United Student Aid Funds, Inc. v. Espinosa

(Slip Opinion) OCTOBER TERM, 2009 1

Syllabus

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is

being done in connection with this case, at the time the opinion is issued.

The syllabus constitutes no part of the opinion of the Court but has been

prepared by the Reporter of Decisions for the convenience of the reader.

See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

Syllabus

UNITED STUDENT AID FUNDS, INC. v. ESPINOSA

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR

THE NINTH CIRCUIT

No. 08–1134. Argued December 1, 2009—Decided March 23, 2010

A plan proposed under Bankruptcy Code (Code) Chapter 13 becomes

effective upon confirmation, see 11 U. S. C. §§1324, 1325, and will re

sult in a discharge of the debts listed in the plan if the debtor com

pletes the payments the plan requires, see §1328(a). A debtor may

obtain a discharge of government-sponsored student loan debts only

if failure to discharge that debt would impose an “undue hardship” on

the debtor and his dependents. §§523(a)(8); 1328. Bankruptcy courts

must make this undue hardship determination in an adversary pro

ceeding, see Fed. Rule Bkrtcy. Proc. 7001(6), which the party seeking

the determination must initiate by serving a summons and complaint

on his adversary, see Rules 7003, 7004, 7008. Respondent Espinosa’s

plan proposed repaying the principal on his student loan debt and

discharging the interest once the principal was repaid, but he did not

initiate the required adversary proceeding. The student loan credi

tor, petitioner United, received notice of the plan from the Bank

ruptcy Court and did not object to the plan or to Espinosa’s failure to

initiate the required proceeding. The Bankruptcy Court confirmed

the plan without holding such a proceeding or making a finding of

undue hardship. Once Espinosa paid his student loan principal, the

court discharged the interest. A few years later, the Department of

Education sought to collect that interest. In response, Espinosa

asked the court to enforce the confirmation order by directing the

Department and United to cease any collection efforts. United op

posed the motion and filed a cross-motion under Federal Rule of Civil

Procedure 60(b)(4), seeking to set aside as void the confirmation or

der because the plan provision authorizing discharge of Espinosa’s

student loan interest was inconsistent with the Code and the Bank

ruptcy Rules, and because United’s due process rights were violated

2 UNITED STUDENT AID FUNDS, INC. v. ESPINOSA

Syllabus

when Espinosa failed to serve it with the required summons and

complaint. Rejecting those arguments, the Bankruptcy Court

granted Espinosa’s motion in relevant part and denied the cross

motion. The District Court reversed, holding that United was denied

due process when the confirmation order was issued without the re

quired service. The Ninth Circuit ultimately reversed. It concluded

that by confirming Espinosa’s plan without first finding undue hard

ship in an adversary proceeding, the Bankruptcy Court at most

committed a legal error that United might have successfully ap

pealed, but that such error was no basis for setting aside the order as

void under Rule 60(b)(4). It also held that Espinosa’s failure to serve

United was not a basis upon which to declare the judgment void be

cause United received actual notice of the plan and failed to object.

Held:

1. The Bankruptcy Court’s confirmation order is not void under

Rule 60(b)(4). Pp. 6–14.

(a) That order was a final judgment from which United did not

appeal. Such finality ordinarily would “stan[d] in the way of chal

lenging [the order’s] enforceability,” Travelers Indemnity Co. v. Bai

ley, 557 U. S. ___, ___. However, Rule 60(b)(4) allows a party to seek

relief from a final judgment that “is void,” but only in the rare in

stance where a judgment is premised either on a certain type of ju

risdictional error or on a violation of due process that deprives a

party of notice or the opportunity to be heard. United’s alleged error

falls in neither category. Conceding that the Bankruptcy Court had

jurisdiction to enter the confirmation order, United contends that the

judgment is void because United did not receive adequate notice of

Espinosa’s proposed discharge. Espinosa’s failure to serve the sum

mons and complaint as required by the Bankruptcy Rules deprived

United of a right granted by a procedural rule. United could have

timely objected to this deprivation and appealed from an adverse rul

ing on its objection. But this deprivation did not amount to a viola

tion of due process, which requires notice “reasonably calculated, un

der all the circumstances, to apprise interested parties of the

pendency of the action and afford them an opportunity to present

their objections,” Mullane v. Central Hanover Bank & Trust Co., 339

U. S. 306, 314. Here, United’s actual notice of the filing and contents

of Espinosa’s plan more than satisfied its due process rights. Thus,

Espinosa’s failure to make the required service does not entitle

United to relief under Rule 60(b)(4). Pp. 7–10.

(b) Contrary to United’s claim, the confirmation order is not void

because the Bankruptcy Court lacked statutory authority to confirm

Espinosa’s plan absent an undue hardship finding under §523(a)(8).

Such failure is not on par with the jurisdictional and notice failings

Cite as: 559 U. S. ____ (2010) 3

Syllabus

that define void judgments qualifying for Rule 60(b)(4) relief. Section

523(a)(8) does not limit a bankruptcy court’s jurisdiction over student

loan debts or impose requirements that, if violated, would result in a

denial of due process. Instead, it requires a court to make a certain

findings before confirming a student loan debt’s discharge. ‘That this

requirement is “ ‘self-executing,’ ” Tennessee Student Assistance Cor

poration v. Hood, 541 U. S. 440, 450, means only that the bankruptcy

court must make an undue hardship finding even if the creditor does

not request one; it does not mean that a bankruptcy court’s failure to

make the finding renders its subsequent confirmation order void for

Rule 60(b)(4) purposes. Although the Bankruptcy Court’s failure to

find undue hardship was a legal error, the confirmation order is en

forceable and binding on United because it had actual notice of the

error and failed to object or timely appeal. Pp. 10–14.

2. The Ninth Circuit erred in holding that bankruptcy courts must

confirm a plan proposing the discharge of a student loan debt without

an undue hardship determination in an adversary proceeding unless

the creditor timely raises a specific objection. A Chapter 13 plan pro

posing such a discharge without the required determination violates

§§1328(a)(2) and 523(a)(8). Failure to comply with this self-executing

requirement should prevent confirmation even if the creditor fails to

object, or to appear in the proceeding at all, since a bankruptcy court

may confirm only a plan that, inter alia, complies with the “applica

ble provisions” of the Code. §1325(a). Neither the Code nor the Rules

prevent parties from stipulating to the underlying facts of undue

hardship or prevent the creditor from waiving service of a summons

and complaint. Pp. 14–16.

3. Expanding the availability of Rule 60(b)(4) relief is not an ap

propriate prophylaxis for discouraging unscrupulous debtors from fil

ing Chapter 13 plans proposing to dispense with the undue hardship

requirement in hopes that the bankruptcy court will overlook the

proposal and the creditor will not object. Such bad-faith efforts

should be deterred by the specter of penalties that “[d]ebtors and

their attorneys face . . . under various provisions for engaging in im

proper conduct in bankruptcy proceedings,” Taylor v. Freeland &

Kronz, 503 U. S. 638, 644. And Congress may enact additional provi

sions to address any difficulties should existing sanctions prove in

adequate. Pp. 16–17.

553 F. 3d 1193, affirmed.

THOMAS, J., delivered the opinion for a unanimous Court.

Cite as: 559 U. S. ____ (2010) 1

Opinion of the Court

NOTICE: This opinion is subject to formal revision before publication in the

preliminary print of the United States Reports. Readers are requested to

notify the Reporter of Decisions, Supreme Court of the United States, Wash­

ington, D. C. 20543, of any typographical or other formal errors, in order

that corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES

_________________

No. 08–1134

_________________

UNITED STUDENT AID FUNDS, INC., PETITIONER v.

FRANCISCO J. ESPINOSA

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE NINTH CIRCUIT

[March 23, 2010]

JUSTICE THOMAS delivered the opinion of the Court.

Under Chapter 13 of the Bankruptcy Code (Code), a

debtor may obtain a discharge of certain government­

sponsored student loan debts only if failure to discharge

that debt would impose an “undue hardship” on the debtor

and his dependents. 11 U. S. C. §§523(a)(8), 1328. The

Federal Rules of Bankruptcy Procedure require bank­

ruptcy courts to make this undue hardship determination

in an adversary proceeding, see Rule 7001(6), which the

party seeking the determination must initiate by serving a

summons and complaint on his adversary, see Rules 7003,

7004, 7008. The debtor in this case filed a plan with the

Bankruptcy Court that proposed to discharge a portion of

his student loan debt, but he failed to initiate the adver­

sary proceeding as required for such discharge. The credi­

tor received notice of, but did not object to, the plan, and

failed to file an appeal after the Bankruptcy Court subse­

quently confirmed the plan. Years later, the creditor filed

a motion under Federal Rule of Civil Procedure 60(b)(4)

asking the Bankruptcy Court to rule that its order con­

firming the plan was void because the order was issued in

2 UNITED STUDENT AID FUNDS, INC. v. ESPINOSA

Opinion of the Court

violation of the Code and Rules. We granted certiorari to

resolve a disagreement among the Courts of Appeals as to

whether an order that confirms the discharge of a student

loan debt in the absence of an undue hardship finding or

an adversary proceeding, or both, is a void judgment for

Rule 60(b)(4) purposes.

I

Between 1988 and 1989, respondent Francisco Espinosa

obtained four federally guaranteed student loans for a

total principal amount of $13,250. In 1992, Espinosa filed

a bankruptcy petition under Chapter 13. That Chapter

permits individual debtors to develop a plan to repay all or

a portion of their debts over a period of time specified in

the plan. See Nobelman v. American Savings Bank, 508

U. S. 324, 327 (1993); see also §§301(a), 1321; Fed. Rule

Bkrtcy. Proc. 3015(b). A proposed bankruptcy plan be­

comes effective upon confirmation, see §§1324, 1325, and

will result in a discharge of the debts listed in the plan if

the debtor completes the payments the plan requires, see

§1328(a).

Espinosa’s plan listed his student loan debt as his only

specific indebtedness. App. 15–18. The plan proposed to

repay only the principal on that debt, stating that the

remainder—the accrued interest—would be discharged

once Espinosa repaid the principal. Id., at 26.

As the Federal Rules of Bankruptcy Procedure require,

the clerk of the Bankruptcy Court mailed notice and a

copy of Espinosa’s plan to petitioner United Student Aid

Funds, Inc. (United), the creditor to whom Espinosa owed

the student loan debt.1 Id., at 34; see Rules 2002(b), (g)(2),

3015(d). In boldface type immediately below the caption,

——————

1 United

is a guaranty agency that administers the collection of feder­

ally guaranteed student loans in accordance with regulations promul­

gated by the United States Department of Education. See, e.g., 34 CFR

§682.200 et seq. (2009).

Cite as: 559 U. S. ____ (2010) 3

Opinion of the Court

the plan stated: “WARNING IF YOU ARE A CREDITOR

YOUR RIGHTS MAY BE IMPAIRED BY THIS PLAN.”

Id., at 23. The plan also noted the deadlines for filing a

proof of claim or an objection to the plan. Id., at 26–27.

United received this notice and, in response, filed a

proof of claim for $17,832.15, an amount representing both

the principal and the accrued interest on Espinosa’s stu­

dent loans. Id., at 35. United did not object to the plan’s

proposed discharge of Espinosa’s student loan interest

without a determination of undue hardship, nor did it

object to Espinosa’s failure to initiate an adversary pro­

ceeding to determine the dischargeability of that debt.

In May 1993, the Bankruptcy Court confirmed

Espinosa’s plan without holding an adversary proceeding

or making a finding of undue hardship. One month later,

the Chapter 13 trustee mailed United a form notice stat­

ing that “[t]he amount of the claim filed differs from the

amount listed for payment in the plan” and that “[y]our

claim will be paid as listed in the plan.” Id., at 44. The

form also apprised United that if United “wishe[d] to

dispute the above stated treatment of the claim,” it had

the “responsibility” to notify the trustee within 30 days.

Ibid. United did not respond to that notice.

In May 1997, Espinosa completed the payments on his

student loan principal, as required by the plan. Shortly

thereafter, the Bankruptcy Court discharged Espinosa’s

student loan interest.2

In 2000, the United States Department of Education

commenced efforts to collect the unpaid interest on Espi­

nosa’s student loans.3 In response, Espinosa filed a mo­

——————

2 The discharge order contained an apparent clerical error that the

courts below considered and addressed in adjudicating these proceed­

ings. See n. 4, infra.

3 After Espinosa completed payments under the plan, United as­

signed Espinosa’s loans to the Department under a reinsurance agree­

ment. After these proceedings began, United requested and received a

4 UNITED STUDENT AID FUNDS, INC. v. ESPINOSA

Opinion of the Court

tion in 2003 asking the Bankruptcy Court to enforce its

1997 discharge order by directing the Department and

United to cease all efforts to collect the unpaid interest on

his student loan debt.

United opposed that motion and filed a cross-motion

under Federal Rule of Civil Procedure 60(b)(4) seeking to

set aside as void the Bankruptcy Court’s 1993 order con­

firming Espinosa’s plan. United made two arguments in

support of its motion. First, United claimed that the

provision of Espinosa’s plan authorizing the discharge of

his student loan interest was inconsistent with the Code,

which requires a court to find undue hardship before

discharging a student loan debt, §§523(a)(8), 1328(a), and

with the Bankruptcy Rules, which require the court to

make the undue hardship finding in an adversary proceed­

ing, see Rule 7001(6). Second, United argued that its due

process rights had been violated because Espinosa failed

to serve it with the summons and complaint the Bank­

ruptcy Rules require as a prerequisite to an adversarial

proceeding. See Rules 7003, 7004, 7008.

The Bankruptcy Court rejected both arguments, granted

Espinosa’s motion in relevant part, denied United’s cross­

motion, and ordered all claimants to cease and desist their

collection efforts. United sought review in the District

Court, which reversed. That court held that United was

denied due process because the confirmation order was

issued without service of the summons and complaint the

Bankruptcy Rules require.

Espinosa appealed to the Court of Appeals for the Ninth

Circuit, which issued an initial per curiam opinion re­

manding the case to the Bankruptcy Court to consider

correcting an apparent clerical error in its discharge or­

der.4 530 F. 3d 895, 899 (2008). The Bankruptcy Court

——————

recall of the loans from the Department. App. to Pet. for Cert. 63.

4 The one-page discharge order contained a paragraph that purported

Cite as: 559 U. S. ____ (2010) 5

Opinion of the Court

corrected the error, after which the Court of Appeals

resubmitted the case and reversed the judgment of the

District Court. The Court of Appeals concluded that by

confirming Espinosa’s plan without first finding undue

hardship in an adversary proceeding, the Bankruptcy

Court at most committed a legal error that United might

have successfully appealed, but that any such legal error

was not a basis for setting aside the confirmation order as

void under Rule 60(b). 553 F. 3d 1193, 1198–1202 (2008).5

In addition, the Court of Appeals held that although

Espinosa’s failure to serve United with a summons and

complaint before seeking a discharge of his student loan

debt violated the Bankruptcy Rules, this defect in service

was not a basis upon which to declare the judgment void

because United received actual notice of Espinosa’s plan

——————

to exclude “ ‘any debt . . . for a student loan’ ” from the discharge. 530

F. 3d 895, 896 (CA9 2008). That provision appeared irreconcilable with

the confirmation order, which contemplated the discharge of the inter­

est on Espinosa’s student loan debt. Suggesting that the Bankruptcy

Court may have automatically generated the discharge order without

tailoring it to the terms of the confirmation order, the Court of Appeals

remanded the case to the Bankruptcy Court to consider amending the

discharge order to conform to the confirmation order. Id., at 899; see

Fed. Rule Civ. Proc. 60(a) (authorizing a court to “correct a clerical

mistake or a mistake arising from oversight or omission”). On remand,

the Bankruptcy Court found that the text of its discharge order except­

ing Espinosa’s student loan debt from discharge “was inserted because

of a clerical mistake” and struck that language from the order. App. 48.

Although certain amici press the point, United has not challenged

the substance of the Bankruptcy Court’s amendment to the order or

asked us to consider whether such amendment was proper under Rule

60(a). See Brief for Petitioner 42; Reply Brief for Petitioner 20. Thus,

we express no view on those issues. See Kamen v. Kemper Financial

Services, Inc., 500 U. S. 90, 97, n. 4 (1991) (noting that “we do not

ordinarily address issues raised only by amici”).

5 In so doing, the Court of Appeals disagreed with two other Courts of

Appeals. See In re Mersmann, 505 F. 3d 1033, 1047–1049 (CA10 2007)

(en banc); Whelton v. Educational Credit Management Corp., 432 F. 3d

150, 154 (CA2 2005).

6 UNITED STUDENT AID FUNDS, INC. v. ESPINOSA

Opinion of the Court

and failed to object. See id., at 1202–1205.6

We granted certiorari. 557 U. S. ___ (2009).

II

A discharge under Chapter 13 “is broader than the

discharge received in any other chapter.” 8 Collier on

Bankruptcy ¶1328.01, p. 1328–5 (rev. 15th ed. 2008).

Chapter 13 nevertheless restricts or prohibits entirely the

discharge of certain types of debts. As relevant here,

§1328(a) provides that when a debtor has completed the

repayments required by a confirmed plan, a bankruptcy

court “shall grant the debtor a discharge of all debts pro­

vided for by the plan or disallowed under section 502 of

this title, except,” inter alia, “any debt . . . of the kind

specified in [§523(a)(8)].” §1328(a)(2). Section 523(a)(8),

in turn, specifies certain student loan debts “unless ex­

cepting such debt from discharge . . . would impose an

undue hardship on the debtor and the debtor’s depend­

ents.”7 As noted, the Bankruptcy Rules require a party

——————

6 Three Courts of Appeals have reached the opposite conclusion on

similar facts. See In re Ruehle, 412 F. 3d 679, 682–684 (CA6 2005);

In re Hanson, 397 F. 3d 482, 486 (CA7 2005); In re Banks, 299 F. 3d

296, 302–303 (CA4 2002).

7 Section 523 provides:

“(a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b)

of this title does not discharge an individual debtor from any debt—

. . . . .

“(8) unless excepting such debt from discharge under this paragraph

would impose an undue hardship on the debtor and the debtor’s de­

pendents, for—

“(A)(i) an educational benefit overpayment or loan made, insured, or

guaranteed by a governmental unit, or made under any program

funded in whole or in part by a governmental unit or nonprofit institu­

tion; or

“(ii) an obligation to repay funds received as an educational benefit,

scholarship, or stipend; or

“(B) any other educational loan that is a qualified education loan, as

defined in section 221(d)(1) of the Internal Revenue Code of 1986,

Cite as: 559 U. S. ____ (2010) 7

Opinion of the Court

seeking to determine the dischargeability of a student loan

debt to commence an adversary proceeding by serving a

summons and complaint on affected creditors. See supra,

at 4. We must decide whether the Bankruptcy Court’s

order confirming Espinosa’s plan is “void” under Federal

Rule Civil Procedure 60(b)(4) because the Bankruptcy

Court confirmed the plan without complying with these

requirements.8

A

The Bankruptcy Court’s order confirming Espinosa’s

proposed plan was a final judgment, see In re Optical

Technologies, Inc., 425 F. 3d 1294, 1300 (CA11 2005), from

which United did not appeal. Ordinarily, “the finality of

[a] Bankruptcy Court’s orders following the conclusion of

direct review” would “stan[d] in the way of challenging

[their] enforceability.” Travelers Indemnity Co. v. Bailey,

557 U. S. ___, ___ (2009) (slip op., at 1–2). Rule 60(b),

however, provides an “exception to finality,” Gonzalez v.

Crosby, 545 U. S. 524, 529 (2005), that “allows a party to

seek relief from a final judgment, and request reopening of

his case, under a limited set of circumstances,” id., at 528.

Specifically, Rule 60(b)(4)—the provision under which

United brought this motion—authorizes the court to re­

lieve a party from a final judgment if “the judgment is

void.” 9

——————

incurred by a debtor who is an individual.”

8 Because United brought this action on a motion for relief from judg­

ment under Rule 60(b)(4), our holding is confined to that provision. We

express no view on the terms upon which other provisions of the Bank­

ruptcy Rules may entitle a debtor or creditor to postjudgment relief.

9 Subject to certain exceptions, Bankruptcy Rule 9024 makes Rule

60(b) applicable to Chapter 13 proceedings. One such exception pro­

vides that “a complaint to revoke an order confirming a plan may be

filed only within the time allowed by” 11 U. S. C. §1330. Fed.

Rule Bkrtcy. Proc. 9024. Section 1330(a) imposes a 180-day time limit

for a party to seek revocation of a confirmation order “procured by

8 UNITED STUDENT AID FUNDS, INC. v. ESPINOSA

Opinion of the Court

A void judgment is a legal nullity. See Black’s Law

Dictionary 1822 (3d ed. 1933); see also id., at 1709 (9th ed.

2009). Although the term “void” describes a result, rather

than the conditions that render a judgment unenforceable,

it suffices to say that a void judgment is one so affected by

a fundamental infirmity that the infirmity may be raised

even after the judgment becomes final. See Restatement

(Second) of Judgments 22 (1980); see generally id., §12.

The list of such infirmities is exceedingly short; otherwise,

Rule 60(b)(4)’s exception to finality would swallow the

rule.

“A judgment is not void,” for example, “simply because it

is or may have been erroneous.” Hoult v. Hoult, 57 F. 3d

1, 6 (CA1 1995); 12 J. Moore et al., Moore’s Federal Prac­

tice §60.44[1][a], pp. 60–150 to 60–151 (3d ed. 2007) (here­

inafter Moore’s). Similarly, a motion under Rule 60(b)(4)

is not a substitute for a timely appeal. Kocher v. Dow

Chemical Co., 132 F. 3d 1225, 1229 (CA8 1997); see

Moore’s §60.44[1][a], at 60–150. Instead, Rule 60(b)(4)

applies only in the rare instance where a judgment is

premised either on a certain type of jurisdictional error or

on a violation of due process that deprives a party of notice

or the opportunity to be heard. See United States v. Boch

Oldsmobile, Inc., 909 F. 2d 657, 661 (CA1 1990); Moore’s

——————

fraud.” Courts of Appeals disagree as to whether a Rule 60(b)(4)

motion should be treated as a “complaint to revoke” a plan subject to

§1330’s time limit and substantive limitation to motions based on

fraud. Compare Whelton, 432 F. 3d, at 156, n. 2, with In re Fesq, 153

F. 3d 113, 119, and n. 8 (CA3 1998). We need not settle that question,

however, because the parties did not raise it in the courts below. And

even under a theory that would treat United’s Rule 60(b)(4) motion as a

“complaint to revoke” the plan, United’s failure to file its motion within

§1330(a)’s 180-day deadline and its failure to seek relief on the basis of

fraud did not deprive those courts—and does not deprive us—of author­

ity to consider the motion on the merits because those limitations are

not jurisdictional. See Arbaugh v. Y & H Corp., 546 U. S. 500, 515–516

(2006); Reed Elsevier, Inc. v. Muchnick, ante, at 12–13.

Cite as: 559 U. S. ____ (2010) 9

Opinion of the Court

§60.44[1][a]; 11 C. Wright, A. Miller, & M. Kane, Federal

Practice & Procedure §2862, p. 331 (2d ed. 1995 and Supp.

2009); cf. Chicot County Drainage Dist. v. Baxter State

Bank, 308 U. S. 371, 376 (1940); Stoll v. Gottlieb, 305 U. S.

165, 171–172 (1938). The error United alleges falls in

neither category.

1

Federal courts considering Rule 60(b)(4) motions that

assert a judgment is void because of a jurisdictional defect

generally have reserved relief only for the exceptional case

in which the court that rendered judgment lacked even an

“arguable basis” for jurisdiction. Nemaizer v. Baker, 793

F. 2d 58, 65 (CA2 1986); see, e.g., Boch Oldsmobile, supra,

at 661–662 (“[T]otal want of jurisdiction must be distin­

guished from an error in the exercise of jurisdiction, and

. . . only rare instances of a clear usurpation of power will

render a judgment void” (brackets and internal quotation

marks omitted)).

This case presents no occasion to engage in such an

“arguable basis” inquiry or to define the precise circum­

stances in which a jurisdictional error will render a judg­

ment void because United does not argue that the Bank­

ruptcy Court’s error was jurisdictional. Reply Brief for

Petitioner 5, 11. Such an argument would fail in any

event. First, §523(a)(8)’s statutory requirement that a

bankruptcy court find undue hardship before discharging

a student loan debt is a precondition to obtaining a dis­

charge order, not a limitation on the bankruptcy court’s

jurisdiction. See, e.g., Arbaugh v. Y & H Corp., 546 U. S.

500, 515–516 (2006). Second, the requirement that a

bankruptcy court make this finding in an adversary pro­

ceeding derives from the Bankruptcy Rules, see Rule Proc.

7001(6), which are “procedural rules adopted by the Court

for the orderly transaction of its business” that are “not

jurisdictional.” Kontrick v. Ryan, 540 U. S. 443, 454

10 UNITED STUDENT AID FUNDS, INC. v. ESPINOSA

Opinion of the Court

(2004) (internal quotation marks omitted).

2

Although United concedes that the Bankruptcy Court

had jurisdiction to enter the order confirming Espinosa’s

plan, United contends that the court’s judgment is void

under Rule 60(b)(4) because United did not receive ade­

quate notice of Espinosa’s proposed discharge of his stu­

dent loan interest. Specifically, United argues that the

Bankruptcy Court violated United’s due process rights by

confirming Espinosa’s plan despite Espinosa’s failure to

serve the summons and complaint the Bankruptcy Rules

require for the commencement of an adversary proceeding.

We disagree.

Espinosa’s failure to serve United with a summons

and complaint deprived United of a right granted by a

procedural rule. See Fed. Rule Bkrtcy. Proc. 7004(b)(3).

United could have timely objected to this deprivation and

appealed from an adverse ruling on its objection. But this

deprivation did not amount to a violation of United’s

constitutional right to due process. Due process requires

notice “reasonably calculated, under all the circumstances,

to apprise interested parties of the pendency of the action

and afford them an opportunity to present their objec­

tions.” Mullane v. Central Hanover Bank & Trust Co., 339

U. S. 306, 314 (1950); see also Jones v. Flowers, 547 U. S.

220, 225 (2006) (“[D]ue process does not require actual

notice . . .”). Here, United received actual notice of the

filing and contents of Espinosa’s plan. This more than

satisfied United’s due process rights. Accordingly, on

these facts, Espinosa’s failure to serve a summons and

complaint does not entitle United to relief under Rule

60(b)(4).

B

Unable to demonstrate a jurisdictional error or a due

Cite as: 559 U. S. ____ (2010) 11

Opinion of the Court

process violation, United and the Government, as amicus,

urge us to expand the universe of judgment defects that

support Rule 60(b)(4) relief. Specifically, they contend

that the Bankruptcy Court’s confirmation order is void

because the court lacked statutory authority to confirm

Espinosa’s plan absent a finding of undue hardship. In

support of this contention, they cite the text of §523(a)(8),

which provides that student loan debts guaranteed by

governmental units are not dischargeable “unless” a court

finds undue hardship. 11 U. S. C. §523(a)(8) (emphasis

added). They argue that this language imposes a “ ‘self­

executing’ limitation on the effect of a discharge order”

that renders the order legally unenforceable, and thus

void, if it is not satisfied. Brief for Petitioner 23–24; Brief

for United States as Amicus Curiae 18 (quoting Tennessee

Student Assistance Corporation v. Hood, 541 U. S. 440,

450 (2004)). In addition, United cites §1325(a)(1), which

instructs bankruptcy courts to confirm only those plans

that comply with “the . . . applicable provisions” of the

Code. Reading these provisions in tandem, United argues

that an order confirming a plan that purports to discharge

a student loan debt without an undue hardship finding is

“doubly beyond the court’s authority and therefore void.”

Brief for Petitioner 13.

We are not persuaded that a failure to find undue hard­

ship in accordance with §523(a)(8) is on par with the

jurisdictional and notice failings that define void judg­

ments that qualify for relief under Rule 60(b)(4). As

noted, §523(a)(8) does not limit the bankruptcy court’s

jurisdiction over student loan debts.10 Supra, at 9–10; see

——————

10 Sections 1328(a) and 523(a)(8) provide that student loan debt is

dischargeable in a Chapter 13 proceeding if a court makes a finding of

undue hardship. In contrast, other provisions in Chapter 13 provide

that certain other debts are not dischargeable under any circumstances.

See, e.g., §§523(a)(1)(B), (C) (specified tax debts); §523(a)(5) (domestic

support obligations); §523(a)(9) (debts “caused by” the debtor’s unlawful

12 UNITED STUDENT AID FUNDS, INC. v. ESPINOSA

Opinion of the Court

Hood, 541 U. S., at 447 (noting that “[b]ankruptcy courts

have exclusive jurisdiction over a debtor’s property”). Nor

does the provision impose requirements that, if violated,

would result in a denial of due process. Instead, §523(a)(8)

requires a court to make a certain finding before confirm­

ing the discharge of a student loan debt. It is true, as we

explained in Hood, that this requirement is “ ‘self­

executing.’ ” Id., at 450.11 But that means only that the

——————

operation of a vehicle while intoxicated). We express no view on the

conditions under which an order confirming the discharge of one of

these types of debt could be set aside as void.

11 The Government suggests that §523(a)(8)’s “self-executing” nature

derives in part from the text of §523(a), which states that “[a] discharge

under section 727 . . . or 1328(b) of this title does not discharge an

individual debtor from any debt,” including the student loan debts

specified in paragraph (8) (emphasis added); see Brief for United States

as Amicus Curiae 18; see also Reply Brief for Petitioner 1–2. That is

not what we concluded in Hood and, in this case, would be irrelevant in

any event.

In Hood, we described as “ ‘self-executing’ ” paragraph (8)’s instruc­

tion that student loan debt not be discharged “unless” an undue hard­

ship determination is made. 541 U. S., at 450. The “does not dis­

charge” language in §523(a), which applies generally to every

enumerated paragraph in that section—and to which we never referred

in Hood—was not relevant to our analysis. That is evident from the

authority we cited to support our description of §523(a)(8)’s condition as

“ ‘self-executing.’ ” E.g., id., at 450 (citing S. Rep. No. 95–989, p. 79

(1978), which states that “[p]aragraph (8) . . . is intended to be self­

executing” insofar as “the lender or institution is not required to file a

complaint to determine the nondischargeability of any student loan”

(emphasis added)).

In any event, the “does not discharge” language in §523(a) is inappli­

cable to this case. Section 523(a) provides that “[a] discharge under

section 727, 1141, 1228(a), 1228(b), or 1328(b) of [the Code] does not

discharge an individual debtor from” the debts described in §523(a)’s

enumerated paragraphs. But Espinosa did not seek a discharge under

“sections 727, 1141, 1228(a), 1228(b), or 1328(b).” He sought a dis­

charge under §1328(a), which provides that, upon completion of a

Chapter 13 plan, a bankruptcy court “shall grant the debtor a discharge

of all debts provided for by the plan . . . , except any debt . . . of the kind

specified in . . . paragraph . . . (5), (8), or (9) of section 523(a).” (Empha­

Cite as: 559 U. S. ____ (2010) 13

Opinion of the Court

bankruptcy court must make an undue hardship finding

even if the creditor does not request one; it does not mean

that a bankruptcy court’s failure to make the finding

renders its subsequent confirmation order void for pur­

poses of Rule 60(b)(4).12

Given the Code’s clear and self-executing requirement

for an undue hardship determination, the Bankruptcy

Court’s failure to find undue hardship before confirming

Espinosa’s plan was a legal error. See Part III, infra. But

the order remains enforceable and binding on United

because United had notice of the error and failed to object

or timely appeal.

United’s response—that it had no obligation to object to

Espinosa’s plan until Espinosa served it with the sum­

mons and complaint the Bankruptcy Rules require, Brief

for Petitioner 33—is unavailing. Rule 60(b)(4) does not

provide a license for litigants to sleep on their rights.

United had actual notice of the filing of Espinosa’s plan,

its contents, and the Bankruptcy Court’s subsequent

confirmation of the plan. In addition, United filed a proof

of claim regarding Espinosa’s student loan debt, thereby

submitting itself to the Bankruptcy Court’s jurisdiction

with respect to that claim. See Langenkamp v. Culp, 498

U. S. 42, 44 (1990) (per curiam). United therefore forfeited

its arguments regarding the validity of service or the

——————

sis added). Section 1328(a) thus incorporates by reference paragraph

(8) of §523(a), including that paragraph’s self-executing requirement for

an undue hardship determination, but does not incorporate the “does

not discharge” text of §523(a) itself.

12 United relies on our decisions in United States ex rel. Wilson v.

Walker, 109 U. S. 258 (1883), and Vallely v. Northern Fire & Marine

Ins. Co., 254 U. S. 348 (1920), to argue otherwise. Those authorities

are not controlling because they predate Rule 60(b)(4)’s enactment and

because we interpreted the statutes at issue in those cases as stripping

courts of jurisdiction—either over the parties, id., at 354–356, or the

res, Wilson, supra, at 265–266—and United concedes that the statutory

limit in this case is not jurisdictional. See supra, at 9.

14 UNITED STUDENT AID FUNDS, INC. v. ESPINOSA

Opinion of the Court

adequacy of the Bankruptcy Court’s procedures by failing

to raise a timely objection in that court.

Rule 60(b)(4) strikes a balance between the need for

finality of judgments and the importance of ensuring that

litigants have a full and fair opportunity to litigate a

dispute. Where, as here, a party is notified of a plan’s

contents and fails to object to confirmation of the plan

before the time for appeal expires, that party has been

afforded a full and fair opportunity to litigate, and the

party’s failure to avail itself of that opportunity will not

justify Rule 60(b)(4) relief. We thus agree with the Court

of Appeals that the Bankruptcy Court’s confirmation order

is not void.

III

In issuing its judgment, however, the Court of Appeals

looked beyond the narrow question whether the Bank­

ruptcy Court’s order confirming Espinosa’s plan was void

under Rule 60(b)(4). It canvassed other bankruptcy court

decisions within the Circuit that presented a different

question—whether a bankruptcy court presented with a

debtor’s plan that proposes to discharge a student loan

debt, in the absence of an adversary proceeding to deter­

mine undue hardship, should confirm the plan despite its

failure to comply with the Code and Rules. The Court of

Appeals noted that some Bankruptcy Courts had declined

to confirm such plans “even when the creditor fail[ed] to

object to the plan.” 553 F. 3d, at 1205. The court disap­

proved that practice and overruled those cases, stating

that bankruptcy courts must confirm a plan proposing the

discharge of a student loan debt without a determination

of undue hardship in an adversary proceeding unless the

creditor timely raises a specific objection. Ibid. This, we

think, was a step too far.

As Espinosa concedes, Tr. of Oral Arg. 31, 36, a Chapter

13 plan that proposes to discharge a student loan debt

Cite as: 559 U. S. ____ (2010) 15

Opinion of the Court

without a determination of undue hardship violates

§§1328(a)(2) and 523(a)(8). Failure to comply with this

self-executing requirement should prevent confirmation of

the plan even if the creditor fails to object, or to appear in

the proceeding at all. See Hood, 541 U. S., at 450.13 That

is because §1325(a) instructs a bankruptcy court to con­

firm a plan only if the court finds, inter alia, that the plan

complies with the “applicable provisions” of the Code.

§1325(a) (providing that a bankruptcy court “shall confirm

a plan” if the plan “complies with the provisions of” Chap­

ter 13 and with “other applicable provisions of this title”);

see Johnson v. Home State Bank, 501 U. S. 78, 87 (1991);

see also §105(a) (authorizing bankruptcy courts to issue

“any order, process, or judgment that is necessary or

appropriate to carry out” the Code’s provisions).14 Thus,

contrary to the Court of Appeals’ assertion, the Code

makes plain that bankruptcy courts have the authority—

indeed, the obligation—to direct a debtor to conform his

——————

13 This is essential to preserve the distinction between Congress’

treatment of student loan debts in §523(a)(8) and debts listed elsewhere

in §523. Section 523(a)(8) renders student loan debt presumptively

nondischargeable “unless” a determination of undue hardship is made.

In contrast, the debts listed in §523(c), which include certain debts

obtained by fraud or “willful and malicious injury by the debtor,”

§523(a)(6), are presumptively dischargeable “unless” the creditor

requests a hearing to determine the debt’s dischargeability. The Court

of Appeals’ approach would subject student loan debt to the same rules

as the debts specified in §523(c), notwithstanding the evident differ­

ences in the statutory framework for discharging the two types of debt.

14 In other contexts, we have held that courts have the discretion, but

not the obligation, to raise on their own initiative certain nonjurisdic­

tional barriers to suit. See Day v. McDonough, 547 U. S. 198, 202, 209

(2006) (statute of limitations); Granberry v. Greer, 481 U. S. 129, 134

(1987) (habeas corpus petitioner’s exhaustion of state remedies).

Section 1325(a) does more than codify this principle; it requires bank­

ruptcy courts to address and correct a defect in a debtor’s proposed plan

even if no creditor raises the issue.

16 UNITED STUDENT AID FUNDS, INC. v. ESPINOSA

Opinion of the Court

plan to the requirements of §§1328(a)(2) and 523(a)(8).15

We are mindful that conserving assets is an important

concern in a bankruptcy proceeding. We thus assume

that, in some cases, a debtor and creditor may agree that

payment of a student loan debt will cause the debtor an

undue hardship sufficient to justify discharge. In such a

case, there is no reason that compliance with the undue

hardship requirement should impose significant costs on

the parties or materially delay confirmation of the plan.

Neither the Code nor the Rules prevent the parties from

stipulating to the underlying facts of undue hardship, and

neither prevents the creditor from waiving service of a

summons and complaint. See Fed. Rule Bkrtcy. Proc.

7004; Fed. Rule Civ. Proc. 4(k). But, to comply with

§523(a)(8)’s directive, the bankruptcy court must make an

independent determination of undue hardship before a

plan is confirmed, even if the creditor fails to object or

appear in the adversary proceeding. See supra, at 12.

IV

United argues that our failure to declare the Bank­

ruptcy Court’s order void will encourage unscrupulous

debtors to abuse the Chapter 13 process by filing plans

proposing to dispense with the undue hardship require­

ment in the hopes the bankruptcy court will overlook the

proposal and the creditor will not object. In the event the

objectionable provision is discovered, United claims, the

debtor can withdraw the plan and file another without

penalty.

We acknowledge the potential for bad-faith litigation

tactics. But expanding the availability of relief under Rule

——————

15 Bankruptcy courts appear to be well aware of this statutory obliga­

tion. See, e.g., In re Mammel, 221 B. R. 238, 239 (Bkrtcy. Ct. ND Iowa

1998) (“[W]hether or not an objection is presently lodged in this case,

the Court retains the authority to review this plan and deny confirma­

tion if it fails to comply with the confirmation standards of the Code”).

Cite as: 559 U. S. ____ (2010) 17

Opinion of the Court

60(b)(4) is not an appropriate prophylaxis. As we stated in

Taylor v. Freeland & Kronz, 503 U. S. 638 (1992),

“[d]ebtors and their attorneys face penalties under various

provisions for engaging in improper conduct in bankruptcy

proceedings,” id., at 644; see Fed. Rule Bkrtcy. Proc. 9011.

The specter of such penalties should deter bad-faith at­

tempts to discharge student loan debt without the undue

hardship finding Congress required. And to the extent

existing sanctions prove inadequate to this task, Congress

may enact additional provisions to address the difficulties

United predicts will follow our decision.

* * *

The judgment of the Court of Appeals for the Ninth

Circuit is affirmed.

It is so ordered.