334(b)? (i)