25-103 In Re: Laura Charlene Goebel
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
1 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
2 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
3 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
4 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
1 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.
5 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.
2 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.
6 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
7 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.
I
“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
3 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
8 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.
9 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).
4 “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).
10 A
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
11 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
5 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.
12 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.”).
6 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.
13 B
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
14 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
15 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-CV-
6920, 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
16 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 debtor- brought 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).
17 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.
18 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
19 & 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
20 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.
21 II
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
8 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.
22 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
9 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
23 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.
24 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.
25 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
26 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
27 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.