Amicus Curiae Brief — Bullard v. Hyde Park Savings Bank, 135 S. Ct. 781 (2014) (No. 14-116)

No. 14-116

——— eee

Yn the Supreme Court of the United States

LOUIS B. BULLARD, PETITIONER

Vv.

BLUE HILLS BANK, FKA

HYDE PARK SAVINGS BANK

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

BRIEF FOR THE UNITED STATES

AS AMICUS CURIAE SUPPORTING PETITIONER

DONALD B. VERRILLI, JR.

Solicitor General

Counsel of Record

JOYCE R. BRANDA

Acting Assistant Attorney

General

MALCOLM L. STEWART

Deputy Solicitor General

ZACHARY D. TRIPP

RAMONA D. ELLIOTT

Deputy Director/General

ounsel Assistant to the Solicitor

P. MATTHEW SUTKO Ge

Associate General Counsel MICHAEL S. RAAB

WENDY Cox KAREN SCHOEN

JOHN POSTULKA Attorneys

Attorneys Department of Justice

Executive Office for United Washington, D.C. 20530-0001

States Trustees SupremeCtBriefs@usdoj.gov

Washington, D.C. 20530

(202) 514-2217

——______—

QUESTION PRESENTED

Whether an order denying confirmation of a pro-

posed Chapter 13 bankruptcy plan is a final order that

is appealable as of right.

(1)

TABLE OF CONTENTS

Page

Interest of the United States ................cccccccscsessosssseesesesesssesreeses 1

TE 2

Br I isiccscneesnemisinneniesiepinietinginteteennenitetinnmnsias 9

Argument:

An order denying confirmation of a Chapter 13 plan

is a final order that is appealable as of right........................ 12

A. A bankruptcy-court order is final if it conclusively

terminates a discrete proceeding within a

B. An order conclusively resolving all objections to

confirmation of a Chapter 13 plan finally terminates

a discrete proceeding, regardless of that proceeding’s

GUBTD cesssccssssecssssccnassesessenssansssmnsssennssssensecbesssnsumamensnessets 19

C. The relevant “proceeding” in this case is the specific

contested matter that respondent initiated to

challenge petitioner’s Third Amended Plan. ................. 23

Ie ceinnencsesipnindtnentemetneeieetinennnmatienhniin 34

TABLE OF AUTHORITIES

Cases:

A&F Enters., Inc. II, In re, 742 F.3d 763

SN ccna ce eneatlainenieeaa tinct asciadineatibal 28

American Reserve Corp., In re, 840 F 2d 487

SN TE heninretsrentncsinmniiennseneiemmenaieemmtatietnterntatn 16

Catlin v. United States, 324 U.S. 229 (1945).............ceccceceee 13

Connecticut Nat'l Bank v. Germain, 503 U.S. 249

ITI ccecorecmashistessnoeteeenieeatnaeanedlibbeniesiiiediditidenduieatiastunmegseenionmantal 4

Cox Broad. Corp. v. Cohn, 420 U.S. 469 (1975) .................- 14

England, In re, 975 F.2d 1168 (5th Cir. 1992) 0.0.0... 19

Executive Benefits Ins. Agency v. Arkinson,

A ee een 16

Cases—Continued: Page

Gelboim v. Bank of Am. Corp., No. 13-1174 (Jan. 21,

Ee 13

Gentry v. Siegel, 668 F 3d 83 (4th Cir. 2012) ....................-.. 16

Howard Delivery Serv., Inc. v. Zurich Am. Ins. Co.,

gL eee 12, 14,17

James Wilson Assocs., In re, 965 F 2d 160 (7th Cir.

ee 17

John Hancock Mut. Life Ins. Co. v. Route 37 Busi-

ness Park Asaocs., 987 F 2d 154 (3d Cir. 1993).............. 32

Lindsey, In re, 726 F.3d 857 (6th Cir. 2013)............ 12, 13, 25

Lopez, In re, 446 B.R. 12 (Bankr. D. Mass. 2011)............... 32

Maiorino v. Branford Sav. Bank, 691 F.2d 89 (2d

8 ee dcpdinbaaidiidaatinmpimpanamniiie 26

Marshall vy. Marshall, 547 U.S. 293 (2006).................... 17, 18

Marvel Entm't Grp., Inc., In re, 140 F.3d 463 (3d Cir.

SUIT ccentoinsnstnnitnitinsienieierdaticnsiideniianintniediaiansiehiiniannsiieeniemennemiete 19

McGregor, In re, 172 B.R. 718 (Bankr. D. Mass.

i aeteseeponndaniatheanmnmbatsesniaaiemmmmenntenteetemmaeaieiiatS 5

Mohawk Indus., Inc. v. Carpenter, 558 U.S. 100

Ti icireceneantenepetnsensercinteinignsstemsventisietentetmmemmemneen 13, 19

Mort Ranta v. Gorman, 721 F.3d 241 (4th Cir.

SE acinresmnsnnnninsinassiccienunineniuniiitnianiinenimionummmnntit 29, 31

Northwood Props., LLC, In re, 509 F.3d 15 (1st Cir.

ITT each cearinataieelnateiedetieatthesiabateaeen alan aca ita inaaianteciaiaen 18

Pal Family Trust v. Ticor Tit. Inc., 490 B.R. 480

8 ee oe ee 26

Riggsby, In re, 745 F.2d 1153 (7th Cir. 1984)...................... 18

Saco Local Dev. Corp., In re, 711 F.2d 441 (1st Cir.

i crsnniencasnsennnnnepcunusammenmmessinininesninainmaiaimaa 12, 18, 19

Sears, Roebuck & Co. v. Mackey, 351 U.S. 427 (1956) ....... 13

Skipworth, In re, 69 B.R. 526 (Bankr. E.D. Pa. 1987)........ 32

Swint v. Chambers Cnty. Comm'n, 514 U.S. 35 (1995) ......14

Cases—Continued: Page

United States v. Wallace & Tiernan Co., 336 U.S.

Laren ee St nO 26

United Student Aid Funds, Inc. v. Espinosa,

a cl 10, 20

Watson, In re, 309 B.R. 652 (ist Cir. B.A.P. 2004),

aff'd, 4038 F.3d 1 (1st Cir. 2006) ...........ccccccsccscseesessceencseseeses 6

Weber v. United States Trustee, 484 F.3d 154

Ree ees vee ee 31

Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7

ac ciaateietintatecaentaa tia lal cela deceit ica ia menmanil 28

Woolsey, In re, 696 F.3d 1266 (10th Cir. 2012)................02.. 20

Statutes and rules:

Bankruptcy Code, 11 U.S.C. 101 et seq.:

Ser TTITIITETEL IIT iorrinisnigenccrtdniaenanecnpantrneeimnmmmnnnpenseanenaiimuatieienis 2

etre nncnnseemenicnniemmmnmnnmenate 29

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I asec eerenimeeneeninemta tinea nents 2

8 ER neo San EC On l

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BE Ti orissincrestetreninteicancnteniasiniataiascidestesbiedieneteteesieateeiiatl 2

DO IT ITE inno cerercrnptesenreetcceieaieniistteetataieneenaieanetdnaamendll 26

KR EE SS eee eer semen ore 20

oh Fen rens meneermnenane cere? 2, 26

EERE ese mecca e ee wed nie SST BNP 2

8 EERE eraene neste Seen Saw Word 7

Niel Es Hee. 7

BS CBAs. SIGNS cnsnnesenscsnssnsasscossmmenegemnrenensenmmnsnan 2, 18, 20

VI

Statutes and rules—Continued: Page

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BE CE Ce OD ceccnsccccnsennsscenesesacassseicsminsiisiiints 7

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ee Cy BRIE cieciriecsinestionessensssocnsnmicossnensininnanmininiinniinti 20

Fis A ciensiecscsesnpenennsnciiienenenssccnsinennmansiniieniaatiniassian 15, 16

Be Pes. SEINE atnlinnserenesininnicinoncipeniccscenintipisteinnsnnnmnninmiinibiniie 3

ts SI icescincanriptiinntnitennanentnnndeinssieniiiiasinsitiieneniniainilinsiiins 16

a es eitctansiecenntcnnccvecvcsnsctcnsiianiaiiiiitiniiiaisaniaiiinittias 9, 16

a ey TI as icrinssssenntipnencipiicntiininasiineidinaiteniinsaiiastudiiinin 16

Se els TTT nsisniasaionesinnisiadanianenciniinineiticiniaiiinitnieiiine 16

Be i ST cccssctetncerictittesscetimneinatininnsnnebinisitiiiinbiaeuialiae 16

Be es STUD acstrnicsisccnrinciamsnenrionnnisisitinsadineiis 9, 16, 21

ee ay Ce cia setinicsrsicininciitininsenictinenintniiiaiamiidaiidanisiiliiaiaiias 3

ee SE ccctrnicaniteresiesseninnistercctimnianannianinininitninseiia 3, 11,15

ls CR nienennccnccnsesscensccinnniniiinsinnsiiiaindeinitinitinn passim

es Ce iceiiaiectinniesesiniantiintenntiinininiiajatieaiis 3, 25, 30, 31

elie Se recsitscticivininantennssiitnininnsinininnninanicmisintnusasiaiel 3, 22

is I a isccnicitncnsnicitigiitaiaseilintiiindaiaiaduasintivaniiiitaniiiiiiiitatiin 3

a eeies NID ccisecesctiteisiiisinieesiiitiaearniinieliniiinaiaiinabitiags 3

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es BE sitatiiiientinniseciiinisienesainieiniebiiiniiunnsiniianined 8, 25, 30

ls SE ccrenscinrsinesticmnentinvitesisingtiiniinninnnintoctantann 4, 31

eta IE iccnsscccirviisieciesiniepicinbieiannciiniciintiinetenianiantseitaninaiian j

ID Cie BED ccnnssnnssesasncsnssssvesmecnssvnaceemecmmcemanmnennnia 12, 14

Be iis CITT tecstonsnecninnincenstinniamnosennntnieemnenitl 4,9, 12, 13, 15

Fa le: SD ercunctnniosnienenenneninnninnnnienniantal 4

Be ees ED ceteterccictrementcenetinicenmimmenanencimnia 4, 6, 8, 31

BD WE BI ectsseccnssenensensrvenincsesisiansinessnsncasnssenenncinittaaasenneinisits 3

VII

Rules—Continued: Page

Fed. R. Bankr. P.:

EEE SESE IE SEI eager RETR T SO lene tet 2

IID ensssctntebiscnsicinssiainsningitintaininstciabinesabibcaauiiasitiiininitine passim

Sciatic a 17

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ESTATES TEESE SREE LESS C NOS area eee! 24

EES TERRE RLS AE EAR 28

Sarai icnessemencennennsntiorensuneenanstepunienntnieiimenememnes passim

Rule 9014 advisory committee’s note (1983)................... 17

IIIT osnicnsecintelidenttinntnemtintiadtdisbdaimmantieanisiitiaeniinseene 24

| TEL eee ee Roe eRe eee Eee eRe 24

REE EES a CSRS eer ed ees Ee oe Me 24

Fed. R. Civ. P.:

Sniping cad ace 24

IS ae ane enone a EET eRe 24

eae CEN eo Ne em TO ET 25

aaa a eS oh a 13

Miscellaneous:

Admin. Office of U.S. Courts, Federal Judicial Case-

load Statistics:

Tbl. B-1: U.S. Courts of Appeals—Cases Com-

menced, Terminated, and Pending by Circuit

and Nature of Proceeding, During the 12-Month

Period Ending March 31, 2014 (Mar. 2014),

http://www.uscourts.gov/uscourta/Statistics/

FederalJudicialCaseloadStatistica/2014/tables/

EN iinciiccerctiemnnsinnanininegitninneneiianenmntenitnineciues 33

Vill

Miscellaneous—Continued: Page

Tol. B-10: U.S. Bankruptcy Appellate Panels—

Appeals Commenced, Terminated, and Pending,

by Circuit, During the 12-Month Periods Ending

March 31, 2013 and 2014 (Mar. 2014), http://www.

uscourts.gov/uscourts/Statistica/F ederal

JudicialCaseloadStatitics/2014/tables/B 10

TbL C-2: U.S. District Courts—Civil Cases

Commenced, by Basis of Jurisdiction and Nature

of Suit, During the 12-Month Periods Ending

March 81, 2013 and 2014 (Mar. 2014, http://

www.uscourts.gov/uscourts/Statistics/F edera!

JudicialCaseloadStatistics/201 4/tables/C02

ET ciccestacibantansintiitniicietinneibidaieindeinaedcaiaiiiniomnianiiin 33

TbL. F: U.S. Bankruptcy Courts—Cases

Commenced, Terminated, and Pending During

the 12-Month Periods Ending March 31, 2013

and 2014 (Mar. 2014), http://www.uscourts.gov/

uscourts/Statistics/F ederal.JudicialCaseload

Statisticsa/2014/tables/F00Mar14. pdf... 33

Black’s Law Dictionary (9th ed. 2009)................00+- 12, 15, 21

Rhett G. Campbell, Jssues in Litigation, 1 J. Bankr.

i scent 20

Collier on Bankruptcy (Alan N. Resnick & Henry J.

Sommer, eds., 16th ed. Sept. 2014):

Tits Wr icchacesatdanesncasenascseisetniolicaabeadiieimilaeinadaniinagadonunts 14, 15, 16, 17

TUTTI, iinsctepuoesseoseiaieianinlieeieediebeeaplemtuibinnedintetanitineepeniabieeninies 28, 31

Webster’s Third New International Dictionary

___PARTISSRESESESLOEA REA Y Erna Bee nro er tO re eo 21

15A Charles Alan Wright et al., Federal Practice and

Procedure (3d ed. 1992 & Supp. 2014)............cccseseeeesesees 26

In the Supreme Court of the Gnited States

No. 14-116

LOUIS B. BULLARD, PETITIONER

Vv.

BLUE HILLS BANK, FKA

HYDE PARK SAVINGS BANK

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

BRIEF FOR THE UNITED STATES

AS AMICUS CURIAE SUPPORTING PETITIONER

INTEREST OF THE UNITED STATES

The United States has a substantial interest in the

Court’s resolution of the question presented because

United States Trustees, who are Department of Jus-

tice officials appointed by the Attorney General, are

charged with supervising the administration of bank-

ruptcy cases. 28 U.S.C. 581-589a. United States

Trustees “may raise and may appear and be heard on

any issue in any case or proceeding under” the Bank-

ruptey Code. 11 U.S.C. 307. Resolution of the ques-

tion presented may affect the sound administration of

the bankruptcy system and the appealability of other

orders relating to United States Trustees’ duties.

(1)

2

STATEMENT

1. In a bankruptcy under Chapter 7 of the Bank-

ruptcy Code, a debtor’s assets are generally liquidated

and distributed to creditors. See 11 U.S.C. 726. Ina

bankruptcy under Chapter 13, by contrast, debtors

“develop a plan to repay all or a portion of their debts

over a period of time specified in the plan.” United

Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260,

264 (2010). Confirmation of a proposed Chapter 13

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

the plan if the debtor completes the payments the plan

requires.” [bid.; see 11 U.S.C. 1328(a).

A Chapter 13 debtor must be an individual with

regular income whose indebtedness falls below certain

statutory limits. 11 U.S.C. 109%e). A debtor initiates a

Chapter 13 case by filing a petition in bankruptcy

eourt. 11 U.S.C. 301(a), 303(a). That filing automati-

cally stays all collection efforts against the debtor. 11

U.S.C. 362(a). Within 14 days, the debtor must pro-

pose a plan that identifies all claims against the estate,

allocates a portion of his income to pay unsecured

claims on a pro rata basis, and proposes a payment

schedule. 11 U.S.C. 1321, 1322; Fed. R. Bankr. P.

3015(b). All payments under a plan must be made

within three to five years. 11 U.S.C. 1322(d).

Any party in interest may object to a proposed

Chapter 13 plan. 11 U.S.C. 1324(a). Such an objection

initiates a “contested matter” that is governed by

Federal Rule of Bankruptcy Procedure 9014. See

Fed. R. Bankr. P. 3015(f), 9014. If the court resolves

the contested matter by overruling all objections and

confirming the plan, the debtor must make all re-

quired payments under the plan. If the debtor does

so, the court will discharge the debtor’s remaining un-

3

secured debts, subject to certain exceptions. 11

U.S.C. 1328(a).

2. The district courts have original jurisdiction in

bankruptcy cases, and they typically refer bankruptcy

cases to the bankruptcy courts. See 28 U.S.C. 1334,

157(a).' District courts have appellate jurisdiction

over appeals “from final judgments, orders, and de-

crees * * * entered in cases and proceedings” in

bankruptcy courts. 28 U.S.C. 158(a)(1). If a bank-

ruptcy appellate panel has been established within a

particular judicial circuit, appeals under Section

158(a) will be heard by the panel unless the appellant

chooses to appeal to the district court or a party to the

appeal does not consent to the panel’s jurisdiction. 28

U.S.C. 158(b)(1) and (c)(1). The courts of appeals in

turn “have jurisdiction of appeals from all final deci-

sions, judgments, orders, and decrees entered” by a

district court or bankruptcy appellate panel under

Section 158(a) or (b). 28 U.S.C. 158(d)(1).

As relevant here, Section 158 also grants district

courts and bankruptcy appellate panels jurisdiction to

hear appeals from interlocutory orders “with leave of

the court.” 28 U.S.C. 158(a)(3). The courts of appeals

also have jurisdiction to review interlocutory or final

orders if (1) the bankruptcy court, district court, or

bankruptcy appellate panel involved certifies, or all

parties acting jointly certify, that (a) the appeal “in-

volves a question of law as to which there is no con-

trolling decision” from this Court or the court of ap-

peals; (b) the appeal “involves a question of law re-

quiring resolution of conflicting decisions”; or (c) “an

' After a case has been referred to the bankruptcy court, a dis-

trict court may withdraw all or part of the reference “for cause

shown.” 28 U.S.C. 157(d).

4

immediate appeal * * * may materially advance

the progress of the case or proceeding in which the

appeal is taken”; and (2) the court of appeals authoriz-

es the appeal. 28 U.S.C. 158(d)(2)(A).

When district courts issue orders in bankruptcy

cases, the general appellate-jurisdiction statutes ap-

ply. See Connecticut Nat'l Bank v. Germain, 503 U.S.

249, 253-254 (1992). Final decisions of the district

courts and orders relating to injunctions are appeala-

ble as of right. 28 U.S.C. 1291, 1292(a)(1). Interlocu-

tory orders are appealable if the district court certi-

fies that the order “involves a controlling question of

law as to which there is substantial ground for differ-

ence of opinion and that an immediate appeal* * *

may materially advance the ultimate termination of

the litigation,” and the court of appeals accepts the

appeal. 28 U.S.C. 1292(b).

3. Petitioner owns and resides in a two-unit house

in Randolph, Massachusetts, on which respondent

holds a mortgage. Pet. App. la, 20a, 47a. The original

principal was $387,000, and the mortgage will mature

on June 1, 2035. Jd. at la-2a. On December 14, 2010,

petitioner filed a Chapter 13 petition. Jd. at 47a. Re-

spondent subsequently filed a proof of claim in the

amount of $346,006.54. Jbid. Petitioner and respond-

ent dispute the property’s current value, appraising it

at $245,000 and $285,000, respectively. Jbid. It is un-

disputed, however, that the house’s current value is

“substantially less than [respondent’s] claim.” Jbid.

Petitioner proposed a plan and amended it three

times, filing his Third Amended Plan on January 17,

2012. Pet. App. 2a. That plan proposed “hybrid”

treatment of his mortgage debt. /bid. Petitioner pro-

posed to bifurcate respondent’s claim into a secured

5

portion, equal to the current value of the property,

and an unsecured portion, consisting of the remaining

debt. Jbid. Petitioner proposed to pay the secured

portion by maintaining the monthly payments pursu-

ant to the terms of the original note and for a period

exceeding the maximum five-year term of a Chapter

13 plan (albeit for less than the full term of the mort-

gage because the principal would be reduced). Id.

at 46a-48a; see In re McGregor, 172 B.R. 718, 720-722

(Bankr. D. Mass. 1994) (confirming a hybrid plan). He

proposed to pay a dividend of approximately 5.26% on

the unsecured portion of the claim during the five-

year plan. Pet. App. 48a.

Respondent filed an objection under Federal Rule

of Bankruptcy Procedure 3015(f), initiating a contest-

ed matter as to the validity of the plan. Pet. App. 2a;

see Fed. R. Bankr. P. 9014. No other creditor object-

ed. Respondent argued that the Bankruptcy Code al-

lowed such a “cramdown” of its claim only if, after bi-

furcation, petitioner paid the entire secured portion

during the five-year plan period. Pet. App. 2a, 49a.

The bankruptcy court took briefing, held a hearing,

and issued an order sustaining respondent’s objection

and denying confirmation on the ground that petition-

er’s proposed plan was “incompatible with the provi-

sions of the Bankruptcy Code.” Id. at 47a. On the

same day, the bankruptcy court issued an order stat-

ing that petitioner “shall file a further amended plan

[within 30 days], failing which, this case shall be dis-

missed.” Bankr. Ct. Doc. 99, at 1 (July 24, 2012); see

Pet. App. 67a.

4. Petitioner appealed to the Bankruptcy Appellate

Panel for the First Circuit. Pet. App. 4la. Petitioner

filed a motion seeking leave to appeal under Section

6

158(a)(3). Jbid. Petitioner also noted, but expressed

his disagreement with, a prior decision of the panel

holding that an order denying plan confirmation is not

an immediately appealable final order. See id. at 41a

& n.2; B.A.P. Doc. 113, at 4 (Aug. 22, 2012) (citing Jn

re Watson, 309 B.R. 652 (1st Cir. B.A.P. 2004), aff'd,

403 F.3d 1 (1st Cir. 2005)).

The bankruptcy appellate panel treated petitioner’s

appeal as interlocutory but granted petitioner’s mo-

tion for leave to appeal. Pet. App. 4la. The panel

viewed its discretion to grant interlocutory review un-

der Section 158(a)(3) as “informed by” 28 U.S.C.

1292(b), which governs interlocutory appeals from the

district courts to the courts of appeals. Pet. App. 42a.

The panel held that the Section 1292(b) standard was

satisfied in this case, and it accordingly agreed to hear

petitioner’s appeal. Jd. at 42a-45a.

The panel concluded, in that regard, that the validi-

ty of petitioner’s hybrid plan presented a “controlling

question of law * * * as to which there is substantial

ground for difference of opinion,” and that “an imme-

diate appeal [would] materially advance the ultimate

termination of the litigation.” Pet. App. 42a-45a (cita-

tion omitted). The panel stated that petitioner appar-

ently “could not realize confirmation of a subsequent

amended plan,” and that petitioner’s “only other op-

tion * * * is to await dismissal of the case and de-

termine whether to pursue the appeal.” Jd. at 44a.

The panel further explained that, “[{i]f a debtor cannot

obtain a stay of the dismissal pending appeal, this op-

tion could potentially result in the loss of the property.

Such an outcome would not only irreparably harm [pe-

titioner] but would significantly alter his incentive to

pursue an appeal.” bid.

7

The bankruptcy appellate panel subsequently af-

firmed the bankruptcy court’s order denying confir-

mation of petitioner’s proposed plan. Pet. App. 18a-

36a. The panel agreed with the bankruptcy court that

the “hybrid plan” was “inconsistent with the govern-

ing sections of the Bankruptcy Code.” /d. at 20a;

see id. at 23a-36a; 11 U.S.C. 1322(b)(2) and (5),

1325(aX(5)(B)(i)(1), 1328(a)(1).

5. Petitioner filed a notice of appeal to the First

Circuit. Pet. App. 3a. Petitioner also asked the bank-

ruptcy appellate panel to certify the case for interloc-

utory appeal to the court of appeals under Section

158(d)(2). Ibid. The appellate panel denied the re-

quest, stating that certification was “unnecessary.”

Id. at 17a.

The court of appeals dismissed petitioner’s appeal

for lack of jurisdiction. Pet. App. la-15a. The court

stated that, because “bankruptcy cases typically in-

volve numerous controversies bearing only a slight

relationship to each other, ‘finality’ is given a flexible

interpretation in bankruptcy.” /d. at 5a (citation omit-

ted). The court thus recognized that “an order may be

final even if it does not resolve all issues in the [bank-

ruptcy] case.” /bid. The court of appeals stated, how-

ever, that a bankruptcy-court order is appealable as of

right only if it “finally dispose[s] of all the issues per-

taining to a discrete dispute within the larger proceed-

ing.” Ibid. (citation omitted).

Applying those principles, the court of appeals held

that “[aJn order of an intermediate appellate tribunal

affirming the bankruptcy court’s denial of confirma-

tion of a reorganization plan is not a final order so

long as the debtor remains free to propose an amend-

ed plan.” Pet. App. 7a. Because the bankruptcy

8

court’s order in this case allowed petitioner to file an

amended plan within 30 days, and any such further

proceedings would not be “ministerial,” the court held

that the order did “not finally dispose of all the issues

pertaining to a discrete dispute within the larger pro-

ceeding.” Id. at 7a-8a (citations omitted).

The court of appeals recognized that its decision

would leave petitioner with the “unappealing” options

of either proposing a plan he did not want, objecting

to it, and appealing the order confirming that plan; or

else allowing his bankruptcy case to be dismissed and

appealing the dismissal order. Pet. App. 9a. The

court observed, however, that instead of appealing in

the first instance to the bankruptcy appellate panel,

petitioner “could have sought certification and author-

ization to directly appeal” to the court of appeals.

Ibid. (citing 28 U.S.C. 158(d)(2)). The court also noted

that, if petitioner had “chosen to take his intermediate

appeal to the district court rather than the [appellate

panel], he could have sought permission to appeal the

district court’s interlocutory order under 28 U.S.C.

§ 1292(b).” Jbid. The court of appeals recognized

that “neither of these routes provides for appeals as of

right,” but it asserted that the statutory mechanisms

for discretionary interlocutory appeals “do provide a

safety valve for situations in which delaying review by

the court of appeals would be unjust or inappropri-

ate.” Ibid. The court concluded that its rule treating

denials of plan confirmation as non-final “promotes

judicial efficiency and is faithful to the limitations that

Congress has placed on [the court’s] jurisdiction.” /d.

at 13a-14a.

9

SUMMARY OF ARGUMENT

The bankruptcy court’s order here was final and

therefore appealable as of right under 28 U.S.C.

158(a)(1) because it conclusively sustained respond-

ent’s objection and conclusively denied confirmation of

petitioner’s proposed Chapter 13 plan. The bankrupt-

cy appellate panel’s order affirming the denial of plan

confirmation was in turn equally final and appealable

to the court of appeals under 28 U.S.C. 158(d)(1).

1. Section 158(a)(1) authorizes immediate appeals

as of right “from final judgments, orders, and decrees

* * * entered in cases and proceedings” in bank-

ruptcy courts. 28 U.S.C. 158(a)(1). The phrase “cases

and proceedings” is important, because a single bank-

ruptcy “case” may consist of multiple distinct “pro-

ceedings.” Appeals in ordinary federal civil litigation

are governed by the “single judicial unit” rule. Under

that rule, subject to limited exceptions, a “final deci-

sion” within the meaning of 28 U.S.C. 1291 must be

one that terminates the entire case. That rule, how-

ever, does not apply in bankruptcy. Rather, it is un-

disputed that Section 158(a)(1) authorizes an appeal

from any order that terminates a discrete proceeding

within a bankruptcy case, even if the order does not

terminate the case as a whole.

Congress has not defined the term “proceedings” in

Section 158(a). An adjoining Bankruptcy Code provi-

sion, however, contains a non-exhaustive list of 16

kinds of “core proceedings.” See 28 U.S.C. 157(b)(2).

That list illustrates the range of discrete “proceed-

ings” that may occur within a single bankruptcy case.

One of the listed types of “core proceedings” is “con-

firmations of plans.” 28 U.S.C. 157(bX2)(L). The

Federal Rules of Bankruptcy Procedure provide that,

10

when a dispute arises about whether a proposed plan

should be confirmed, the validity of the plan is re-

solved as a discrete “contested matter” through rela-

tively formal procedures. See Fed. R. Bankr. P.

3015(f), 9014.

The approach described above, under which orders

that conclusively resolve discrete proceedings within

the larger bankruptcy case are final and immediately

appealable as of right, has an established historical

pedigree and makes good practical sense. Such dis-

crete controversies can often be reliably decided even

while other issues remain outstanding, and no useful

purpose would be served by deferring appeals until

the termination of the entire bankruptcy case. And

because orders resolving such disputes are often the

building blocks for subsequent administration of the

case, they may be difficult or impossible to unwind

once the case is over.

2. It is well settled that, when a bankruptcy court

grants confirmation of a proposed Chapter 13 plan,

that order is final and immediately appealable even

though it does not terminate the bankruptcy case as a

whole. See United Student Aid Funds, Inc. v. Espi-

nosa, 559 U.S. 260, 264 (2010). When a bankruptcy

court terminates the same contested matter by con-

clusively denying confirmation of a proposed plan, its

order is likewise final. A contrary rule would inap-

propriately favor creditors over debtors, by giving the

former but not the latter a right to appeal adverse or-

ders regarding plan confirmation.

3. The finality of the bankruptcy court’s order

denying confirmation of petitioner’s Third Amended

Plan is not altered by the fact that the court gave peti-

tioner an opportunity to file a further amended plan

11

within a fixed period of time. Respondent’s objection

to the Third Amended Plan created a contested mat-

ter, which was subsequently adjudicated through rela-

tively formal procedures, and the bankruptcy court

conclusively determined that the plan was unconfirm-

able. If petitioner had proposed an alternative plan,

any objection to that plan would have created a new

contested matter, not a continuation of the prior dis-

pute. For the same reason, the bankruptcy appellate

panel’s affirmance was likewise final, because the ap-

pellate panel conclusively determined that petitioner’s

Third Amended Pian could not be confirmed.

Practical considerations further support this result.

Under the court of appeals’ decision, a debtor could

pursue an appeal as of right from the denial of plan

confirmation only by (1) allowing his entire case to be

dismissed and then appealing, or (2) successfully pro-

posing a new plan and then appealing the order that

confirmed the new plan. Both paths are wasteful and

problematic. The first would put the automatic stay at

risk, thus threatening debtors with foreclosure and

other collection efforts. The second would be unavail-

able to some debtors and would pose litigation risks

for most of the rest. It is unlikely that Congress in-

tended for Section 158(a) to impose such barriers to

debtors obtaining appellate review on such an im-

portant issue in Chapter 13 bankruptcy, particularly

when creditors can freely appeal an order that termi-

nates the same discrete proceeding but reaches the

opposite result.

12

ARGUMENT

AN ORDER DENYING CONFIRMATION OF A PROPOSED

CHAPTER 13 PLAN IS A FINAL ORDER THAT IS AP-

PEALABLE AS OF RIGHT

A. A Bankruptcy-Court Order Is Final If It Conclusively

Terminates A Discrete Proceeding Within A Bank-

ruptcy Case

It is well settled, and apparently undisputed in this

case, that bankruptcy-court orders are final and ap-

pealable as of right under Sections 158(a)(1) and (d)(1)

if they “finally dispose of discrete disputes” within an

ongoing bankruptcy case. Howard Delivery Serv.,

Inc. v. Zurich Am. Ins. Co., 547 U.S. 651, 657 n.3

(2006) (quoting Jn re Saco Local Dev. Corp., 711 F.2d

441, 444 (ist Cir. 1983) (Breyer, J.)); Pet. App. 5a

(same); Pet. Br. 16 (same); Resp. C.A. Br. 5 (same).

That rule is supported by the statutory text, this

Court’s precedents, and the history and purposes of

the bankruptcy laws.

1. Like other appellate-jurisdiction statutes, Sec-

tions 158(a)(1) and (d)(1) provide that a “final” order

or decision is appealable as of right. Compare 28

U.S.C. 158(a)(1) and (d)(1), with 28 U.S.C. 1291, and

28 U.S.C. 1257. To be “final” for these purposes, an

order must conclusively resolve the relevant matter

and must “not requir{e] any further judicial action by

the court * * * to determine the matter litigated.”

Black’s Law Dictionary 705 (9th ed. 2009).

The meaning of the word “final” does not vary from

one jurisdictional statute to another. See /n re Lind-

sey, 726 F.3d 857, 859 (6th Cir. 2013) (seeing “no good

reason to have ‘final’ mean one thing in [cases under

Section 158} and another in [cases under Section

1291]” (citation omitted)). But the adjective “final”

13

does not identify the matter that an order must con-

clusively resolve in order to trigger a right of appeal.

An order that does not terminate the entire case may

nevertheless be conclusive (and therefore “final”) with

respect to specific claims, parties, or issues. The de-

termination whether such orders are appealable as of

right necessarily turns on aspects of the relevant ju-

risdictional scheme other than simply the word “final”

standing alone.

In federal civil litigation, courts traditionally apply

the “single judicial unit” rule, under which the entire

case is the relevant unit in assessing finality and the

only final decision is one that terminates an action. Jn

re Saco, 711 F.2d at 443; see Gelboim v. Bank of Am.

Corp., No. 13-1174 (Jan. 21, 2015), slip op. 2; see also

ibid. (a “final decision” within the meaning of 28

U.S.C. 1291 is ordinarily “one which ends the litiga-

tion on the merits and leaves nothing for the court to

do but execute the judgment” (quoting Catlin v. Unit-

ed States, 324 U.S. 229, 233 (1945))). Even in ordinary

federal civil litigation, however, there are several set-

tled exceptions to that rule. Federal Rule of Civil

Procedure 54(b) allows a court to “direct entry of a

final judgment as to one or more, but fewer than all,

claims or parties.” Fed. R. Civ. P 54(b); see Gelboim,

slip op. 3 (“Rule 54(b) relaxes” the single judicial unit

rule); Sears, Roebuck & Co. v. Mackey, 351 U.S. 427,

431-432 & n.3 (1956) (similar). The collateral-order

doctrine allows appeal of a “small category” of orders

that “do not end the litigation” but are nonetheless

“final” because they are “conclusive,” “resolve im-

portant questions separate from the merits,” and “are

effectively unreviewable on appeal from the final

judgment in the underlying action.” Mohawk Indus.,

14

Inc. v. Carpenter, 558 U.S. 100, 106 (2009) (quoting

Swint v. Chambers Cnty. Comm’n, 514 U.S. 35, 42

(1995)). And some state-court orders are “final” un-

der 28 U.S.C. 1257 even though “there are further

proceedings—even entire trials—yet to occur in the

state courts but where for one reason or another the

federal issue is conclusive or the outcome of further

proceedings preordained.” Cox Broad. Corp. v. Cohn,

420 U.S. 469, 479 (1975).

2. The “single judicial unit” rule does not apply in

bankruptcy. “Congress has long provided that orders

in bankruptcy cases may be immediately appealed if

they finally dispose of discrete disputes within the

larger case—and in particular, it has long provided

that orders finally settling creditors’ claims are sepa-

rately appealable.” Howard Delivery, 547 U.S. at 657

n.3 (quoting Jn re Saco, 711 F.2d at 444); see, e.g.,

1 Collier on Bankruptcy § 5.08[1][b], at 5-40 (Alan N.

Resnick & Henry J. Sommer, eds., 16th ed. Sept. 2014)

(Collier) (“determinations of finality in the context of

bankruptcy are dealt with in a more pragmatic and

less technical sense than in other settings” (citation

omitted)).

In 28 U.S.C. 158(a)(1) and (d)(1), Congress provid-

ed two textual indications that orders terminating dis-

crete disputes within a larger bankruptcy case are ap-

pealable as of right. First, Congress granted district

courts and bankruptcy appellate panels jurisdiction

over appeals “from final judgments, orders, and de-

crees * * * entered in cases and proceedings” in

bankruptcy courts. 28 U.S.C. 158(a)(1). Congress’s

use of the term “cases and proceedings” is significant.

In the context of bankruptcy, the word “proceeding” is

ordinarily understood to mean a “particular dispute or

15

matter arising within a pending case—as opposed to

the case as a whole.” Black’s Law Dictionary 1324.

Indeed, “a bankruptcy case is simply an aggregation

of individual controversies, the resolution of which

must be reached before bankruptcy distribution can

be made.” 1 Collier 4 5.08[1][b], at 5-41.

Second, Congress’s reference to “final judgments,

orders, and decrees” in 28 U.S.C. 158(a)(1) and “final

decisions, judgments, orders, and decrees” in 28

U.S.C. 158(d)(1) further suggests that a broader array

of judicial actions will be final and appealable in bank-

ruptcy. In ordinary federal civil litigation, appeals are

allowed from “final decisions” of the district courts.

28 U.S.C. 1291. The word “order” has broader sweep.

See Black’s Law Dictionary 1206 (defining “order” as

a “command, direction, or instruction” and stating

that it “generally embraces final decrees as well as

interlocutory decisions or commands”); Pet. Br. 17-18.

Accordingly, a “particular dispute or matter arising

within” a bankruptcy case may be a “proceeding”

within the meaning of Section 158(a) even though it is

a subset of the case as a whole. A bankruptcy-court

order conclusively resolving such a “proceeding” is

final and appealable as of right under Section

158(a)(1), even though other aspects of the case re-

main to be decided. And an order affirming a final or-

der under Section 158(a)(1) is equally a final order

within the meaning of Section 158(d)(1).

Congress has not defined the term “proceedings”

in Section 158(a)(1). An adjoining Bankruptcy Code

provision, however, see 28 U.S.C. 157, sheds light on

that term’s meaning. Section 157(a)(1) authorizes dis-

trict courts to refer to the bankruptcy courts “all pro-

ceedings arising under title 11 or arising in or related

16

to a case under title 11.” 28 U.S.C. 157(a)(1) (empha-

ses added). Congress’s use of the plural “proceed-

ings” in conjunction with the singular “case” confirms

that a single bankruptcy case may entail multiple

“proceedings.”

Section 157 further provides that “[clore proceed-

ings include, but are not limited to,” 16 distinct kinds

of bankruptcy-related matters. 28 U.S.C. 157(b)(2);

see Executive Benefits Ins. Agency v. Arkinson,

134 S. Ct. 2165, 2172 (2014) (certain matters that

Congress classified as “core” must as a constitutional

matter be treated as “non-core”). Although the dis-

tinction between “core” and “non-core” is immaterial

here, that list illustrates the broad array of discrete

“proceedings” that may be adjudicated within a single

bankruptcy case. The list includes “allowance or dis-

allowance of claims against the estate,” “proceedings

to determine, avoid, or recover preferences,” “objec-

tions to discharges,” and (particularly relevant here)

“confirmations of plans.” 28 U.S.C. 157(b)(2)(B), (F),

(J) and (L). Section 157(b)(2) accordingly informs the

identification of distinct “proceedings” within the

meaning of Section 158(a)(1), and suggests that such

proceedings include “confirmations of plans.” 28

U.S.C. 157(b)(2)(L).

Pursuant to the Federal Rules of Bankruptcy Pro-

cedure, all disputes in bankruptcy are resolved either

as “adversary proceedings” or as “contested matters.”

1 Collier 4% 1.01[2}[b], at 1-6; Gentry v. Siegel, 668

F.3d 83, 88 (4th Cir. 2012) (“All disputes in bankrupt-

cy are either adversary proceedings or contested mat-

ters.” (quoting Jn re American Reserve Corp., 840

F.2d 487, 488 (7th Cir. 1988))). An adversary proceed-

ing is “akin to a full civil lawsuit” and is initiated by

17

the filing of a complaint. 1 Collier 7 1.01[2}[b}, at 1-6;

see Fed. R. Bankr. P. 7001 (creating ten different

kinds of “adversary proceedings”). Just as a party

may appeal an order terminating a freestanding law-

suit, a party to an adversary proceeding may appeal a

functionally identical order that terminates that pro-

ceeding, even if other aspects of the bankruptcy case

remain to be adjudicated. See 1 Collier 4 5.08[1]fb], at

5-41 (“Parties to these separate proceedings should

not have to wait for the end of the entire bankruptcy

proceeding before they can appeal.” (quoting In re .

James Wilson Assocs., 965 F.2d 160, 166 (7th Cir.

1992))); see also, e.g., Marshall v. Marshall, 547 U.S.

293, 301-303 (2006) (exercising jurisdiction over appeal

from final decision in an adversary proceeding).

Alternatively, a dispute may be resolved as a less-

formal “contested matter.” See Fed. R. Bankr. P.

9014; see also 1 Collier 4% 5.08[1}{b], at 5-43 (“[C)Jourts

should have a relatively easy time determining finality

in bankruptcy so long as they recognize that each ad-

versary proceeding or contested matter is a discrete

unit and that, once that unit is defined, ordinary con-

cepts of finality apply.”). Such contested matters can

be triggered by, inter alia, “objections to confirmation

of a plan, relief from the automatic stay and the use of

cash collateral, avoidance of a lien under [11 U.S.C.

522(f)], and the assumption or rejection of executory

contracts or unexpired leases.” Fed. R. Bankr. y.

9014 advisory committee’s note (1983).

8 This Court and other appellate courts have long

adjudicated appeals from orders that terminated dis-

crete proceedings but not the entire bankruptcy case.

E.g., Howard Delivery, 547 U.S. at 657 n.3 (finding

jurisdiction under Section 158(d)(1) over a bankrupt-

18

cy-court order denying priority to a claim); Marshall,

547 U.S. at 301-303 (appeal from final resolution of an

adversary proceeding); Jn re Riggsby, 745 F.2d 1153,

1154 (7th Cir. 1984) (“[W]Je think it reasonably clear

that the dismissal by the bankruptcy judge of a com-

plaint objecting to the discharge of the bankrupt is

final.”); Jn re Saco, 711 F.2d at 444 (collecting cases).

Allowing immediate appeals from orders that re-

solve discrete proceedings within a bankruptcy case

promotes important interests. Unlike the usual civil

case, “‘bankruptcy cases typically involve numerous

controversies bearing only a slight relationship to

each other.’” Resp. C.A. Br. 5 (quoting Jn re North-

wood Props., LLC, 509 F.3d 15, 21 (1st Cir. 2007)).

Bankruptcy cases often continue for years, moreover,

after such subsidiary disputes have been resolved. A

Chapter 13 case, for example, typically continues for

three to five years. See 11 U.S.C. 1322(d). And, again

unlike in ordinary federal civil litigation, these dis-

crete disputes will often involve parties who have no

other interest in or connection to the larger bankrupt-

cy case.

This does not mean that the discrete proceedings

described above are entirely unconnected to the larg-

er bankruptcy case. A particular contested matter

may be severable from the case as a whole in the

sense that the contested matter can be reliably deci-

ed even while other issues remain to be adjudicated;

yet resolution of the contested matter may be an es-

sential building block to orderly disposition of the is-

sues that remain. For example, “[sjeparate and dis-

crete orders in many bankruptcy proceedings deter-

mine the extent of the bankruptcy estate and influ-

ence creditors to expend or not to expend effort to re-

19

cover monies due them.” Jn re England, 975 F.2d

1168, 1171 (5th Cir. 1992).

Perhaps paradoxically, that connection between

many discrete proceedings and the overall bankruptcy

case reinforces the conclusion that immediate appeal

should be available as of right once the discrete pro-

ceeding has been conclusively resolved. While errors

in ordinary federal civil litigation can typically be

remedied by vacating a judgment and ordering a re-

trial, see Mohawk Indus., 558 U.S. at 109, in bank-

ruptcy such a do-over is often practically unavailable,

since many individual actions in bankruptcy are diffi-

cult, if not impossible, to unwind at the end of the

case. For example, an order approving the sale of es-

tate property or determining that assets are not ex-

empt from distribution, or an order appointing a trus-

tee, cannot realistically be undone after assets have

been sold or distributed to third parties or the trustee

has finished administering the estate. See Jn re Eng-

land, 975 F.2d at 1171; In re Marvel Entm’'t Grp., Inc.,

140 F3d 463, 470-471 (3d Cir. 1998). Those practical

considerations have long led courts to deem orders

“final” in bankruptcy because they conclusively re-

solve a discrete dispute, even when superficially simi-

lar orders are not final in ordinary federal civil litiga-

tion. See Jn re Saco, 711 F.2d at 446-448.

RB. An Order Conclusively Resolving All Objections To

Confirmation Of A Chapter 13 Plan Finally Termi-

nates A Discrete Proceeding, Regardless Of That Pro-

ceeding’s Outcome

An order that conclusively resolves all objections to

confirmation of a Chapter 13 plan terminates a dis-

crete proceeding and is therefore final and appealable

by right under Section 158(a)(1) and (d)(1). That is so

20

whether the order confirms or refuses to confirm the

plan.

1. It is undisputed that an order confirming a

Chapter 13 plan is a final order appealable as of right.

See Resp. C.A. Br. 4-5. This Court has concluded that

an order granting confirmation of a Chapter 13 plan is

“final” for preclusion purposes. Espinosa, 559 U.S.

at 269. The courts of appeals unanimously agree that

an order granting confirmation of a plan is likewise

final for purposes of appealability. E.g., In re Wool-

sey, 696 F.3d 1266, 1268-1269 (10th Cir. 2012); see also

Pet. Br. 24 n.6 (collecting cases).

Orders confirming plans are appealable even

though confirmation of a plan is only one step toward

the completion of the overall bankruptcy case. For

example, a bankruptcy court does not address wheth-

er or to what extent to discharge debts until all plan

payments have been made, which typically takes three

to five years. See 11 U.S.C. 1322(d), 1328(a). In the

interim, a debtor may seek to modify the plan, which

could substantially alter plan terms and creditors’

rights. See 11 U.S.C. 1329(a). And if a debtor fails to

make required payments, a court may convert a Chap-

ter 13 case to a Chapter 7 case—leading to liquidation

of the debtor’s assets—or dismiss the case outright.

11 U.S.C. 1307(c). There also may be “issues to be re-

solved through additional litigation, such as avoidance

actions, claims allowance, * * * and interpretation

and enforcement of the rights created under the plan.”

Rhett G. Campbell, Jssues in Litigation, 1 J. Bankr.

L. & Prac. 94, 94 (1991). An order confirming a plan is

appealable as of right, however, because it terminates

the discrete Rule 9014 contested matter that a credi-

21

tor initiates by objecting to the plan. See Fed. R.

Bankr. P. 3015(f).

2. The appealability of an order terminating a Rule

9014 contested matter over the validity of a proposed

plan does not depend on whether the court grants or

denies plan confirmation. Whatever the outcome,

such an order terminates the same discrete proceed-

ing, namely the contested matter that a creditor initi-

ated by objecting to the plan.

That result flows logically from the statutory text

and the Federal Rules of Bankruptcy Procedure. Sec-

tion 158(a)(1) authorizes appeals as of right “from fi-

nal judgments, orders, and decrees * * * entered in

cases and proceedings” in bankruptcy courts. 28

U.S.C. 158(a)(1). Section 157(b)(2)(L) identifies “con-

firmations of plans” as “core proceedings,” suggesting

that an order conclusively denying confirmation of a

plan resolves a discrete “proceeding{]” within the

meaning of Section 158(a). 28 U.S.C. 157(b)(2)(L).

Bankruptcy Rule 3015(f) further provides that a con-

tested matter regarding the validity of a plan is initi-

ated when a creditor objects. See Fed. R. Bankr. P.

3015(f), 9014. That contested matter may be termi-

nated either by an order sustaining objections to a

proposed plan, or by an order overriding the objec-

tions and confirming the plan.

The process for resolving this discrete dispute is no

less a “proceeding” when the bankruptcy judge denies

confirmation of the plan than when she confirms it.

The word “proceeding” ordinarily refers to a legal

process, from start to finish, regardless of the sub-

stantive result produced. See Black’s Law Dictionary

1324; Webster’s Third New International Dictionary

1807 (1993) (“the course of procedure in a judicial ac-

22

tion or in a suit in litigation”). Precisely the same

procedures apply in the contested matter here, re-

gardless of the ultimate outcome. See Fed. R. Bankr.

P. 3015(f), 9014.

By the same token, an order that sustains an objec-

tion and denies confirmation of a proposed plan is just

as “final” a disposition of that contested matter as is

an order confirming the plan. In either event, the or-

der conclusively terminates the contested matter and

does “not requir{e] any further judicial action by the

court * * * to determine the matter litigated.”

Black’s Law Dictionary 705. That is so even when, as

here, the order permits the debtor to propose a sub-

stitute plan. If the debtor proposes a new plan, any

objections to that plan would create a new and distinct

contested matter. See Fed. R. Bankr. P. 3015(f);

pp. 23-25, infra.

3. For the same reason, the bankruptcy appellate

panel’s decision was appealable as of right to the First

Circuit under 28 U.S.C. 158(d)(1) because it affirmed

the bankruptcy court’s denial of plan confirmation.

Section 158(d)(1) states that “[t)}he courts of appeals

shall have jurisdiction of appeals from all final deci-

sions, judgments, orders, and decrees entered under

subsections (a) anc (b) of this section.” Jbid. The

bankruptcy appellate panel’s affirmance was “entered

under” Section 158(b). And it was “final” within the

meaning of Section 158(d)(1), just as the bankruptcy

court’s order was “final” within the meaning of Sec-

tion 158(a)(1), because it conclusively determined that

petitioner’s Third Amended Plan could not be con-

firmed. See Pet. App. 36a.

23

C. The Relevant “Proceeding” In This Case Is The Specif-

ic Contested Matter That Respondent Initiated To

Challenge Petitioner's Third Amended Plan

Although the bankruptcy court conclusively reject-

ed petitioner’s proposed Third Amended Plan, the

court gave petitioner 30 days to propose a further

amended plan. See Pet. App. 2a. Thus, for purposes

of the jurisdictional rule described above—ie., that a

bankruptcy-court order that definitively resolves a

discrete “proceeding” within the larger bankruptcy

case is ordinarily appealable as of right—this case

raises the further question of how the relevant “pro-

ceeding” should be defined. If the relevant “proceed-

ing” is the specific contested matter in which respond-

ent successfully opposed confirmation of the Third

Amended Plan, the bankruptcy court’s order was “fi-

nal” as to that proceeding. But if the entire process

by which a debtor seeks confirmation of some plan is

viewed as a single “proceeding,” the bankruptcy

court’s order was not “final” because it expressly con-

templated the possibility of further efforts by peti-

tioner to devise an acceptable plan. For a variety of

reasons, the former conception of the relevant “pro-

ceeding” is more consistent with the text, structure,

and purposes of the relevant Bankruptcy Code provi-

sions.

1. Under the Federal Rules of Bankruptcy Proce-

dure, each contested matter has a distinct formal

starting point and a distinct formal ending point, and

each contested matter is governed by established pro-

cedures. See Fed. R. Bankr. P 3015(f), 9014. Indeed,

although a contested matter concerning plan confir-

mation is initiated by an “objection,” ibid., that filing

is more analogous to a complaint that initiates an ad-

24

versary proceeding than to an “objection” within en

ongoing civil case. The objection to confirmation must

be served “in the manner provided for service of a

summons and complaint” under Bankruptcy Rule

7004, which governs commencement of adversary pro-

ceedings. See Fed. R. Bankr. P. 3015(f), 9014(b).

Bankruptcy Rule 7004 is the analogue to Federal! Rule

of Civil Procedure 4, which governs service of a com-

plaint to commence a new case. See Fed. R. Bankr. P.

7004; Fed. R. Civ. P. 4. Bankruptcy Rule 7005, which

incorporates Federal Rule of Civil Procedure 5 and

governs “pleadings and other papers” in an existing

adversary proceeding, applies to papers filed “after”

the objection to the proposed plan. Fed. R. Bankr. P.

7005, 9014(b). Many of the same rules that apply

within the ten types of adversary proceedings also ap-

ply, with limited modifications, within the contested

matter created when a creditor objects to a plan. See

Fed. R. Bankr. P. 9014(c) and (d) (Bankruptcy Rules

7009, 7017, 7021, 7025, 7026, 7028-7037, 7041, 7042,

7052, 7054-7056, 7064, 7069 and 7071 apply in both ad-

versary proceedings and contested matters.).

It is also significant that, when a bankruptcy court

sustains objections to one proposed plan and the debt-

or then submits another, any contested matter con-

cerning the second plan may involve fundamentally

different issues and objections than did the first con-

tested matter. Indeed, the creditor whose objection to

the first plan was sustained may have no objection to

the amended plan. For example, if a bankruptcy court

sustained a bank’s objection to a plan that sought to

cram down a mortgage held by the bank, a debtor

might propose a new plan that fully preserved that

bank’s rights while modifying the rights of another

25

creditor, such as a different bank that held a lien on

the debtor’s car. The second bank might object and

initiate a new contested matter even though the first

bank was content with the amended plan. The pro-

spect that such sequential contested matters may in-

volve distinct objections and different objecting par-

ties reinforces the conclusion that each is a discrete

“proceeding” within the meaning of Section 158(a).

2. Treating an order denying confirmation of a plan

as interlocutory, when an order granting confirmation

is final, would produce anomalous results. Under set-

tled law (see pp. 20-21, supra), a creditor who has un-

successfully opposed plan confirmation can immedi-

ately appeal as of right to the district court or bank-

ruptcy appellate panel under Section 158(a)(1). If that

first appeal is unsuccessful, the disappointed creditor

can obtain a second level of review in the court of ap-

peals. 28 U.S.C. 158(d)(1). Under the approach the

court of appeals took below, by contrast, a disappoint-

ed debtor has no comparable right to immediate re-

view of an order denying plan confirmation, but may

instead pursue an interlocutory appeal only “with

leave of the court.” 28 U.S.C. 158(a)(3) and (d)(2).

To be sure, asymmetry “happens all the time” in

civil appeals. Jn re Lindsey, 726 F.3d at 861. “A civil

plaintiff for example may immediately challenge a

grant of summary judgment to a defendant, but a de-

fendant who loses his motion usually has to wait until

after trial for appellate review.” /bid. But in ordinary

civil litigation, any kind of entity may be a plaintiff or

a defendant—indeed, the same party can play both

roles in the same case at the same time. See Fed. R.

Civ. P 13 (governing counterclaims and crossclaims).

26

The rule that respondent advocates, by contrast,

would systematically advantage creditors at the e::-

pense of debtors. In Chapter 13, only a debtor may

propose a plan. 11 U.S.C. 1321. “[T]he debtor is al-

ways the party who seeks to confirm a plan; the credi-

tor is always the party who seeks to deny confirma-

tion.” Maziorino v. Branford Sav. Bank, 691 F.2d 839,

95 (2d Cir. 1982) (Lumbard, J., dissenting). In Chap-

ter 11, the debtor has an exclusive right to file a plan

within the first 120 days of the bankruptcy. See 11

U.S.C. 1121. Treating denial of plan confirmation as

non-final would thus create an asymmetry fundamen-

tally different from that which regularly occurs in or-

dinary civil litigation.

3. In ordinary federal civil litigation, an order dis-

missing a suit without prejudice is final and appeala-

ble. United States v. Wallace & Tiernan Co., 336 U.S.

793, 794 n.1 (1949); see, e.g., Pal Family Trust v. Ti-

cor Tit. Inc., 490 B.R. 480, 482-483 (S.D.N.Y. 2013)

(same for adversary proceeding in bankruptcy). By

contrast, an order granting a motion to dismiss one

complaint but allowing the plaintiff leave to amend

and thus file another “is not final.” 15A Charles Alan

Wright et al., Federal Practice and Procedure

§ 3914.1 & n.16, at 494-495 (3d ed. 1992 & Supp. 2014)

(collecting cases). Within the context of the Bank-

ruptcy Code’s provisions for appellate review, the

more salient of those two analogues is the established

rule that a dismissal without prejudice is immediately

appealable. That rule demonstrates that an other-

wise-final order does not become unappealable simply

because the order expressly contemplates the possibil-

ity that the plaintiff may undertake future efforts to

obtain judicial relief.

27

To be sure, the bankruptcy court’s order in this

case resembles a dismissal with leave to amend in that

it contemplates the possibility of further proceedings

within the same ongoing case. If appellate jurisdiction

in bankruptcy were governed by the usual rule that

the case as a whole is the relevant “judicial unit” for

purposes of assessing finality, that point of similarity

would be dispositive. As explained above, however, a

typical bankruptcy case includes numerous discrete

“proceedings,” with a concomitant right of immediate

appeal when an individual proceeding is conclusively

resolved. Within that framework, the crucial point is

that the bankruptcy court’s order conclusively re-

solved the contested matter concerning respondent’s

Third Amended Plan. Like an order in an ordinary

civil suit dismissing without prejudice, which is ap-

pealable, the order denying plan confirmation termi-

nated the “judicial unit” that in the bankruptcy con-

text is the point of reference for assessing finality,

even though that order contemplated the possibility of

additional contested matters involving the same gen-

eral subject (1.e., plan confirmation).

4. When it denied confirmation of petitioner’s

Third Amended Plan, the bankruptcy court indicated

that the case would be dismissed if petitioner did not

propose a new plan within 30 days. See Pet. App. 2a.

As the court of appeals observed (id. at 9a), petitioner

could have appealed as of right under Section

158(a)(1) if he had allowed the bankruptcy court to

dismiss the case, since the dismissal order would in-

disputably have been “final.” The court of appeals al-

so suggested that petitioner could have “propos[ed]) an

unwanted plan, object[ed] to it, and appeal[ed] its con-

firmation” if the plan was confirmed. /bid. A rule

28

that would make one of those steps a prerequisite to

an appeal as of right would create serious practical

difficulties and would be inconsistent with the overall

structure of the Bankruptcy Code.

a. Upon dismissal, the automatic stay that re-

strains creditors from taking action to collect debts or

enforce liens against the debtor or the property of the

estate terminates. See 11 U.S.C. 362(c). Many Chap-

ter 13 cases are filed by homeowners and others who

are deeply in debt and face foreclosure, repossession

of their assets, or other collection efforts. Dismissal

of the case—and loss of the automatic stay—“would

not only irreparably harm [debtors] but would signifi-

cantly alter [their] incentive to pursue an appeal.”

Pet. App. 44a.

A debtor could seek an extension of the automatic

stay pending appeal. See Fed. R. Bankr. P.

8007(a)(1)(A) (formerly Fed. R. Bankr. P. 8005). Such

relief, however, would require a preliminary injunc-

tion—“an extraordinary remedy never awarded as of

right,” Winter v. Natural Res. Def. Council, Inc., 555

U.S. 7, 24 (2008)—and the debtor would have to per-

suade the bankruptcy court that its own ruling would

likely be reversed on appeal. See id. at 20 (“A plain-

tiff seeking a preliminary injunction must establish,”

inter alia, “that he is likely to succeed on the mer-

its.”); 10 Collier 7 8005.06, at 8005-5 to 8005-6; e.¢.,

In re A&F Enters., Inc. II, 742 F.3d 763, 766 (7th Cir.

2014) (noting that “[tJhe standard for granting a stay

pending appeal mirrors that for granting a prelimi-

nary injunction”). That demanding standard is appro-

priate in ordinary federal civil litigation, where the

filing of suit does not by itself constrain the defend-

ant’s ongoing conduct, and the burden is on the plain-

29

tiff to demonstrate that even temporary restrictions

are warranted. The automatic stay in bankruptcy,

however, reflects Congress’s determination that, un-

less the statutory prerequisites to lifting the stay have

been satisfied, a stay of collection efforts should follow

from the commencement of the case alone. See 11

U.S.C. 362(a). Requiring debtors to forfeit the auto-

matic stay in order to obtain appellate review as of

right of an adverse plan-confirmation decision would

thus subvert the balance that Congress has struck,

particularly since creditors face no similar impedi-

ment to meaningful review of an order conclusively

confirming a plan.*

b. The other alternative identified in the court of

appeals’ opinion—i.e., that petitioner might have pro-

posed an amended plan, objected to his own proposal,

and appealed from any order confirming the plan, see

Pet. App. 9a—is subject to significant practical and

conceptual objections. Even when a particular debtor

is able to obtain confirmation of a substitute plan, “the

debtor would waste valuable time and scarce re-

sources on a plan proposed only for the purpose of ob-

taining appellate review of the earlier order.” Mort

Ranta v. Gorman, 721 F.3d 241, 248 (4th Cir. 2013)

(internal quotation marks and citation omitted). Such

* Loss of the automatic stay is not the only adverse consequence

for a debtor who submits to dismissal of his case in order to obtain

appellate review of an order denying plan confirmation. If such a

dismissal is deemed voluntary and a request had previously been

made for relief from the automatic stay, the dismissal could bar an

individual debtor from filing another bankruptcy petition for six

months. See 11 U.S.C. 10%g)(2). And even if a debtor can re-file,

the automatic stay in the new bankruptcy would last only 30 days

unless the court granted the debtor an extension. 11 U.S.C.

362(c 3A).

30

an appeal would place the debtor in the anomalous po-

sition of contesting the validity of the very plan he had

proposed. And it would require the district court or

bankruptcy appellate panel, in an appeal from an or-

der confirming the alternative plan, to focus not on the

legality of that plan, but on the propriety of an ante-

cedent bankruptcy-court order (7.e., the order denying

confirmation of the debtor’s original plan) that is not

directly before the appellate court. See Pet. Br. 38-39

(discussing difficulties of utilizing this approach to ob-

tain appellate review).

Even within the class of cases in which debtors are

ultimately able to.pbtain appellate review via confir-

mation of substitute plans, there is no evident reason

to prefer this roundabout mechanism to the more

straightforward approach of treating the initial con-

firmation denial as a final order appealable as of right.

Some debtors, moreover, will be unable to propose an

alternative plan that the bankruptcy court will con-

firm. See Pet. App. 44a (“[I]t appears that [petitioner]

could not realize confirmation of a subsequent amend-

ed plan.”). For such debtors, if an order finally deny-

ing confirmation of a particular plan is treated as in-

terlocutory, the only path to appellate review as of

right is to allow the case to be dismissed, thereby

threatening the automatic stay. That approach is in-

consistent with Congress’s design for the reasons set

forth above.

5. The availability of permissive interlocutory re-

view under 28 U.S.C. 158(a)(3) and (d)(2) does not

support treating orders denying plan confirmation as

non-final. See Pet. App. 9a-10a. As discussed above

(pp. 19-22, supra), the order at issue here finally ter-

minated a discrete Rule 9014 contested matter over

31

confirmation of a specific plan, and thus is appropri-

ately appealable as a final order. The pertinent inter-

locutory-review provisions require potential appel-

lants to rely on the discretion of the appellate courts,

whereas creditors aggrieved by plan confirmations

can access two levels of appellate review as of right.

In practice, interlocutory review provides only a

limited safety valve for persons who seek to challenge

non-final orders. Section 158(a)(3) allows interlocuto-

ry appeal “with leave of the court,” without specifying

the standard for such an appeal. 28 U.S.C. 158(a)(3).

Courts, including the bankruptcy appellate panel be-

low, have “generally adopted” the same standard that

applies to interlocutory appeals under 28 U.S.C.

1292(b). 10 Collier 1 8004.08 & n.2 (collecting cases);

see Pet. App. 42a (applying the Section 1292(b) stand-

ard). Certification of an interlocutory appeal to the

court of appeals under Section 158(d)(2) is also rare,

as one of the lower courts must certify that the appeal

satisfies the standard for interlocutory review, and

the court of appeals must exercise its discretion to

hear the appeal. 28 U.S.C. 158(d)(2)(A); see also We-

ber v. United States Trustee, 484 F.3d 154, 161 (2d

Cir. 2007) (declining to accept certified appeal and

suggesting that circuit courts should accept such cases

only when there is uncertainty in the bankruptcy

courts or the decision below is patently incorrect).

6. Treating the denial of plan confirmation as fina!

should not materially “encourag[e] start-and-stop ap-

peals” or “discourag[e] negotiation and mediation.”

Mort Ranta, 721 F.3d at 263 (Faber, J., dissenting).

It is unlikely that significant numbers of financially

distressed debtors whose plans are denied “will waste

their resources on a gratuitous appeal simply because

32

the option to appeal is available, when an amended

plan would provide all the relief needed.” Jd. at 249

(majority op.). /nter alia, while the appeal is pending,

the debtor must continue to make his secured debt

payments, or a court could grant the creditor relief

from the automatic stay. See 11 U.S.C. 362(d); e.g., In

re Lopez, 446 B.R. 12, 20 (Bankr. D. Mass. 2011)

(three post-petition payments in arrears provided

cause for lifting stay); Jn re Skipworth, 69 B.R. 526,

527-528 (Bankr. E.D. Pa. 1987) (failure to make post-

petition mortgage payments is cause for lifting stay).

Bankruptcy law also protects against the risk that

a debtor might propose an unrealistic plan and then

appeal the bankruptcy court’s order denying confir-

mation simply to delay expiration of the automatic

stay. The Bankruptcy Code provides for relief from

the automatic stay in specified circumstances even

while the case is ongoing. See 11 U.S.C. 362(d). Alt-

hough the bankruptcy court’s refusal to confirm a

proposed plan would not by itself justify an order lift-

ing the automatic stay, the debtor’s submission of a

clearly invalid plan would be grounds for such an or-

der. While “a lift stay hearing should not be trans-

formed into a confirmation hearing,” the debtor must

show that the “proposed or contemplated plan is not

patently unconfirmable and has a realistic chance of

being confirmed.” John Hancock Mut. Life Ins. Co. v.

Route 37 Business Park Assocs., 987 F.2d 154, 157 (3d

Cir. 1993) (Alito, J.) (citation omitted).

Finally, predictions of a rash of start-and-stop ap-

peals are unsupported by actual experience. Courts

have long held that Sections 158(a)(1) and (d)(1) allow

appeals as of right from multiple orders in any given

bankruptcy case, and in the 12-month period ending

33

March 31, 2014, more than one million bankruptcy

cases were filed in United States courts.* But instead

of a flood of bankruptcy appeals, there has only been a

trickle. In that same period, there were 2072 appeals

to district courts under Section 158,‘914 appeals to

bankruptcy appellate panels,° and 794 bankruptcy ap-

peals to the courts of appeals.* There is no reason to

suppose that this Court’s resolution of the question

presented will meaningfully alter those numbers.

* Admin. Office of U.S. Courts, Federal Judicial Caseload Sta-

tistics 2014, Tbl. F: U.S. Bankruptcy Courts—Cases Com-

menced, Terminated, and Pending During the 12-Month Peri-

ods Ending March $1, 2013 and 2014 (Mar. 2014), http://www.

uscourts.gov/uscourts/Statistics/F ederalJ udicialCaseloadStatistics

/2014/tables/F00Mar14.pdf.

* This constitutes about one percent of the district courts’ case-

load. Admin. Office of U.S. Courts, Federal Judicial Caseload Sta-

tistics 2014, Tol. C-2: U.S. District Courts—Civil Cases Com-

menced, by Basis of Jurisdiction and Nature of Suit, During the

12-Month Periods Ending March 31, 2013 and 2014 (Mar. 2014).

http://www.uscourts.gov/uscourts/Statistics/F ederal JudicialCaselo

adStatistics/2014/tables/C02Mar14.pdf.

* Admin. Office of U.S. Courts, Federal Judicial Caseload Statis-

tics 2014, Tbl. B-10: U.S. Bankruptcy Appellate Panels—Appeals

Commenced, Terminated, and Pending, by Circuit, During the 12-

Month Periods Ending March $1, 2013 and 2015 (Mar. 2014),

http//www.uscourts.gov/uscourts/Statistics/F ederalJudicialCaselo

adStatistics/2014/tables/B10Mar14.pdf.

* This constitutes about one percent of the courts of appeals’

caseload. Admin. Office of U.S. Courts, Federal Judicial Caseload

Statistics 2014, Tbl. B-1: U.S. Courts of Appeals—Cases Com-

menced, Terminated, and Pending by Circuit and Nature of

Proceeding, During the 12-Month Period Ending March

31, 2014 (Mar. 2014), http:/Avww.uscourts.gov/uscourta/Statistics/

FederalJudicialCaseloadStatistics/201 4/tables/B01 Mar14.pdf.

CONCLUSION

The judgment of the court of appeals should be re-

versed.

Respectfully submitted.

RAMONA D. ELLIOTT

D y Director/General

ounsel

P. MATTHEW SUTKO

Associate General Counsel

WENDy Cox

JOHN POSTULKA

Attorneys

Executive Office for United

States Trustees

FEBRUARY 2015

DONALD B. VERRILLI, JR.

Solicitor General

—— oo Pees P

ing Assistant Attorney

General

MALCOLM L. STEWART

Deputy Solicitor General

ZACHARY D. TRIPP

Assistant to the Solicitor

General

MICHAEL S. RAAB

KAREN SCHOEN

Attorneys