In Re: Laura Charlene Goebel

majority opinion

25-103

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

August Term 2025

(Argued: November 19, 2025 Decided: July 28, 2026)

No. 25-103

IN RE: LAURA CHARLENE GOEBEL,

Debtor.

LAURA CHARLENE GOEBEL, DEBTOR,

Plaintiff-Appellee,

-v.-UNITED STATES OF AMERICA DEPARTMENT OF THE TREASURY INTERNAL REVENUE

SERVICE,

Defendant-Appellant.

Before: KEARSE, RAGGI, AND LIVINGSTON, Circuit Judges.

Defendant-Appellant the Internal Revenue Service (“the IRS”) appeals from an order of the United States Bankruptcy Court for the Eastern District of New York (Lord, J.) denying the IRS’s motion to dismiss Plaintiff-Appellee Laura Charlene Goebel’s (“Goebel”) complaint. Having filed for bankruptcy, Goebel

sought a declaration from the bankruptcy court that 11 U.S.C. § 523(a)(1) did not afford her debts an exception from discharge. After pleading nondischargeability in its own complaint to reduce Goebel’s debts to judgment with the United States District Court for the Eastern District of New York (Irizarry, J.), the IRS sought to dismiss Goebel’s complaint for lack of subject matter jurisdiction. The bankruptcy court declined to do so, concluding that Goebel could cure any jurisdictional deficiency by filing a supplemental complaint with additional facts regarding the IRS’s efforts to collect on debts afforded an exception from discharge. On appeal, the IRS argues (1) that Goebel’s complaint did not present a justiciable dispute, (2) that a supplemental complaint cannot cure a jurisdictional defect in a complaint, and (3) that 28 U.S.C. § 2201(a), the federal tax exception to the Declaratory Judgment Act, precludes the relief Goebel seeks. We agree with the IRS that the bankruptcy court should have dismissed Goebel’s complaint. The complaint lacks plausible allegations of an injury in fact because, under these circumstances, a debtor enjoys the self-executing “presumption” that a general discharge covers the tax debts, a presumption overcome only by the IRS’s affirmative showing that “the debtor made a fraudulent return or willfully attempted in any manner to evade or defeat such tax.” 11 U.S.C. § 523(a)(1)(C). And even assuming arguendo that a supplemental complaint can remedy

jurisdictional defects of constitutional dimension, the bankruptcy court still erred in denying the IRS’s motion because the IRS’s complaint was the first-filed complaint over which a court had jurisdiction. Accordingly, we VACATE the bankruptcy court’s order and REMAND with instructions to dismiss Goebel’s complaint and supplemental complaint.

FOR PLAINTIFF-APPELLEE: THOMAS MOERS MAYER, Herbert Smith

Freehills Kramer (US) LLP, New York, NY.

Rachel Blumenfeld, Law Office of Rachel

Blumenfeld, Brooklyn, NY.

(David W. Foster, Kirkland & Ellis LLP,

Washington, DC, Chad J. Husnick, Anthony

V. Sexton, Kirkland & Ellis LLP, Chicago, IL,

Leah Davis Patrick, Kirkland & Ellis LLP,

Houston, TX, for National Consumer

Bankruptcy Rights Center and The National

Association of Consumer Bankruptcy

Attorneys as amici curiae.)

FOR DEFENDANT-APPELLANT: PETER SKLAREW (John J. Durham, Joseph

Nocella, Jr., United States Attorneys,

Matthew S. Johnshoy, Ellen Page DelSole,

Bruce R. Ellisen, Attorneys, on the brief),

United States Department of Justice, Tax

Division, Washington, DC.

DEBRA ANN LIVINGSTON, Circuit Judge:

In 2022, Plaintiff-Appellee Laura Charlene Goebel (“Goebel”) filed a

Chapter 7 bankruptcy petition with the United States Bankruptcy Court for the

Eastern District of New York. Shortly thereafter, she filed an adversary

complaint against Defendant-Appellant the Internal Revenue Service (“the IRS”)

and requested the bankruptcy court to determine that a provision in the

Bankruptcy Code, 11 U.S.C. § 523(a)(1), did not afford her income tax debts an

exception from discharge. Goebel received a general discharge in December of

2022, but due to delays in service of process, her complaint remained pending

before the bankruptcy court until April of 2023.

Meanwhile, on March 14, 2023, the IRS filed a complaint with the United

States District Court for the Eastern District of New York. The IRS sought to

reduce Goebel’s tax debts to judgment and asserted that the debts were excluded

from the scope of the general discharge as debts “with respect to which the debtor

made a fraudulent return or willfully attempted in any manner to evade or defeat

such tax.” 11 U.S.C. § 523(a)(1)(C). The IRS also moved before the bankruptcy

court to dismiss Goebel’s pending complaint there for lack of subject matter

jurisdiction, arguing both that it did not present a justiciable dispute and that it

requested relief barred by the federal tax exception to the Declaratory Judgment

Act, 28 U.S.C. § 2201(a).

The bankruptcy court declined to dismiss Goebel’s complaint because it

concluded that, following the IRS’s assertion of nondischargeability in its own

complaint, Goebel could remedy any jurisdictional defects in her initial complaint

by filing a supplemental complaint. The IRS argues on appeal that the

bankruptcy court erred in that determination. We agree. Goebel’s complaint

did not contain any facts suggesting that the IRS ever manifested a concrete

intention to assert her debts were nondischargeable. Because Goebel relied

instead on “fears of hypothetical future harm,” Clapper v. Amnesty Int’l USA, 568

U.S. 398, 416 (2013), her complaint failed plausibly to allege an injury in fact and,

consequently, to establish standing. And even assuming arguendo that a

supplemental complaint can remedy jurisdictional defects of constitutional

dimension, dismissal was required because the IRS’s complaint was the first-filed

jurisdictionally proper complaint. 1

Accordingly, we VACATE the bankruptcy court’s order and REMAND for

further proceedings with instructions to dismiss Goebel’s complaint and

supplemental complaint.

BACKGROUND

Facing $623,331.31 in debt, Goebel filed a Chapter 7 bankruptcy petition on

September 2, 2022 with the United States Bankruptcy Court for the Eastern District

of New York (Lord, J.). In October, Goebel filed a complaint against the IRS,

“seeking a determination of the Bankruptcy Court declaring the Debtor’s income

tax obligations for the calendar years 2008 through 2018 and all penalties and

interest associated therewith, as dischargeable obligations pursuant to § 523(a)(1)

of the Bankruptcy Code.” App’x 19 Goebel Compl. ¶ 1. The income tax debts

referenced in the complaint amounted to $512,545.17 of Goebel’s total debt. Two

Because we conclude the bankruptcy court should have dismissed Goebel’s complaint for lack of subject matter jurisdiction, we need not reach the IRS’s argument regarding the federal tax exception to the Declaratory Judgment Act.

months after Goebel filed her complaint, the bankruptcy court entered a general

discharge order. 2

On March 14, 2023, with Goebel’s adversary complaint still pending, the IRS

filed its own complaint against Goebel in the United States District Court for the

Eastern District of New York (Irizarry, J.), seeking to “reduce to judgment unpaid

federal tax liabilities owed by Laura C. Goebel for the 2010 through 2018 income

tax periods (anticipating Laura C. Goebel’s defense based on discharge in

bankruptcy and asserting the exception to discharge under 11 U.S.C. §

523(a)(1)(C)).” Suppl. App’x 127. The complaint asserts that “Laura C. Goebel

willfully attempted to evade or defeat the liabilities in several ways[.]” Suppl.

App’x 129–30 IRS Compl. ¶ 7.

On April 21, 2023, the IRS moved to dismiss Goebel’s complaint for lack of

subject matter jurisdiction. The IRS argued that 28 U.S.C. § 2201(a), the federal

tax exception to the Declaratory Judgment Act, prohibited relief, and that, in any

event, Goebel’s complaint did not present a justiciable dispute.

Goebel did not complete service of process on the IRS as to her adversary complaint until March 22, 2023, though the IRS notes in its briefing that “the Government received actual notice of the adversary complaint some time before it was served.” Appellant’s Br. 6–7.

Following a bench ruling, Judge Lord entered an order denying the motion

to dismiss and directing supplemental pleading on March 18, 2024. The court

explained that “[a]lthough it is true that ripeness is determined as of the date the

complaint was filed . . . this court will not turn a blind eye to the reality of the

situation and will not ignore the commencement of the District Court action so as

to dismiss the adversary proceeding, even if it would be without prejudice.”

App’x 247. Judge Lord thus held that “the Plaintiff may supplement her

complaint pursuant to Rule 15(d) to include allegations regarding the subsequent

commencement of the District Court action” and cure the potential jurisdictional

defect. App’x 249. The court further concluded that the Declaratory Judgment

Act did not bar Goebel’s requested relief. Goebel filed the supplemental

complaint on March 28, 2024.

In April, the IRS filed a notice of appeal with the bankruptcy court and a

motion for leave to appeal under 28 U.S.C. § 158(a)(3) with the district court. On

August 8, 2024, the district court concluded that “it must deny the Government’s

motion for leave to appeal to this Court and certify this appeal directly to the

Second Circuit Court of Appeals as it ‘involves a question of law as to which there

is no controlling decision of the court of appeals for the circuit or of the Supreme

Court of the United States.’” App’x 221 (quoting 28 U.S.C. § 158(d)(2)(A)–(B)).

In light of its decision to certify the appeal, the district court stayed the adversary

proceedings before the bankruptcy court. This Court authorized the appeal on

January 15, 2025.

DISCUSSION

On appeal, the IRS argues that the bankruptcy court erred in declining to

dismiss Goebel’s complaint. We agree. The complaint did not plausibly allege

an injury in fact because it provided no facts indicating that the IRS intended to

collect on Goebel’s debts post-discharge. A debtor’s concern that the IRS might

someday assert that various debts were excluded from discharge does not suffice,

on its own, to create an Article III case or controversy. And independent of

whether a supplemental complaint can cure a jurisdictional defect of constitutional

dimension, the bankruptcy court should have deferred to the district court as the

first court to obtain jurisdiction over the case.

“Under Article III, federal courts do not adjudicate hypothetical or abstract

disputes.” 3 TransUnion LLC v. Ramirez, 594 U.S. 413, 423 (2021). “For there to be

To be sure, bankruptcy courts are not Article III courts. See Stern v. Marshall, 564 U.S. 462, 502–03 (2011). But, at least with respect to adversary proceedings, we agree

a case or controversy under Article III, the plaintiff must have a ‘personal stake’ in

the case—in other words, standing.” Id. (citation modified) (quoting Raines v.

Byrd, 521 U.S. 811, 819 (1997)). “[T]o establish standing, a plaintiff must show (i)

that he suffered an injury in fact that is concrete, particularized, and actual or

imminent; (ii) that the injury was likely caused by the defendant; and (iii) that the

injury would likely be redressed by judicial relief.” Id.; see also Lujan v. Defenders

of Wildlife, 504 U.S. 555, 560–61 (1992).

The “actual or imminent” aspect of the injury-in-fact requirement, while

“concededly a somewhat elastic concept,” serves “to ensure that the alleged injury

is not too speculative for Article III purposes.” Clapper, 568 U.S. at 409 (quoting

Lujan, 504 U.S. at 565 n.2); see also Whitmore v. Arkansas, 495 U.S. 149, 158 (1990)

(“Allegations of possible future injury do not satisfy the requirements of Art. III.”).

with the circuits that have concluded “Article III’s standing requirements apply to proceedings in bankruptcy courts just as they do to proceedings in district courts.” In re Res. Tech. Corp., 624 F.3d 376, 382 (7th Cir. 2010); see also In re Glob. Indus. Techs., Inc., 645 F.3d 201, 210 (3d Cir. 2011); In re Farmland Indus., Inc., 639 F.3d 402, 405 (8th Cir. 2011); In re Thorpe Insulation Co., 677 F.3d 869, 884 (9th Cir. 2012). Though we recognize the Fourth and Fifth Circuits have viewed the issue differently, see Kiviti v. Bhatt, 80 F.4th 520, 532–33 (4th Cir. 2023); In re Highland Cap. Mgmt., L.P., 74 F.4th 361, 366–67 (5th Cir. 2023), those decisions fail to “recognize the derivative nature of bankruptcy court jurisdiction,” In re Pettine, 655 B.R. 196, 211 (B.A.P. 10th Cir. 2023), under 28 U.S.C. § 157 and § 1334.

Nonetheless, “[a]n allegation of future injury may suffice if the threatened injury

is ‘certainly impending,’ or there is a ‘substantial risk that the harm will occur.’” 4

Susan B. Anthony List v. Driehaus, 573 U.S. 149, 158 (2014) (citation modified and

alterations accepted) (quoting Clapper, 568 U.S. at 414 & n.5).

“[W]e review jurisdictional questions of law de novo.” In re Barnet, 737 F.3d

238, 242 (2d Cir. 2013). To survive a motion to dismiss for lack of standing, a

plaintiff “must allege facts that affirmatively and plausibly suggest that it has

standing to sue.” Amidax Trading Grp. v. S.W.I.F.T. SCRL, 671 F.3d 140, 145 (2d

Cir. 2011). In this context, “[a]ll allegations made in the complaint are accepted

as true and construed in favor of the plaintiff[].” Liberian Cmty. Ass’n of Conn. v.

Lamont, 970 F.3d 174, 184 (2d Cir. 2020).

“Constitutional ripeness is a doctrine that, like standing, is a limitation on the power of the judiciary.” Simmonds v. I.N.S., 326 F.3d 351, 357 (2d Cir. 2003). A case is not constitutionally ripe where it is “dependent on ‘contingent future events that may not occur as anticipated, or indeed may not occur at all.’” Trump v. New York, 592 U.S. 125, 131 (2020) (quoting Texas v. United States, 523 U.S. 296, 300 (1998)). “Crucially, the doctrine of constitutional ripeness ‘overlaps with the standing doctrine, most notably in the shared requirement that the plaintiff’s injury be imminent rather than conjectural or hypothetical.’” Lacewell v. Off. of Comptroller of Currency, 999 F.3d 130, 149 (2d Cir. 2021) (quoting In re MTBE Prods. Liab. Litig., 725 F.3d 65, 110 (2d Cir. 2013)). Accordingly, where, as here, the constitutional ripeness of a case turns on “that shared requirement,” we need “not address ripeness separately” and will “consider it together with, and as part of, the standing inquiry.” Brooklyn Legal Servs. Corp. v. Legal Servs. Corp., 462 F.3d 219, 225–26 (2d Cir. 2006), abrogated on other grounds by Bond v. United States, 564 U.S. 211 (2011).

Here, Goebel’s initial complaint did not plausibly allege that she faced a

substantial risk of harm. Once Goebel filed her bankruptcy petition, the

automatic stay provided by the Bankruptcy Code precluded any collection efforts.

See 11 U.S.C. § 362. Though the automatic stay would expire if and when Goebel

received a discharge, see 11 U.S.C. § 362(c)(2)(C), a discharge order “releases a

debtor from personal liability with respect to any discharged debt by voiding any

past or future judgments on the debt and by operating as an injunction to prohibit

creditors from attempting to collect or to recover the debt.” Tennessee Student

Assistance Corp. v. Hood, 541 U.S. 440, 447 (2004). In other words, following

discharge, Goebel faced the prospect of personal liability on her debts only if a

creditor could successfully argue the debts were nondischargeable. See 11 U.S.C.

§§ 523, 524.

Whether Goebel faced a substantial risk of harm thus depended on the

likelihood that an exception to dischargeability applied. As the IRS argues,

though “Goebel’s complaint broadly reference[d] 11 U.S.C. § 523(a)(1),” the only

relevant provision was § 523(a)(1)(C) “because the other provisions of 11 U.S.C.

§ 523(a)(1) are largely based on time periods that are easily calculated,” and that

precluded their applicability. Appellant’s Br. 20–21; see also 4 COLLIER ON

BANKRUPTCY ¶ 523.07 (Richard Levin & Henry J. Sommer eds., 16th ed. 2026)

[“COLLIER ON BANKRUPTCY”]. But § 523(a)(1)(C) has no such time limitations,

and excepts from discharge all tax debts “with respect to which the debtor made

a fraudulent return or willfully attempted in any manner to evade or defeat such

tax.”

To collect on Goebel’s debts pursuant to § 523(a)(1)(C), the IRS would have

to establish both “a conduct element (an attempt to evade or defeat taxes) and a

mens rea requirement (willfulness),” In re Tudisco, 183 F.3d 133, 136 (2d Cir. 1999),

by a preponderance of the evidence, see Grogan v. Garner, 498 U.S. 279, 286–87

(1991). Goebel’s complaint “set forth no specific facts,” Clapper, 568 U.S. at 412,

suggesting that the IRS believed Goebel met either element of § 523(a)(1)(C) or that

the IRS otherwise manifested a concrete intention to assert that Goebel’s debts

were nondischargeable. 5 See also IRS v. Wallace, No. 23-CV-1331-JES, 2023 WL

7360835, at *5 (C.D. Ill. Nov. 7, 2023) (noting that “it would not be reasonable for

Because we conclude Goebel did not plausibly allege a substantial risk of harm in her initial complaint, we need not address the IRS’s argument that the entry of a general discharge was an additional “prerequisite[],” Appellant’s Br. 17, to the justiciability of Goebel’s complaint.

Mr. Wallace, assuming that he was an honest debtor, to worry over the

dischargeability of his debts under § 523(a)(1)(C)”). Indeed, Goebel’s complaint

does not specifically reference § 523(a)(1)(C) at all. See App’x 18–36.

Absent facts demonstrating such a substantial risk, Goebel’s “fear” that the

IRS might someday seek to assert that § 523(a)(1)(C) applied was “necessarily

conjectural” and did not establish an injury in fact. 6 Clapper, 568 U.S. at 412. “It

is the reality of the threat of . . . injury that is relevant to the standing inquiry, not

the plaintiff’s subjective apprehensions.” City of Los Angeles v. Lyons, 461 U.S. 95,

107 n.8 (1983) (emphasis omitted); see also Clapper, 568 U.S. at 416 (“In other words,

respondents cannot manufacture standing merely by inflicting harm on

themselves based on their fears of hypothetical future harm that is not certainly

impending.”); Wallace, 2023 WL 7360835, at * 5 (“And, even if Mr. Wallace is

simultaneous[ly] of strong moral fiber and yet impractically concerned, worried,

upset, or stressed about his tax debt, such injuries, while important, are

insufficiently concrete to support his standing to bring a claim.”).

To be sure, subsequent events make the IRS’s intent to assert nondischargeability seem obvious. But our inquiry turns on the facts pled in Goebel’s complaint, not on hindsight.

Because Goebel did not plausibly allege an injury in fact in her complaint,

the bankruptcy court lacked jurisdiction. Goebel makes an array of arguments to

the contrary, but none persuades.

Goebel first argues that “the plain language of the Bankruptcy Code and the

Bankruptcy Rules authorized [her] to bring her complaint when she did (in

October 2022) and where she did (in bankruptcy court).” Appellee’s Br. 10. But

even assuming arguendo that Goebel is correct in her interpretation of the various

statutory provisions and rules, this Court has a “responsibility to independently

decide whether a plaintiff has suffered a concrete harm under Article III.”

TransUnion, 594 U.S. at 426. Accordingly, the Supreme Court “has rejected the

proposition that ‘a plaintiff automatically satisfies the injury-in-fact requirement

whenever a statute grants a person a statutory right and purports to authorize that

person to sue to vindicate that right.’” Id. (quoting Spokeo, Inc. v. Robins, 578 U.S.

330, 341 (2016)); see also Thole v. U.S. Bank N.A., 590 U.S. 538, 544 (2020) (“But the

cause of action does not affect the Article III standing analysis.”).

Goebel’s efforts to analogize § 523(a)(1)(C) to other statutory provisions in

which, consistent with Article III, bankruptcy courts make various determinations

regarding debts fall flat. Each of the statutory contexts Goebel references differs

meaningfully from the one here. Section 523(c) provides that for certain types of

nondischargeable debts, a creditor must affirmatively raise nondischargeability

with the bankruptcy court prior to entry of a general discharge. See also

Bankruptcy Rule 4007(c). But a creditor who raises such an objection does, unlike

Goebel, allege a plausible injury in fact because, absent their objection, the creditor

is certain to suffer pocketbook injury. See Czyzewski v. Jevic Holding Corp., 580 U.S.

451, 464 (2017) (“For standing purposes, a loss of even a small amount of money is

ordinarily an ‘injury.’”). In a no-asset bankruptcy, a creditor with a covered debt

who does not file a complaint within the allotted time forfeits the right to recover

the balance of the debt following the entry of a general discharge.

Another provision, § 505, provides that a bankruptcy court “may determine

the amount or legality of any tax, any fine or penalty relating to a tax, or any

addition to tax, whether or not previously assessed, whether or not paid, and

whether or not contested before and adjudicated by a judicial or administrative

tribunal of competent jurisdiction.” 11 U.S.C. § 505(a)(1). And 11 U.S.C.

§ 507(a)(8) grants priority to certain tax debts, with § 523(a)(1)(A) making such

priority claims nondischargeable. In adjudicating issues related to these

provisions, bankruptcy courts make determinations necessary to resolve

bankruptcy cases. In contrast, the court can distribute a Chapter 7 debtor’s assets

to creditors and subsequently grant a general discharge without determining

whether § 523(a)(1) applies to any debts. See Hinton v. United States, No. 09-CV6920, 2011 WL 1838724, at *4 (N.D. Ill. May 12, 2011) (“Bankruptcy courts have

adjudicated dischargeability complaints in pending chapter 13 cases, but with one

exception these cases included a finding that determination of dischargeability

could affect the distribution of payments under the plan, a factor not present in a

chapter 7 situation.”). Whether the exception applies affects the debtor’s

personal liability in the future, not the distribution of the estate.

In other words, incidental to resolving justiciable cases, courts may decide

various issues relating to tax debts in advance. But courts’ ability to make such

determinations as part of deciding otherwise justiciable cases does not relieve

plaintiffs of their burden plausibly to allege the existence of an injury in fact.

Lastly, in a Chapter 13 case, the Ninth Circuit adjudicated and found

constitutionally ripe a plaintiff’s request for “a determination that it would

constitute an undue hardship under 11 U.S.C. § 523(a)(8) for her to repay her

student loans, and that her student loans should therefore not be excepted from

discharge.” In re Coleman, 560 F.3d 1000, 1003 (9th Cir. 2009). But, unlike this

case, Coleman involved a plausible injury in fact. As that court observed, “the

hardship to Coleman [was] committing to a Chapter 13 plan for three to five years

without any guarantee that her student loans [would] be discharged at the end of

this time period.” Id. at 1010; see also id. (“Because debtors must commit all of

their disposable income to payments under a Chapter 13 plan, 11 U.S.C.

§ 1325(b)(1)[–](2), five years repayment is a considerable burden to bear without

any guarantee that the debt will be ultimately discharged.” (emphasis in

original)). 7

Goebel next argues that the case is justiciable because “[b]ankruptcy is and

always [has] been an ‘in rem’ proceeding.” Appellee’s Br. 16 (italics omitted)

(quoting Hood, 541 U.S. at 447). To be sure, “[t]he discharge of a debt by a

bankruptcy court is . . . an in rem proceeding.” Hood, 541 U.S. at 447 (italics

7 We note that the Fifth and Eighth Circuits have viewed the issue differently than the Ninth Circuit. See In re Rubarts, 896 F.2d 107, 109 (5th Cir. 1990); In re Bender, 368 F.3d 846, 848 (8th Cir. 2004). We need not here take a position as to whether the Ninth Circuit’s or the Fifth and Eighth Circuits’ approach is more correct. We observe only that the Ninth Circuit’s approach appears to comport with the allowance of such a debtorbrought dischargeability claim as seen in the facts of Hood. See 541 U.S. at 443–45; see also infra at 18 (discussing Hood’s holding regarding in rem jurisdiction).

omitted). But Goebel misunderstands the significance of the in rem nature of a

bankruptcy proceeding as it pertains to Article III jurisdiction.

Although in rem jurisdiction “is premised on the res,” Hood, 541 U.S. at 448,

and has implications for whether a case implicates sovereign immunity, see id.,

where a court exercises in rem jurisdiction, a plaintiff must still have Article III

standing. See, e.g., United States v. Cambio Exacto, S.A., 166 F.3d 522, 527 (2d Cir.

1999) (“In determining standing to challenge a forfeiture, we look to ownership

and possession because they are often reliable indicators of injury that occurs

when property is seized.”); United States v. Batato, 833 F.3d 413, 435 (4th Cir. 2016)

(“As the district court found after a thorough analysis of New Zealand property

law, Mrs. Dotcom has failed to articulate such an injury because she has not

asserted a nonhypothetical legal interest in the property.”). While the standing

inquiry for in rem proceedings may vary slightly from the inquiry for in personam

proceedings, we need not delineate precise boundaries today. It suffices to state

that the in rem nature of bankruptcy proceedings did not relieve Goebel of her

“burden of alleging facts that affirmatively and plausibly suggest[ed] that [she]

ha[d] standing to sue” in an adversary proceeding. Calcano v. Swarovski N. Am.

Ltd., 36 F.4th 68, 75 (2d Cir. 2022) (quoting Cortlandt St. Recovery Corp. v. Hellas

Telecomms., S.à.r.l., 790 F.3d 411, 417 (2d Cir. 2015)).

Finally, Goebel contends she has standing because the tax debts represent

contingent liabilities. Appellee’s Br. 16 (“If the old tax debts are discharged, Ms.

Goebel owes the IRS nothing, if the old tax debts are not discharged, Ms. Goebel

owes the IRS more than $500,000. The old tax debts are therefore a contingent

liability.”). To be sure, “a liability, including a contingent liability, may be a

cognizable legal injury.” Carter v. HealthPort Techs., LLC, 822 F.3d 47, 55 (2d Cir.

2016).

We have never suggested, however, that a contingent liability always

qualifies as an injury in fact. As in any case involving an allegation of future

injury, the question remains whether the contingent liability “creates an imminent

threat of injury.” California Dep’t of Toxic Substances Control v. Jim Dobbas, Inc., 54

F.4th 1078, 1086 (9th Cir. 2022); see also Protocols, LLC v. Leavitt, 549 F.3d 1294, 1299

(10th Cir. 2008) (noting that because “a contingent liability, by definition, may not

arise for a considerable time, if ever,” the question remains whether the

“consequences of a contingent liability” are “actual or imminent”); cf. 10B WRIGHT

& MILLER’S FEDERAL PRACTICE & PROCEDURE, CIVIL § 2757 (4th ed. 2008) (“In other

instances the contingency is so remote and unlikely that declaratory relief cannot

be had.”); Maryland Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273 (1941)

(“Basically, the question in each case is whether the facts alleged [in each case

seeking declaratory judgment] . . . show that there is a substantial controversy,

between parties having adverse legal interests, of sufficient immediacy and reality

to warrant the issuance of a declaratory judgment.”). And, for the reasons

discussed above, Goebel failed to identify any actual or imminent consequences in

her complaint.

In arguing otherwise, Goebel relies on the Supreme Court’s decision in

Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 242 (1937). That reliance is misplaced.

In Aetna, the Court concluded a controversy existed where “the parties had taken

adverse positions with respect to their existing obligations.” Id. The insured

argued that “he had become totally and permanently disabled and hence was

relieved of the obligation to continue the payment of premiums and was entitled

to the stipulated disability benefits and to the continuance of the policies in force.”

Id. And “the company made an equally definite claim that the alleged basic fact

did not exist, that the insured was not totally and permanently disabled and had

not been relieved of the duty to continue the payment of premiums, that in

consequence the policies had lapsed, and that the company was thus freed from

its obligation either to pay disability benefits or to continue the insurance in force.”

Id. Unlike the plaintiff in Aetna, unless and until the IRS asserted that

§ 523(a)(1)(C) applied, Goebel suffered no cognizable immediate consequences.

Goebel’s citation to MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007),

fares no better. There, MedImmune sought a declaratory judgment where

Genetech had “delivered [MedImmune] a letter expressing its belief that [a new

drug] was covered by [a] patent and its expectation that [MedImmune] would pay

royalties beginning March 1, 2002.” Id. at 121. MedImmune “considered the

letter to be a clear threat to enforce the . . . patent, terminate the 1997 license

agreement, and sue for patent infringement if [MedImmune] did not make royalty

payments as demanded.” Id. at 122. Unlike this case, MedImmune thus involved

a “plaintiff’s self-avoidance of imminent injury.” Id. at 130. Because Goebel

failed plausibly to allege the existence of such an imminent injury, her complaint

did not present a justiciable dispute.

Though we hold the bankruptcy court lacked jurisdiction over Goebel’s

complaint, the question remains whether, as the bankruptcy court believed,

following the IRS’s filing, Goebel could cure any jurisdictional deficiencies in her

initial complaint by filing a supplemental complaint under Bankruptcy Rule 7015

and Fed. R. Civ. Proc. Rule 15(d). 8 “Although we have discussed the question in

dicta, we have never squarely addressed whether events occurring after the filing

of a complaint may cure a jurisdictional defect that existed at the time of initial

filing. That question has divided our sister circuits.” Saleh v. Sulka Trading Ltd.,

957 F.3d 348, 354 (2d Cir. 2020) (citation omitted); see also id. at 354 n.7 (collecting

cases). As in Saleh, “[w]e need not answer it here,” id. at 355, because even

assuming arguendo that a supplemental complaint could cure a jurisdictional

Rule 15(d), made applicable to bankruptcy proceedings by Bankruptcy Rule 7015, provides:

On motion and reasonable notice, the court may, on just

terms, permit a party to serve a supplemental pleading setting

out any transaction, occurrence, or event that happened after

the date of the pleading to be supplemented. The court may

permit supplementation even though the original pleading is

defective in stating a claim or defense. The court may order

that the opposing party plead to the supplemental pleading

within a specified time.

defect relating to a constitutional requirement, the bankruptcy court abused its

discretion in failing to dismiss Goebel’s suit as duplicative of a preexisting,

jurisdictionally proper suit.

“We have recognized ‘the basic proposition that the first court to obtain

jurisdiction of the parties and of the issues should have priority over a second

court to do so.’” AEP Energy Servs. Gas Holding Co. v. Bank of Am., N.A., 626 F.3d

699, 722 (2d Cir. 2010) (quoting Nat’l Equip. Rental, Ltd. v. Fowler, 287 F.2d 43, 45

(2d Cir. 1961)). That “rule embodies considerations of judicial administration

and conservation of resources.” First City Nat’l Bank & Tr. Co. v. Simmons, 878

F.2d 76, 80 (2d Cir. 1989). Though often referred to as the “first to file rule,” id. at

77, the rule stems from the principle that “a party who first brings an issue into a

court of competent jurisdiction should be free from the vexation of concurrent

litigation over the same subject matter,” Fowler, 287 F.2d at 46 (emphasis added).

In short, priority generally lies with the first jurisdictionally proper suit. 9

“While the decision whether or not to stay or dismiss a proceeding rests within a

As a technical matter, this case involves a related but distinct rule. See Marciniak v. Massachusetts Inst. of Tech., No. 23 CIV. 10305 (JPC), 2024 WL 4350872, at *7-8 (S.D.N.Y. Sept. 29, 2024) (noting that the first-to-file rule “applies when two competing lawsuits are filed in different federal judicial districts,” whereas the rule against duplicative litigation applies “when two competing lawsuits are filed within the same judicial district” (emphasis in original)). Because, as we explain below, the bankruptcy court’s

district judge’s discretion, normally ‘[s]ound judicial discretion dictates that the

second court decline its consideration of the action before it until the prior action

before the first court is terminated,’ and ‘a district court can go beyond the

allowable bounds of discretion when it refuses to stay or dismiss a duplicative

suit[.]’” AEP, 626 F.3d at 723 (citation modified) (first quoting Fowler, 287 F.2d at

45; then quoting Adam v. Jacobs, 950 F.2d 89, 92 (2d Cir. 1991)).

Here, the IRS suit was the first jurisdictionally proper suit. As discussed

above, Goebel’s initial complaint failed plausibly to allege the existence of an

injury in fact. So, even if Goebel could cure the deficiencies in the original

complaint by filing a supplemental complaint, the bankruptcy court would only

obtain jurisdiction over the case at that time and would still be obligated to defer

to the district court. Cf. Royal Canin U.S.A., Inc. v. Wullschleger, 604 U.S. 22, 35–36

(2025) (“The reconfiguration accomplished by an amendment may bring the suit

either newly within or newly outside a federal court’s jurisdiction.”); 6A WRIGHT

& MILLER’S FEDERAL PRACTICE & PROCEDURE, CIVIL § 1508 (4th ed. 2008) (“[T]he

relation back of a supplemental pleading should not result in providing unfair

jurisdiction is derivative of the district court’s jurisdiction, the rule against duplicative litigation governs. In any case, whichever rule applies, deference to the first jurisdictionally proper suit remains appropriate.

procedural advantages to a plaintiff so that relation back may not be for all

purposes. For example, if the court initially issues a preliminary injunction in an

action in which there is no case or controversy present when the suit is filed, later

events which establish that the claim now has matured should not be allowed to

relate back to support the propriety of the issuance of the preliminary

injunction.”); Coastal Corp. v. Texas E. Corp., 869 F.2d 817, 821 n.3 (5th Cir. 1989)

(“Coastal’s amended complaint filed on January 31 conferred jurisdiction on the

district court at least from thence forward because it alleged that Texas Eastern

had issued press releases that violated the Williams Act in the manner of their

opposition to the tender offer.”). Accordingly, the bankruptcy court should have

dismissed Goebel’s complaint for lack of subject matter jurisdiction rather than

authorize the filing of a supplemental complaint.

Goebel argues, however, that “the law provides superior jurisdiction to the

bankruptcy court on discharge issues brought in other courts.” Appellee’s Br. 23.

Accordingly, she contends that “there cannot be a first-to-file rule in

dischargeability litigation—especially where, as here, the bankruptcy case is not

closed.” Id. But Goebel misinterprets both 28 U.S.C. § 1452 and 11 U.S.C.

§ 524(a)(2), the statutory provisions on which she relies.

First, § 1452 allows for the removal of certain claims related to bankruptcy

cases “to the district court for the district where such civil action is pending.” 28

U.S.C. § 1452(a) (emphasis added). And 28 U.S.C. § 1334(a) and (b) provide that

“the district courts shall have original and exclusive jurisdiction of all cases under

title 11” and “original but not exclusive jurisdiction of all civil proceedings arising

under title 11, or arising in or related to cases under title 11.” Id. § 1334(a)–(b)

(emphasis added). Accordingly, “it is illogical to interpret the bankruptcy

removal statute to authorize removal from a district court to the district court in the

same district.” In re Curtis, 571 B.R. 441, 445 (B.A.P. 9th Cir. 2017); see also United

States v. Mikhov, 645 B.R. 609, 615 (S.D. Ind. 2022) (noting that “[t]he plain language

of 28 U.S.C. § 1452 does not authorize removal to a bankruptcy court”).

To be sure, 28 U.S.C. § 157 states that “[e]ach district court may provide that

any or all cases under title 11 and any or all proceedings arising under title 11 or

arising in or related to a case under title 11 shall be referred to the bankruptcy

judges for the district.” 28 U.S.C. § 157. But as a Bankruptcy Appellate Panel

has explained:

The predicate for the referral power is the bedrock principle

that the district courts have jurisdiction over bankruptcy cases and

proceedings; the bankruptcy court’s jurisdiction over such matters is

purely and solely derivative of the district court’s jurisdiction. And

the bankruptcy court’s power to hear, or to hear and determine, as the

case may be, bankruptcy cases and proceedings is entirely dependent

upon the referral by the district court.

Curtis, 571 B.R. at 447. So, there is nothing anomalous about the bankruptcy court

deferring to the district court that first obtained jurisdiction over the case because

the bankruptcy court depends on that district court for its jurisdiction in the first

place.

Second, § 524(a) provides, among other things, that a discharge “voids any

judgment at any time obtained, to the extent that such judgment is a determination

of the personal liability of the debtor with respect to any debt discharged” and

“operates as an injunction against the commencement or continuation of an action,

the employment of process, or an act, to collect, recover or offset any such debt as

a personal liability of the debtor, whether or not discharge of such debt is waived.”

11 U.S.C. § 524(a)(1)-(2). But “the discharge applies only to debts that are

discharged.” 4 COLLIER ON BANKRUPTCY ¶ 524.02. So “a proceeding seeking a

determination that a debt was not discharged would not violate the injunction.”

Id. Likewise, a judgment would be void under § 524 only if it applied to a

discharged debt. See 11 U.S.C. § 524. In other words, § 524 does not grant the

bankruptcy court superior jurisdiction over litigation regarding nondischargeable

debts. Accordingly, the bankruptcy court should have granted the IRS’s motion

to dismiss Goebel’s complaint in deference to the district court’s jurisdiction.

CONCLUSION

In sum, we conclude that Goebel’s complaint did not plausibly allege an

injury in fact. And regardless of whether a supplemental complaint could

remedy that jurisdictional defect, the bankruptcy court should have deferred to

the district court as the first court to obtain jurisdiction over the case. We

therefore hold that the bankruptcy court erred in denying the IRS’s motion to

dismiss. Accordingly, we VACATE the bankruptcy court’s order and REMAND

with instructions to dismiss Goebel’s complaint and supplemental complaint.

In Re: Laura Charlene Goebel

Authorities cited

Opinion · public domain