# Amicus Curiae Brief — United Student Aid Funds, Inc. v. Espinosa > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA43085015_0455%3A12 ## Record - **Collection:** Supreme Court brief - **Document type:** Amicus Curiae Brief - **Published:** January 1, 2010 - **Citation:** 559 U.S. 260 ## Text rs ae FILED * TICEOFTHE™ No. 08-1134 Bin Jn the Supreme Court of the GAnited States UNITED STUDENT AID FUNDS, INC., PETITIONER Vv. FRANCISCO... ESPINOSA ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT BRIEF FOR THE UNITED STATES AS AMICUS CURIAE SUPPORTING PETITIONER ELENA KAGAN Solicitar General Counsel of Record TONY WEST Assistant Attorney General MALCOLM L. STEWART Deputy Solicitor General TosBy J. HEYTENS Assistant to the Solicitor General WILLIAM KANTER PETER R. MAIER Attorneys Department of Justice Washington, D.C. 20430-0001 (202) 314-2217 QUESTION PRESENTED Whether the confirmation and subsequent comple- tion of respondent’s plan under Chapter 13 of the Bank- ruptcy Code had the effect of discharging his student loan debt, notwithstanding his failure to initiate an adversary proceeding to determine dischargeability and the lack of any determination by the bankruptcy court that “excepting [the] debt from discharge * * * would impose an undue hardship on the debtor and the debt- or’s dependents.” 11 U.S.C. 523(a)(8). TABLE OF CONTENTS Page ee ic ce ewe ee WOR be kee se sdeueeee 1 ARREST Ss Reng pe gas ie gr a 2 IIE, 5 ipo bes be isnce es Sevecensocevaense 9 Argument: The bankruptcy court’s discharge order did not discharge respondent’s student loan debt because the court did not find, pursuant to the procedures specified in the Bankruptcy Rules, that failure to do so would create undue hardship for the debtor and his till aati a is es as wo 12 A. Petitioner was not required to demand an adversary proceeding or to appeal from the confirmation or discharge order to preserve its right to collect the remainder of respondent’s student loan debt after respondent’s Chapter 13 plan was completed ....... 12 1. Petitioner did not waive its right to an undue hardship determination by failing to object to respondent’s plan or to demand an adversary aN. ks vee BEL ERE I ned 6% be 60404 13 2. Petitioner was not required to appeal the confirmation or discharge order to preserve its right to collect respondent’s remaining debt because, under the terms of the applicable Bankruptcy Code provisions, a discharge order does not discharge student loan debt in the absence of an undue hardship determination ... . . 17 B. Permitting discharge of student loan debt without an undue hardship finding is ineonsistent with the background and purposes of Section 523(a)(&) ...... 23 C. Treating an undue hardship finding as a precondition to discharge is fair to both debtors and creditors ... 26 (111) IV Table of Contents—Continued: Page D. Because respondent did not initiate the appro- priate procedure for securing an undue hardship finding and the bankruptcy court made no such finding in this case, respondent’s student loan debt has not been discharged and the court need not address the constitutional question presented Cc Usccdbeweunat kedeesecesysedns ye 30 EY Pes cas nee evi Vaeed eben eeecdnedanseusees 32 TABLE OF AUTHORITIES Cases: City of New York v. New York, New Haven & Hartford R.R., 344 U.S. 293 (1953) ................. 15 Educational Credit Mgmt. Corp. v. Mersmann (In re Mersmann), 505 F.3d 1033 (10th Cir. PE OSS BR en eee ane 3, 25 Great Lakes Higher Educ. Corp. v. Pardee (In re Pardee), 193 F.3d 1083 (9th Cir. 1999) ............ 8, 21 Johnson v. Home State Bank, 501 U.S. 78 (991) ....... 29 Jones v. Flowers, 547 U.S. 220 (2006) ................. 30 Martin v. Wilks, 490 U.S. 755 (1989) ................. 15 Morales v. TWA, 504 U.S. 374 (1992) ...............5- 22 Nobelman v. American Sav. Bank, 508 U.S. SE te A ge oe A 2 Northwest Austin Mun. Util. Dist. No. One v. prommer, 129 S. Ct. F506 CITB)... ccc ccc cc scces 31 Ruehle v. Educational Credit Mgmt. Corp. (dn re Ruehle), 412 F.3d 679 (6th Cir. 2005) ... 15, 26, 28 Tennessee Student Assistance Corp. v. Hood, ee IE Se: Cae ues S 0a bcaencees sss passim Cases—Continued: Page Travelers Indem. Co. v. Bailey, 129 S. Ct. 2195 (2009) ... 19 Whelton v. Educational Credit Mgmt. Corp., GER 6 SEP GRC. BD ov cas cicavecwsensnuuam 29 Constitution, statutes, regulation and rules: U.S. Const.: Amend. V (Due Process Clause) ................. 8,11 Bankruptcy Act, 11 U.S.C. 35 (1976) .................. 23 Bankruptcy Code (11 U.S.C.): Ch. 1, 11 U.S.C. 101 et seq.: RE | | eer ne 19 BE TR BD nekcdedeccelevenuaseun dene 2 Ch. 3, 11 U.S.C. 301 et seq.: BD TIRED 0-0 6 0 s- — — UNITED STUDENT AID FUNDS, INC., Petitioner, — FRANCISCO J. ESPINOSA, Respondent. ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT BRIEF IN SUPPORT OF RESPONDENT FOR AMICI CURIAE PROFESSORS RICHARD AARON, JAGDEEP S. BHANDARI, SUSAN BLOCK-LIEB, ROBERT D’AGOSTINO, KENNETH N. KLEE, GEORGE W. KUNEY, JONATHAN C. LIPSON, LOIS LUPICA, RALPH R. MABEY, C. SCOTT PRYOR, MICHAEL D. SOUSA, AND ROBERT M. ZINMAN RICHARD LIEB Research Professor of Law ST. JOHN'S UNIVERSITY ye pi SCHOOL OF LAW moe 8000 Utopia Parkway Jamaica, New York 11439 (212) 479-6020 or (718) 990-1923 Counsel of Record for Amici Curiae Dated: October 16, 2009 TABLE OF CONTENTS PAGE TABLE OF AUTHORITIES ...................... iv INTEREST OF AMICI CURIAE................. 1 SUMMARY OF ARGUMENT ..................... 2 1. Summary of the res judicata EE nrcdndeds cd ccennnnnatensenneersne 3 2. Summary of the argument based kin od cdo eNScsedenidineeses 5 POINT I. PETITIONER’S CLAIM IS BARRED BY RES JUDICATA, WHICH PRECLUDES A CHALLENGE TO A CONFIRMATION ORDER IN A POST-CONFIRMATION PROCEEDING IN THE SAME os ge! ene 6 A. Travelers v. Bailey Bars Collateral Attack of Confirmation Orders in the Same Bankruptcy Case ................ 6 B. The Finality of Confirmed Plans Ensures the Efficient Administration of the Bankruptcy Process............ 10 PAGE POINT II. EVEN IF RES JUDICATA WERE HELD NOT TO BAR AN ATTACK ON A PROVISION OF A CONFIRMATION ORDER FOR LACK OF JURISDICTION OR SUBSTANTIVE POWER OF A BANKRUPTCY COURT, THE STUDENT LOAN PROVISIONS AND F. R. BANKR. P. 7001(6) ARE NON-JURISDICTIONAL AND DO NOT VOID THE ORDER. A CREDITOR FORFEITS NON-JURISDIC- TIONAL OBJECTIONS BY NOT RAISING THEM AT THE CONFIRMATION STAGE, AND THUS CANNOT RAISE THEM Fe IN han 060.6066 cees ch cen eidcepenes 12 A. The Student Loan Provisions of §§ 523(a)(8) and 1328(a)(2) Are Not Jurisdictional In Light of the “Readily Administrable Bright Line” Test Set Forth In Arbaugh v. Y & H Corp., Requiring That To Be Jurisdictional A Statute Must, By Its Own Text, Clearly Evidence Congress’ Intent To Implicate the Bankruptcy Court's Subject Matter EE 55056486 0 arnsGasonecssacesss 14 B. F. R. Bankr. P. 7001(6) is a Non- Jurisdictional Claims Processing Rule Under the Court's Decision in Kontrick i 66.05 40445055540090 50 nH Oke ESN dee es 18 iii PAGE C. Concepts of Finality and Repose Dictate that a Creditor Who Fails To Object Prior to Confirmation of a Chapter 13 Plan Forfeits Its Right To Later Object That the Plan Was Erroneously Confirmed................ 20 POINT IIL. A PROVISION OF A CONFIRMED CHAPTER 13 PLAN TIAT DISCHARGES STUDENT LOAN DEBT IS BINDING AND EFFECTIVE BY VIRTUE OF BANKRUPTCY CODE § 1327(a) WHERE THE CREDITOR HOLD- ING THE CLAIM (1) RECEIVED ADEQUATE NOTICE OF TIIE PROPOSED PLAN AND THE PROCEEDING FOR ITS CONFIRMA- TION, AND (2) CHOSE NOT TO OBJECT... — 23 Es acakcuneeketet neta snenseconaieweries 30 iv TABLE OF AUTHORITIES Cases: Arbaugh v. Y & H Corp., 546 U.S. 500 (2006)............. sacnsenteups Caminetti v. United States, 242 U.S. 470 (1917) ......cccecceecccecceecees Chicot County Drainage Dist. v. Baxter State Bank, 308 U.S. 371 (1940)........... City of Sherrill v. Oneida Indian Nation, Pe Se EE b envdiesnccccccncncedacecce Eberhart v. United States, 546 U.S. 12 (2006).............cccceceeeeeees El Paso Natural Gas Co. v. Neztsosie, 541 U.G. 478 (IGG) ........0cccecccccccccsees Federated Dept. Stores, Inc. v. Moitie, SE i Se ED ob ccdcnskddduncecssconsses Hart Steel Co. v. Railroad Supply Co., OO0 UM. GPG CAOET) «2.5.5.5 .csccce...e.0ce. Hartford Underwriters Insurance Co. v. Union Planters Bank, N.A., cdr nbdeassecoacnsedcccecses PAGE In re American Preferred Prescriptions, Inc., 200 F.0d S7 (20 Cir. 2001)................... In re Chicago, Milwaukee, St. Paul & Pac. R.R. Co., 891 F.2d 159 (7th Cir. 1989)..... In re Continental Airlines, Inc., 91 F.3d 553 (3d Cir. 1996) “ee ee ee ee eee eee passim 24 27 28 PAGE In re County of Orange, 219 B.R. 543 fh Ee lg ee ere 27 In re Mersmann, 505 F.3d 1033 Ot I i ae i de ee eeeee 15 In re Metromedia Fiber Network, Inc., 416 F.3d 136 (2d Cir. 2005) ...........000... 26 In re Optical Technologies, Inc., 425 F.3d 1294 (1lith Cir. 2005) ............. i) In re Penn-Dixie Industries, Inc., 32 B.R. 173 (Bankr. S.D.N.Y. 1983)........ 27 In re Public Serv. Co., 963 F.2d 469 COO Sa BP bho ccdcacseccuconcuenicossaunens 29 In re Roberts Farms, 652 F.2d 793 SY Gs: SED a cncundvsanenccadssesexenend dues 29 In re Trusted Net Media Holdings, 550 F.3d 1035 (11th Cir. 2008) ..... 14, 15, 16, 17 In re Watkins, 240 B.R. 735 fo ee Te 27 Kontrick v. Ryan, 540 U.S. 443 CED 6 de4sdedesndseseunekunonueds 13, 15, 19, 20, 21 Rubin v. Belo Broad. Corp., 769 F.2d 611 (9th Cir. 1985) ................ 16 Schacht v. United States, 398 U.S. 58 (1970) .. 19 Stoll v. Gottlieb, 305 U.S. 165 (1938)..... 6, 7, 11, 28 Tennessee Student Assistance Corp. v. Hood, BSE ED. GO Ce cenncccccenssescviseenses 18 PAGE Travelers Indemnity Company v. Bailey, __ U.S. _., 129 S.Ct. 2195 (2009) ......... passim United States v. Ron Pair Enterprises, Inc., IED 5 cocens Gecccceneseseccosss 24 Washington, A. & G. Steam Packet Co. v. Sickles, 65 U.S. 333 (1860) ................. 22 Willy v. Coastal Corp., 503 U.S. 131 (1992).. 10 Young v. United States, 535 U.S. 42 (2002) .. 22 Zipes v. Trans World Airlines, Inc., re 16 Statutes: Bai kruptcy Code § 303(b) ...................... 17 Bankruptcy Code § 523(a)(8) ................. passim Bankruptcy Code § 524(e)....................... 27 Bankruptcy Code § 546(a)....................... 18 Bankruptcy Code § 90l(a)....................... 27 Bankruptcy Code § 944(a) .................... 5, 23, 28 Bankruptcy Code § 1104(a)..................... 27 Bankruptcy Code § 1123(a)(4).................. 27 Bankruptcy Code § 1129(a)(9).............0.... 27 Bankruptcy Code § 114l(a)...............5, 23, 25, 28 Bankruptcy Code § 1141(d)(2) ................. 25 Bankruptcy Code § 1225(a)......................27, 28 PAGE Bankruptcy Code § 1227(a) ................. 23, 25, 28 Bankruptcy Code § 1228(a) ..................05 25 Bankruptcy Code § 1324 ......................0, 20, 21 NEE NE CID ©] BGS occccccsccccccccccccses passim Bankruptcy Code § 1328(a).................... passim Ey GUND © BOs occ cect ncccsccecsccevcs 24 Te OUD nevnttnncd cease sees vandaneteetsencses 15 I T-TT sie ches saeiinbathesushnnnekeaassin 13, 15 EE, Ce an cdscascnsceee scan entaened 13, 15, 19, 21 te CE 46 encscdeieemisiendsasnendihanine 20 Pub. L. No. 696, ch. 575, § 657, 52 Stat. 840 .. (1938) (repealed 1978) ..................... 25 Rules: ie Le MR nics ccuhucscacncennccecpensctly meee a oe ne... + sisehaniunannesdadtancasee 21 ee Oe | rrr rrr rr ree passim Pe Site Es OG ND canna cccesscccccnevsenssntens 21 ie: ee SE OG EE co cencnwnsenecesvscedessecsees 20 PA Tile ee We a 6c be cisccccssbensecesceces 13 Other Authorities: 2 COLLIER ON BANKRUPTCY, 4 303.02 and 9 303.08[2] (Allen N. Resnick et al. I aad 18 vill 5 COLLIER ON BANKRUPTCY, 9] 546.02[4] (Allen N. Resnick, et al. eds., RS i 8 COLLIER ON BANKRUPTCY, 9 1327.02| 1] [c] (Allen N. Resnick et al. eds., Sr ee 4 KEITH M. LUNDIN, CHAPTER 13 BANKRUPTCY, § 346.1(3d ed. 2000 & Supp. 2004)......... CHARLES A. WRIGHT, ARTHUR R. MILLER, ET AL. FEDERAL PRACTICE & PROCEDURE, § 4403 tt eck cekiged deteabadeoeswesenens George W. Kuney, Slipping Into Mootness, 2007 ANN. SURV. BANKR. LAW, ART 9, 267.. PAGE 18 ’ 22 29 INTEREST OF AMICI CURIAE' The Amici Curiae are law professors who have devoted their careers to the study and teaching of bankruptcy law.* They are deeply interested in the outcome of this appeal, not only for its effect on debt restructuring cases under chapter 13 of the Bankruptcy Code,’ but also because of its potential impact on cases for reorganization under chapters 9, 11 and 12 of the Bankruptcy Code. The Amici file this brief in order to underscore the fundamental importance for both debtors and the creditor body to uphold the finality of confirmation orders under chapters 9, 11, 12, and 13, and to bar attacks upon such orders by creditors who choose not to object : The Amici file this brief with the written consent of all parties. No counsel for a party has authored this brief in whole or in part. No person or entity, including the Amici or their counsel, made a monetary contribution for the preparation or submission of this brief; it has been prepared pro bono. : The Amici are Richard Aaron, Professor of Law at Uni- versity of Utah-S.J.Quinney College of Law; Jagdeep S. Bhan- dari, Professor of Law at Florida Coastal Law School; Susan Block-Lieb, Professor of Law at Fordham Law School; Robert D’ Agostino, Professor of Law at John Marshall Law School; Ken- neth N. Klee, Professor of Law at UCLA School of Law; George W. Kuney, Professor of Law at University of Tennessee College of Law; Jonathan C. Lipson, Professor of Law at Temple Uni- versity-James E. Beasley School of Law; Lois Lupica, Professor of Law at University of Maine Schoo! of Law; Ralph R. Mabey, Professor of Law at University of Utah-S.J.Quinney College of Law; C. Scott Pryor, Professor of Law at Regent University School of Law: Michael D. Sousa, Professor of Law at University of Denver-Sturm College of Law; and Robert M. Zinman, Pro- fessor of Law at St. John’s University School of Law. J Title 11 of the United States Code is hereinafter referred to as the Bankruptcy Code. 2 to them during proceedings for confirmation, whether the subsequent challenge to the confirma- tion order is based on subject matter jurisdictional] or substantive bankruptcy law claims. The Amici support the Respondent’s analysis upholding the confirmation order and the Respon- dent’s discharge of student loan debt, and offer addi- tional grounds in support of that result. They urge that the Court’s holding four months ago in Travel- ers Indemnity Company v. Bailey, ___ U.S. ___, 129 S.Ct. 2195, 2205 (2009), is controlling. There, the Court held that the doctrine of res judicata barred creditors in a subsequent proceeding in the same reorganization case from challenging an earlier con- firmation order, and ruled that provisions of a con- firmation order could not be later attacked, whether or not the order constituted a proper exercise of bankruptcy court jurisdiction or of its substantive bankruptcy law power. The Amici urge the Court to hold that a creditor who chooses to remain silent at the confirmation stage after receiving adequate notice that a proposed chapter 13 plan will dis- charge student loan debt, is barred by res judicata from challenging the confirmation order in a later proceeding in the same bankruptcy case. SUMMARY OF ARGUMENT The Amici urge two independent bases for upholding the confirmation order and discharge at issue: First: A collateral attack on a confirmation order is barred by res judicata even if it is predicated cither on a claimed lack of subject matter jurisdic- tion or of substantive power of the bankruptcy 3 court. Such a post-confirmation collateral challenge is barred, whether made in the same bankruptcy case or in another case. Moreover, the Amici urge that §§ 523(a)(8) and 1328(a)(2) of the Bankruptcy Code (the “Student Loan Provisions”) and F. R. Bankr. P. 7001(6) are not jurisdictional in nature, and that the violation of or non-compliance with those provisions does not void an order. Second: By reason of Bankruptcy Code § 1327(a), each creditor is bound by the discharge provision of a confirmation order to which it did not object after receiving adequate notice of the proposed plan and an opportunity to assert its objection to such pro- vision. 1. Summary of the res judicata argument: The doctrine of res judicata applies in a subsequent pro- ceeding in the same bankruptcy case. Each of the elements for applicability of the doctrine of res judicata is satisfied in this case. Petitioner was served with adequate notice of the confirmation pro- ceeding and of the proposed plan’s provision for the discharge of student loan debt, and thereby became a party to that proceeding. It had a full opportunity for a hearing on any objection to confirmation that it might interpose. Bankruptcy Code § 1324(a); F. R. Bankr. P. 2002(b). Moreover, Petitioner was expressly warned that its rights could be impaired by the proposed plan. Nevertheless, it failed to object to confirmation or to appeal from the order confirming the plan. As such, the confirmation order became final and binding on all parties under Bankruptcy Code § 1327(a). Petitioner was thus barred by res judicata from raising its claims in Respondent's post-confirmation proceeding to con- firm his discharge. 4 Res judicata is a foundational doctrine of the law, designed to provide certainty for the parties and reliability for the judicial system. The doctrine is of prime importance not only in chapter 13 debt restructuring cases, but also in bankruptcy reorga- nization cases under chapters 9, 1l and 12. Oncea plan has been confirmed, a creditor who receives adequate notice of the confirmation hearing but chooses not to object to confirmation or to appeal the confirmation order, is barred by res judicata from attacking the confirmation order on any ground, whether the challenge is based on an asserted lack of subject matter jurisdiction or sub- stantive power of the bankruptcy court. These prin- ciples were made clear by the Court in Travelers v. Bailey, which the Amici urge is controlling. Under the Court’s holding in that case, Petitioner’s attack on the confirmation order must fail. In Travelers v. Bailey, the Court held that a cred- itor was barred by res judicata from challenging a confirmation order in a post-confirmation proceed- ing in the same bankruptcy case. Although the doc- trine of res judicata has long been applied to bara subsequent challenge asserted in a different case, Travelers v. Bailey applied the doctrine to an attack ona confirmation order made in a proceeding in the same bankruptcy case in which the confirmation order had been issued. As ruled by 7ravelers v. Bailey, all attacks, whether made by a post-confirmation proceeding filed in the same bankruptcy case or ina different case in a non-bankruptcy court, constitute collateral attacks made impermissible by the doc- trine of res judicata. The Court made clear in that case that the basic reason for the doctrine is to pro- vide finality for confirmation orders. 5 Travelers v. Bailey, moreover, also makes clear that the doctrine of res judicata applies to bar all claims, whether based on an asserted lack of juris- diction for a provision of the confirmation order or a lack of substantive power of the bankruptcy court. Thus, even if the Student Loan Provisions were viewed as jurisdictional or beyond the power of the bankruptcy court, which Amici believe they are not, res judicata precludes a challenge to a confirmation order based on them. Petitioner’s fundamental posi- tion on this appeal never comes to grips with the impact of res judicata, and does not address or even cite the Court's decision in Travelers v. Bailey. Petitioner also argues that the bankruptcy court lacked the jurisdiction to confirm a plan for dis- charge of student loan debt without an undue hard- ship determination made in an adversary proceeding pursuant to F. R. Bankr. P. 7001(6). That contention is likewise flawed because that provision cannot be viewed as jurisdictional in nature in light of deci- sions of this Court and F. R. Bankr. P. 9030. 2. Summary of the argument based on § 1327(a). Independent of the bar of res judicata, the Amici urge that a challenge to a discharge of a student loan debt provided for by a confirmed chapter 13 plan cannot be made because of § 1327(a) of the Bankruptcy Code. Section 1327(a), like its analogue in chapters 9, 11 and 12 (set forth in Bankruptcy Code §§ 944(a), 1141(a), and 1227(a)), states that, “the provisions of a confirmed plan. . .bind. . cach creditor, . . . whether or not such creditor has objected to... the plan.” The plain text of § 1327(a) should be applied as written. Congress has been both clear and emphatic in the language it chose for $ 1327(a) to make all provisions of a confirmed plan 6 binding on each creditor. To allow a creditor’s post- confirmation attack on the confirmation order would require the Court to disregard that statute. That statute makes no exception for provisions of any type. Thus, no provision of a confirmed plan may be attacked by a creditor after confirmation if the creditor has not objected to the plan proposed for confirmation or appealed the confirmation order. POINT I PETITIONER’S CLAIM IS BARRED BY RES JUDICATA, WHICH PRECLUDES A CHALLENGE TO A CONFIRMATION ORDER IN A POST-CONFIRMATION PROCEEDING IN THE SAME BANKRUPTCY CASE The doctrine of res judicata bars all post-confir- mation objections to a confirmed plan. The Court left no doubt about the total bar of the doctrine of res judicata by its broad and unqualified language in Travelers v. Bailey, 129 S.Ct. 2195, decided scarcely four months ago. Travelers v. Bailey is controlling. A. Travelers v. Bailey Bars Collateral Attack of Confirmation Orders in the Same Bank- ruptcy Case Under the doctrine of res judicata, “a final judg- ment on the merits of an action precludes the par- ties or their privies from relitigating issues that were or could have been raised in that action.” Federated Dept. Stores, Inc. v. Moitie, 452 U.S. 394, 398 (1981). A bankruptcy court's order confirming a plan of reorganization is a final order entitled to res judi- cata effect. Stoll v. Gottlieb, 305 U.S. 165, 171-72 7 (1938). Res judicata precludes a collateral attack upon a confirmation order even when the bank- ruptcy court entering the order lacked subject mat- ter jurisdiction to do so. Chicot County Drainage Dist. v. Baxter State Bank, 308 U.S. 371, 376 (1940). The Court’s prohibition on the collateral attack of confirmation orders has usually arisen in response to post-confirmation objections raised outside the debtor’s bankruptcy case in an action brought in a non-bankruptcy court. See e.g., Stoll v. Gottlieb, 305 U.S. 165 (applying res judicata to preclude collat- eral attack of confirmation order in Illinois state court action); Chicot County Drainage District v. Baxter State Bank, 308 U.S. 371 (applying res judi- cata to preclude collateral attack of confirmation order in United States district court). In Travelers v. Bailey, the Court held that res judicata also pre- cludes collateral attack upon a confirmation order in a later proceeding in the same bankruptcy case. Travelers v. Bailey, 129 S.Ct. at 2206. The circumstances in the present case regarding res judicata mirror those in Travelers v. Bailey. In Travelers v. Bailey, the Court granted certiorari to review whether the Court of Appeals had erro- neously held, in a post-confirmation proceeding in the chapter 11 bankruptcy case of Johns-Manville Corporation, that the bankruptcy court did not have subject matter jurisdiction to issue a confirmation order enjoining the prosecution of claims against non-debtors that did not directly affect the res of the bankruptcy estate. The Court, however, did not decide the issue for which it had granted certiorari in that case. Trav- elers v. Bailey, 1298S. Ct. at 2207. Instead, the Court determined the appeal on the basis of the paramount 8 importance of the doctrine of res judicata, holding that res judicata barred the post-confirmation attack in Manville’s bankruptcy case on the injunc- tion included in the confirmation order. In the pre- sent case, certiorari was granted to review whether a chapter 13 confirmation order erroneously con- firmed a plan that provided for the discharge of stu- dent loan debt without a determination of undue hardship, and to consider a related notice issue. Here, as in Travelers v. Bailey, the attack on the confirmation order was made in a subsequent pro- ceeding in the bankruptcy case. As in Travelers v. Bailey, the Court in the present case should not address the substantive issue it accepted for review, but instead should bar Petitioner’s attack on the confirmation order on the basis of res judicata. In Travelers v. Bailey, a plan of reorganization providing for the treatment of massive asbestos related personal injury claims, was confirmed. Years after confirmation of Manville’s plan of reorganiza- tion, certain asbestos-injured claimants brought law- suits in state courts across the country against Petitioner, who was Manville’s insurer. Petitioner then brought a proceeding within Manville’s bank- ruptcy case for an interpretation that the injunctive provision built into the confirmation order was intended to bar those lawsuits. The Court of Appeals for the Second Circuit held that the bankruptcy court lacked subject matter jurisdiction to grant the injunction. The Court reversed. Under the Court’s ruling, it did not matter whether or not the bankruptcy court lacked subject latter jurisdiction or power to issue the order, holding that under either circumstance the later attack on the order in the same bankruptcy 9 case was barred by res judicata. The Court made it crystal clear that res judicata bars all post-confir- mation challenges to confirmation orders. As stated by the Court: “[O]nce the 1986 orders became final on direct review (whether or not [they were] proper exercises of bankruptcy court jurisdiction and power), they became res judicata,” and the Court barred the assertion of any matter that could have been raised in the proceeding for confirmation in opposition to the provision in question. Travelers v. Bailey, 129 S. Ct at 2205 (emphasis added). The Court went on to state: So long as respondents or those in privity with them were parties to the Manville bankruptcy proceeding, and were given a fair chance to challenge the Bankruptcy Court’s subject-matter jurisdiction [to issue the injunction incorpo- rated into the confirmation order], they cannot challenge it now [in the subsequent proceeding for an interpretation of the scope of that provi- sion] by resisting enforcement of the 1986 Orders. Id. at 2206. The Court’s broad view of res judicata and its importance is unmistakably clear: The willingness of the Court of Appeals to entertain this sort of collateral attack cannot be squared with res judicata and the practical necessity served by that rule. Id. at 2206 (citing, inter alia, In re Optical Tech- nologies, Inc., 425 F.3d 1294, 1308 (11th Cir. 2005) (barring collateral attack of confirmation order in later proceeding in same bankruptcy case and not- ing that if “courts could evaluate the jurisdiction 10 that they may or may not have had to issue a final judgment, the rules of res judicata . . . would be entirely short-circuited.” )). Like the unsuccessful respondents in Travelers v. Bailey, Petitioner in the present case seeks to attack a confirmation order in a subsequent pro- ceeding in the same bankruptcy case, essentially claiming a lack of jurisdiction. Even if jurisdiction were lacking, Travelers v. Bailey is controlling to bar Petitioner’s attack. See Travelers v. Bailey, 129 S. Ct. at 2206 (“[T]his sort of collateral attack can- not be squared with res judicata. .. .”). The fact that Respondent commenced the instant proceedings by reopening the chapter 13 case in order to bring his proceeding to reconfirm the dis- charge of his student loan debt does not change the impermissible nature of Petitioner’s attack on the confirmation order. See id. at 2206 n.7 (“Respon- dents point out that it is Travelers, not they, who moved the Bankruptcy Cotrt to enforce the 1986 Orders. But who began the present proceedings has no bearing on the application of res judicata . . .”). Based ona straightforward application of Travelers v. Bailey, Petitioner's post-confirmation attack on the confirmation order is barred by the doctrine of res judicata. B. The Finality of Confirmed Plans Ensures the Efficient Administration of the Bank- ruptcy Process The finality of confirmed plans and the prohibi- tion on their collateral attack reflects a strong pol- icy in favor of bringing an end to litigation. See Willy v. Coastal Corp., 503 U.S. 131, 137 (1992) (“[T]he practical concern with providing an end to litigation 11 justifies a rule preventing collateral attack on sub- ject-matter jurisdiction”); Stoll v. Gottlieb, 305 U.S. at 172 (“It is just as important that there should bea place to end as that there should be a place to begin litigation.”); see also Federated Dept. Stores, Inc. v. Moitie, 452 U.S. at 401 (overturning Ninth Circuit anti-trust decision for failure to apply res judicata and noting that “[the] doctrine of res judicata is not a mere matter of practice or procedure inherited from a more technical time than ours. It is a rule of fundamental and subst«ntial justice, of public policy and of private peace, which should be cordially regarded and enforced by the courts. . . .”) (citing Hart Steel Co. v. Railroad Supply Co., 244 U.S. 294, 299 (1917) (internal quotation marks omitted)). The finality of confirmed plans is just as impor- tant in chapter 13 cases as it is in epic asbestos cases like that at issue in Travelers v. Bailey. The sound administration of the bankruptcy law requires that the provisions of plans of reorganization and for debt adjustment be immune from challenge once the plan has been confirmed and the appeal period has expired. When such plans have been confirmed without objection, the debtor and creditors must be able to rely on their finality. Confirmation orders are at the heart of recrganization and debt adjustment bankruptcy cases, and the bankruptcy system could not function if a confirmation order could be upset in a later proceeding. Credit is extended to the reor- ganized debtor and other relationships are formed in reliance on the finality of confirmation orders. Par- ties to debt adjustment and reorganization cases must be confident that their conduct in reliance on court-ordered confirmation will not be undercut by later attacks on the confirmed plan. 12 POINT II EVEN IF RES JUDICATA WERE HELD NOT TO BAR AN ATTACK ON A PROVISION OF A CONFIRMATION ORDER FOR LACK OF JURISDICTION OR SURSTANTIVE POWER OF A BANKRUPTCY COURT, THE STUDENT LOAN PROVISIONS AND F. R. BANKR. P. 7001(6) ARE NON-JURISDICTIONAL AND DO NOT VOID THE ORDER. A CREDITOR FORFEITS NON-JURISDICTIONAL OBJEC- TIONS BY NOT RAISING THEM AT THE CONFIRMATION STAGE, AND THUS CAN- NOT RAISE THEM THEREAFTER Petitioner contends that the order providing for the discharge of Respondent’s student loan debt is void. Petr’s Br. 31-32. To support its “voidness” claim, Petitioner asserts that the bankruptcy court lacked the power to enter a confirmation order with a provision for the discharge of student loan debt in contravention of §§ 523(a)(8) and 1328(a)(2) and F. R. Bankr. P. 7001(6). As demonstrated in Point I, res judicata bars a challenge to a confirmation order for lack of subject matter jurisdiction or substantive power of the bankruptcy court. Because a confir- mation order is made fully effective by the doctrine of res judicata despite a lack of subject matter jurisdiction, it obviously cannot be “void.” Moreover, if a collateral attack upon a confirmation order can- not be based on a claimed lack of subject matter jurisdiction, then such an attack surely cannot be sustained on the basis of non-jurisdictional errors of law in the issuance of such an order. In that regard, §§ 523(a)(8) and 1328(a)(2) and F. R. Bankr. P. 7001(6) are non-jurisdictional in nature. They are 13 substantive and procedural bankruptcy law provi- sions, noncompliance with which does not render an order void. It is fundamental that the remedy to cor- rect an error of law is to object and appeal if nec- essary. Title 28 of the United States Code provides the bankruptcy courts, by referral from the district courts, with jurisdiction to enter confirmation orders and grant discharges. 28 U.S.C. § 157(a) and § 1334(b). Sections 523(a)(8) and 1328(a)(2) do not limit the scope of the bankruptcy court’s jurisdic- tion. Those statutes are not jurisdictional under the governing test provided by the Court in Arbaugh v. Y & H Corp., 546 U.S. 500 (2006). To be jurisdic- tional under the Arbaugh test, a statute must itself clearly manifest Congressional intent to implicate the subject matter jurisdiction of the court. Fur- thermore, F. R. Bankr. P. 7001(6) is a non-jurisdic- tional claims processing rule under the Court’s decision in Kontrick v. Ryan, 540 U.S. 443 (2004). In the present case, the bankruptcy court had jurisdiction to enter a confirmation order, including its arguably erroneous provision for the discharge of student loan debt. Neither the Student Loan Provi- sions nor F. R. Bankr. P. 7001(6) abrogate that juris- diction. Because the bankruptcy court had subject matter jurisdiction to issue the confirmation order, that order cannot be considered to be void, and thus is not subject to an attack predicated on F. R. Civ. P. 60(b)(4). Any interest Petitioner had in avoiding the provision for the discharge of its claim set forth in the confirmed plan is overridden by the need for finality and repose expressed in the doctrine of res judicata, as well as by § 1327 of the Bankruptcy 14 Code and the Court’s decisions in Kontrick v. Ryan and Arbaugh. A. The Student Loan Provisions of §§ 523(a)(8) and 1328(a)(2) Are Not Jurisdictional In Light of the “Readily Administrable Bright Line” Test Set Forth In Arbaugh v. Y & H Corp., Requiring That To Be Jurisdictional A Statute Must, By Its Own Text, Clearly Evidence Congress’ Intent To Implicate the Bankruptcy Court’s Subject Matter Juris- diction Sections 523(a)(8) and 1328(a)(2) of the Bank- ruptcy Code are not jurisdictional under the test delineated by the Court in Arbaugh v. Y & H Corp., 546 U.S. at 515-516, as applied by the Eleventh Cir- cuit in Jn re Trusted Net Media Holdings, 550 F.3d 1035, 1039 (11th Cir. 2008). In determining the juris- dictional nature of a statute, the Court instructed the lower courts in the following manner: If the Legislature clearly states that a threshold limitation on a statute’s scope shall count as jurisdictional, then courts and litigants will be duly instructed and will not be left to wrestle with the issue. But when Congress does not rank a statutory limitation on coverage as juris- dictional, courts should treat the restriction as non-jurisdictional in character. Arbaugh, 546 U.S. 500, 515-516 (emphasis added) (citations omitted). The Court has called this approach a “readily administrable bright line” test. Id. at 516. Petitioner's argument that the bankruptcy court lacked jurisdiction to confirm a plan for the dis- charge of student loan debt, is flawed. It is predi- 15 cated on Petitioner’s erroneous reliance on cases which pre-date Arbaugh, except for one case, Jn re Mersmann, 505 F.3d 1033 (10th Cir. 2007), which failed to apply or even cite Arbaugh. See Petr’s Br. 31-32. Instead, under the “readily administrable bright line” test, the Student Loan Provisions are not jurisdictional because Congress did not “clearly state” that they were jurisdictional in nature. A brief discussion of the jurisdiction of bank- ruptcy courts is warranted in order to fully under- stand the scope of their power. Similar to the other provisions in the Bankruptcy Code, §§ 523(a)(8) and 1328(a)(2) are substantive law provisions for bankruptcy cases. However, the subject matter juris- diction of the bankruptcy courts is governed by 28 U.S.C. § 1334, not by the Bankruptcy Code codified by Title 11. In re Trusted Net Media Holdings, 550 F.3d at 1039 (citing Kontrick v. Ryan, 540 U.S. at 453). Title 28 provides that the “district courts shall have original and exclusive jurisdiction of all cases under title 11 [Bankruptcy Code},” and “original but not exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or related to cases under title 11.” 28 U.S.C. § 1334(a)-(b) (empha- sis added)). Pursuant to §§ 151 and 157 of Title 28, bankruptcy court jurisdiction to adjudicate “core proceedings” exists by reference from the district courts to the bankruptcy judges for the district, including “core” jurisdiction for “confirmations of plans” and “objections to discharges.” 28 U.S.C. § 157(b)(2)(J), (L). The Student Loan Provisions and F. R. Bankr. P. 7001(6), however, do not abrogate such jurisdiction of the bankruptcy courts because the “clearly states” requirement of Arbaugh is absent from those provisions. Indeed, those provi- sions contain no language suggesting that Congress 16 intended them to be jurisdictional. They thus are not jurisdictional in nature. The issue in Arbaugh was whether Title VII's requirements that an employer have fifteen or more employees affected subject matter jurisdiction or, instead, related only to the substantive adequacy of a Title VII plaintiff’s claim for relief, and thus could not be raised for the first time post-trial. Arbaugh, 546 U.S. at 503-04. The Court held that “the thresh- old number of employees for application of Title VII is an element of a plaintiff's claim for relief, not a jurisdictional issue.” Jd. at 515 (emphasis added). The Court reasoned that the “15-employee thresh- old” requirement did not “speak in jurisdictional terms or refer in any way to the jurisdiction of the district courts.” /d. at 510 (citing Zipes v. Trans World Airlines, Inc., 455 U.S. 385, 394 (1982)). Therefore, defendant forfeited his right to object on the basis of this defense and could not raise the issue after the entry of judgment. Arbaugh, 546 U.S. at 510. Following the Supreme Court’s decision in Arbaugh, the Eleventh Circuit, in 7rusted Net Media Holdings, followed the “readily administrable bright line” test to determine whether provisions in the Bankruptcy Code are jurisdictional. The court in Jn re Trusted Net Media Holdings considered whether the number of creditors and the amounts of claims of creditors required to file an involuntary petition under § 303(b) was jurisdictional or were elements simply constituting “‘substantive matters which must be proved or waived for petitioning creditors to prevail in involuntary proceedings.’” Jn re Trusted Net Media Holdings, 550 F.3d at 1041 (quot- ing Rubin v. Belo Broad. Corp., 769 F.2d 611, 614 n. 17 3 (9th Cir. 1985)). The Court held that § 303(b) is not jurisdictional because Congress did not include jurisdictional language in the statute and that there was no congressional intent to implicate the bankruptcy court's subject matter jurisdiction. In re Trusted Net Media Holdings, 550 F.3d at 1043. Fur- ther, § 303(b) never makes an explicit or implicit ref- erence to its requirements being jurisdictional and never used the word “jurisdiction.” Jd. Rather, the Court explained that the Bankruptcy Code provision at issue merely states that a case “is commenced against a person by the filing with the bankruptcy court of a petition under chapter 7 or 11” by the req- uisite number of persons holding the requisite claims. Id. In sum, under the reasoning set forth in Jn re Trusted Net Media Holdings, which applied the Arbaugh test, the Student Loan Provisions are not jurisdictional for a number of reasons. First, Congress did not “clearly state” any words consti- tuting jurisdictional language in §§ 523(a)(8) and 1328(a)(2). Further, under Trusted Net’s analysis, the “undue hardship” requirement in the Student Loan Provisions is an element that merely relates to substantive matters which must be proved, and an objection based on a lack of such proof is forfeited by a failure to make it at the confirmation stage. Jd. at 1041. The Bankruptcy Code creates the substan- tive rights and obligations of both debtors and cred- itors, and in this case, Petitioner forfeited its rights under the Student Loan Provisions. See, e.g., In re Trusted Net Media Holdings, 550 F.3d at 1041; see also Point Il. B infra. Moreover, Jn re Trusted Net Media Holdings is not cited in Petitioner's brief even though it is a Cir- 18 cuit Court case that applies the Court’s test in Arbaugh, and a leading treatise states that the “bet- ter view” is that Bankruptcy Code provisions are not jurisdictional. See 5 COLLIER ON BANKRUPTCY, 9546.02[4] (Allen N. Resnick et al. 15th ed. rev. 2006) (stating that the “better view” is that § 546(a) is non-jurisdictional); 2 COLLIER ON BANKRUPTCY, q 303.08[2] (stating that the better argument is that § 303(b) may be waived; and 9 303.02 (stating that § 109(a)’s requirements for a person to be a debtor under the Bankruptcy Code, may be waived) (Allen N. Resnick et al. 16th ed. (2009). Further, Peti- tioner’s brief does not even mention Arbaugh. In enacting the Student Loan Provisions, Congress merely indicated that in order for a student debt to be dischargeable, undue hardship should be proven, and that a manner in which it is demonstrated is by commencing an adversary proceeding. However, there is no language in the Bankruptcy Code which makes such a procedure jurisdictional and manda- tory, nor anything which precludes a forfeiture of the right to object bascd on the failure to bring an adversary proceeding. See 4 KEITH M. LUNDIN, CHAP- TER 13 BANKRUPTCY, § 346.1, at 346-33 (3d ed. 2000 & Supp. 2004) (citing Tennessee Student Assistance Corp. v. Hood, 541 U.S. 440, 453-54 (2004)). It is clear that the Student Loan Provisions are not jurisdictional, and Petitioner forfeited its rights thereunder by not asserting them at the confirma- tion stage. B. F. R. Bankr. P. 7001(6) is a Non-Jurisdic- tional Claims Processing Rule Under the Court’s Decision in Kontrick v. Ryan Nothing in F. R. Bankr. P. 7001(6) implicates the jurisdiction of the bankruptcy courts. Non-compli- 19 ance with Rule 7001(6) does not void a judgment or order. As discussed in Section Il. A, Congress con- ferred jurisdiction on the bankruptcy courts over proceedings for confirmation of plans and dis- charges of debts under §$§ 1334(b), 157(b)(1)(J),(L) of Title 28 of the United States Code. F. R. Bankr. P. 9030 prevents the Bankruptcy Rules from being con- strued to expand or limit the jurisdiction of the bankruptcy courts. The confirmation order for the discharge of Petitioner's student loan debt was not void because entry of the order was within the sub- ject-matter jurisdiction of the bankruptcy court as prescribed by Congress. The Court recently underscored the non-jurisdic- tional nature of the Bankruptcy Rules in Kontrick v. Ryan, 540 U.S. at 447. The Court there noted that courts have been “less than meticulous” in their characterization of rules as “jurisdictional,” and reaffirmed that “{o]nly Congress may determine a lower federal court’s subject-matter jurisdiction.” Jd. at 452-53. Procedural rules promulgated by the Court for bankruptcy cases, on the other hand, are claims processing rules which “shall not be con- strued to extend or limit the jurisdiction of the courts.” Id. at 453-54 (quoting F. R. Bankr. P. 9030). These claims processing rules, “even if unalterable on a party’s application, can nonetheless be for- feited if the party asserting the rule waits too long to raise the point.” Kontrick v. Ryan, Id. at 444-45. The Court concluded that F. R. Bankr. P. 4004 was a non- jurisdictional claims-processing rule “adopted by the Court for the orderly transaction of its business .. . 540 U.S. at 447, 454; see also Schacht v. U nited States, 398 U.S. 58, 64 (1970) (*[T}he proce- dural rules adopted by the Court for the orderly transaction of its business are not jurisdictional’ ). 20 Petitioner’s argument that F. R. Bankr. P. 7001(6) requires an adversary proceeding to discharge stu- dent loans under § 523(a)(8) fails to account for the claims-processing nature of procedural rules. An adversary proceeding is not required by statute or the Constitution for discharge of student loan debts. Hood, 541 U.S. at 453-54. To hold that Rule 7001(6) is a jurisdictional requirement, would require the Court to ignore the scope of the authority conferred by Congress by 28 U.S.C. § 2075, which only autho- rizes the promulgation of rules of “practice and pro- cedure” for bankruptcy cases. It would also require the Court to disregard the plain language of F. R. Bankr. P. 9030, which precludes interpreting Rule 7001(6) as a limitation on the jurisdiction of the bankruptcy courts. Petitioner failed to object to Respondent's chapter 13 plan despite receiving notice of the plan confir- mation hearing and notice of the treatment of its claim under the plan. Under Kontrick v. Ryan, by this failure to object, Petitioner forfeited its right to a determination of undue hardship in an adversary proceeding under F. R. Bankr. P. 7001(6). Because Rule 7001(6) is non-jurisdictional in nature, there is no basis for a claim that noncompliance with it voided the confirmation order and discharge. C. Concepts of Finality and Repose Dictate that a Creditor Who Fails To Object Prior to Confirmation of a Chapter 13 Plan For- feits Its Right To Later Object That the Plan Was Erroneously Confirmed The Bankruptcy Code and Bankruptcy Rules gov- erning objections to confirmation of a chapter 13 plan act as claims-processing limitations. See 21 Bankruptcy Code § 1324; F. R. Bankr. P. 2002(b), 3015(d), (f), 9014. Section 1324(a) provides that, “after notice, the court shall hold a hearing on con- firmation of the plan.” A creditor, as a party in inter- est under § 1324, may object to the confirmation. F. R. Bankr. P. 2002 requires that “the debtor, the trustee, all creditors and indenture trustees [receive] not less than 25 days notice by mail of the time fixed. . . for filing objections and the hearing to consider confirmation of a. . . chapter 13 plan.” F. R. Bankr. P. 3015(d) provides that “[a]n objection to confirmation of a plan shall be filed. . . before confirmation of the plan.” (emphasis added). F. R. Bankr. P. 2002(b) and 3015(f) are claims-processing rules. See Kontrick v. Ryan, 540 U.S. at 454 (“In short, the filing deadlines proscribed in [the] Bankruptcy Rules ... are claims-processing rules.”). In the case at bar, compliance with this require- ment was exceeded because Petitioner received more than the required 25 days notice that it had a right to be heard. Petitioner did not object before the confirmation of Respondent’s plan, nor take an appeal from the confirmation order. Petitioner forfeited its right to object to the con- firmed plan once it was confirmed and the time to appeal from the confirmation order expired without an appeal having been taken. This Court has held that a creditor who fails to assert its rights within the time constraints prescribed by the Bankruptcy Rules forfeits its right to later argue that the bankruptcy court’s decision was erroneous. See Kontrick v. Ryan, 540 U.S. at 459 (*Ordinarily, under the Bankruptcy Rules as under the Civil Rules, a defense is lost if it is not [raised].”); see also Eber. 22 hart v. United States, 546 U.S. 12, 19 (2006) (“[C]laims-processing rules thus assure relief to a party properly raising them, but do not compel the same result if the party forfeits them.”). Here, Peti- tioner failed to file any objection to the confirma- tion of Respondent’s chapter 13 plan or to appeal the confirmation order. Therefore, Petitioner for- feited its objection that §§ 523(a)(8) and 1328(a)(2) prohibit a plan from discharging student loan debt without a determination of undue hardship. Peti- tioner likewise forfeited its rights under F. R. Bankr. P. 7001(6). Finally, under the principle of repose, this Court should recognize the finality of confirmation of plans of reorganization and of debt adjustment. “Experience has disclosed, that for the security of rights, and the preservation of the repose of society, a limit must be imposed upon the faculties for liti- gation.” Washington, A. & G. Steam Packet Co. v. Sickles, 65 U.S. 333, 343 (1860); CHARLES A. WRIGHT, ARTHUR R. MILLER, ET AL., FEDERAL PRACTICE & PROCEDURE, § 4403 (3d ed. 1998) (“Repose is the most important product of res judicala.”). The time limitation provision found in F. R. Bankr. P. 2002 “serves the same ‘basic policies [furthered by] all limitations provisions: repose, elimination of stale claims, and certainty about a plaintiff's opportunity for recovery and a defendant’s potential liabilities.’ " Young v. United States, 535 U.S. 42, 48 (2002); see also El Paso Natural Gas Co. v. Neztsosie, 541 U.S. 473, 481-82 (1999) (“[Statutes of limitations are] not there to penalize parties who fail to assert their rights, but [are] meant to protect institutional inter- ests in the orderly functioning of the judicial system _and encouraging repose... .”). As stated by the Court, there is “historic wisdom in the value of 23 repose.” City of Sherrill v. Oneida Indian Nation, 544 U.S. 197, 219 (2005). POINT IIl A PROVISION OF A CONFIRMED CHAPTER 13 PLAN THAT DISCHARGES STUDENT LOAN DEBT IS BINDING AND EFFECTIVE BY VIRTUE OF BANKRUPTCY CODE § 1327(a) WHERE THE CREDITOR HOLD- ING THE CLAIM (1) RECEIVED ADEQUATE NOTICE OF THE PROPOSED PLAN AND THE PROCEEDING FOR ITS CONFIRMA- TION, AND (2) CHOSE NOT TO OBJECT Bankruptcy Code § 1327(a) provides that “[t]he provisions of a confirmed plan bind. . . each cred- itor, whether or not the claim of such creditor is provided for by the plan, and whether or not such creditor has objected to, has accepted, or has rejected the plan.”* (emphasis added). The question is whether the binding effect given by Congress to a confirmation order will be applied as written, or instead, narrowed by implying an exception where the confirmed plan is not in accord with §§ 523(a)(8) and 1328(a)(2). This Court has often stated that when “the statute’s language is plain, the sole function of the courts—at least where the disposition required by the text is not absurd—is to enforce it according to its terms.” Hartford Underwriters Insurance Co. v. Union Planters Bank, N.A., 530 U.S. 1, 6 (2000) (cit- : Similar provisions that bind creditors to confirmed plans are set forth in chapters Y, 11, and 12. See Bankruptcy Code §§ 944(a), 1141(a), 1227(a). 24 ing United States v. Ron Pair Enterprises, Inc., 489 U.S. 235, 241 (1989) (quoting Caminetti v. United States, 242 U.S. 470, 485 (1917))). There is no room in the plain text of § 1327(a) to limit or restrict the binding effect of a confirmed chapter 13 plan by engrafting an exception for plans that discharge student loan obligations without a specific § 523(a)(8) undue hardship determination. Congress explicitly provided in § 1327(a) that con- firmed plans would be binding on creditors, and the clear language of the statute bars post-confirmation objections to all provisions in a confirmed plan.® Congress could not have intended § 1327(a) to be read other than in accordance with its plain text and to upset the finality of confirmation orders issued under any of the chapters of the Bankruptcy Code. In that provision, Congress made its intent clear and unmistakable that all provisions of a confirmed plan bind “each creditor,” including creditors who have not “objected.” Congress emphasized the extent of § 1327(a)’s binding effect on each creditor by pro- viding that each is bound by the plan’s provisions, even if the creditor has “rejected” the plan. Congress’ purpose to preclude all post-confirmation attacks on provisions of confirmed plans, as unam- biguously written into § 1327(a), could not be more clear. No exception to the binding effect of all provi- sions of a confirmed plan was written into § 1327(a). The binding nature of confirmed chapter 13 plans follows the structure under Chapter XII of the for- mer Bankruptcy Act, which also stated that a con- Bankruptcy Code § 1330 authorizes a prompt motion to revoke confirmation, but only for fraud in procuring the con- firmation order. No such motion or claim was made in this case. 25 firmed plan would be binding upon all creditors. See Pub. L. No. 696, ch. 575, § 657, 52 Stat. 840, 935 (1938) (repealed 1978) (“Upon confirmation of a plan, the plan and its provisions shall be binding upon the debtor and upon all creditors of the debtor, whether or not they are affected by the plan or have accepted it or have filed their claims, and whether or not their claims have been scheduled or allowed or are allowable.”). Congress, however, strength- ened the pre-Code provision by adding to § 1327(a) language that expressly makes a confirmed plan binding on creditors who have not “objected.” Congress could have provided an explicit excep- tion in §1327(a). It did not do so. The language found in other chapters of the Bankruptcy Code illu- minates that Congress knew how to create an excep- tion in § 1327(a) if it wished to do so for student loan debts. For example, § 1141(a) provides that a plan of confirmation shall bind all creditors “le]xcept as provided in subsections (d)(2) and (d)(3) of this section.” Section 1141(d)(2) explicitly states, “[a] discharge under this chapter does not discharge a debtor who is an individual from any debt excepted from discharge under section 523 of this title,” which includes student loan debt where there has been no determination of undue hardship. Similarly, § 1227(a) binds creditors to the terms of a confirmed plan “[e]xcept as provided in section 1228(a) of this title.” Section 1228(a) explicitly pro- hibits a debtor from discharging a “debt of the kind specified in section 523(a) of this title.” Congress knew how to write exceptions into those statutes, but did not provide any exception in § 1327(a) for student loan claims. Such an exception should not be grafted onto § 1327(a). 26 The Court should not find an exception to the binding effect of a confirmed plan that provides for the discharge of student loan debt, because that would invite student loan creditors to defer object- ing to a plan as not confirmable until after the cred- itor received the benefit of the payments provided for by the plan, as the Petitioner did in this case. Creditors cannot have it both ways. They should not be allowed to accept the benefits of a plan only to attack its validity thereafter. Moreover, if the Court allows such post-confirmation attacks on chapter 13 plans, creditors would be encouraged to collect pay- ments under a chapter 9, 11, or 12 plan and allowed to upset confirmed plans later on the basis of claimed legal errors in granting confirmation. Congress could not have intended § 1327(a) to be benign. See 8 COL- LIER ON BANKRUPTCY, 4] 1327.02[1][c], at 1327-8 (Allen N. Resnick et al. eds., 15th ed. rev. 2006) (“[Reading an exception for section 523 violations into section 1327(a)] would render any chapter 9, 11, 12 or 13 plan subject to attack after confirmation, and even after completion, for a violation of notice or service rules, in contravention of section 1327(a).”). A cred- itor should not be allowed to wait until an otherwise non-confirmable plan has been completed by pay- ment, and then for the first time to pursue collection efforts and also to bring proceedings to undo con- firmation. To permit post-confirmation attacks on confir- mation orders could result in voiding confirmation orders containing a variety of provisions that may be at odds with the Bankruptcy Code, but which are nevertheless found in plans of reorganization con- firmed in cases under chapters 9, 11 and 12. See e.g., In re Metromedia Fiber Network, Inc., 416 F.3d 136 (2d Cir. 2005) (upholding a confirmed chapter 11 27 plan that enjoined suits against third parties, which violated § 524(e)); In re American Preferred Pre- scriptions, Inc., 255 F.3d 87, 94-95 (2d Cir. 2001) (sustaining the post-confirmation appointment ofa chapter 11 trustee, although § 1104(a) authorizes such appointment only before confirmation of a plan); In re Penn-Dixie Industries, Inc., 32 B.R. 173, 177-79 (Bankr. S.D.N.Y. 1983) (upholding a chapter 11 plan that failed to properly classify tax debts, as required by § 1129(2)(9)); In re County of Orange, 219 B.R. 543, 566-67 (Bankr. C.D. Cal. 1997) (upholding a chapter 9 plan which subordinated a creditor’s claim, in violation of § 1123(a)(4) as incor- porated into chapter 9 by § 901(a)); In re Watkins, 240 B.R. 735 (Bankr. C.D. Ill. 1999) (upholding a chapter 12 plan that treated a junior lien holder's claim only as an unsecured claim, in violation of § 1225(a)(5)). The sound administration of bankruptcy cases requires that provisions of plans of reorganization and of debt adjustment under the various chapters not be subject to attack by a creditor who has not objected to confirmation of the plan or appealed the confirmation order. The debtor and creditors must be able to rely on the confirmed plan and be confi- dent that their post-confirmation conduct will not be undercut by post-confirmation attacks on the con- firmed plan. Credit is extended to the reorganized debtor and other relationships are entered into in reliance of the finality of confirmation orders. Such orders are at the heart of reorganization and debt relief cases, and the bankruptcy laws could not function if they could be upset in a later proceeding, whether initiated in another proceeding in a differ- ent court, or in a later proceeding in the same bankruptcy case. Section 1327(a) should be applied 28 as written, rather than interpreting it in a way that could undercut reorganization under all of the chap- ters of the Bankruptcy Code. The interest of the debtor and creditors in finality of confirmed plans is paramount. See Stoll v. Got- tlieb, 305 U.S. 165, 172 (1938); In re Chicago, Mil- waukee, St. Paul & Pac. R.R. Co., 891 F.2d 159, 162 (7th Cir. 1989) (citing cases). Finality is an essential element of any successful reorganization under the Bankruptcy Code, as evidenced by provisions in all chapters that a plan of reorganization is binding on all creditors.® Without finality, confirmation is mean- ingless. Indeed, in chapter 11 cases, in which con- firmation is put to a vote, creditors would be unlikely to accept a plan, knowing that it could be undone later. The binding nature of § 1327(a) is further sup- ported by the fundamental policy of equitable moot- ness. When a party fails or neglects to diligently pursue its available remedies, the doctrine of equi- table mootness precludes a party from obtaining ° Bankruptcy Code §§ 944(a)(3), 1141(a), 1227(a), 1327(a). See Bankruptcy Code § 944(a)(3) (“The provisions of a con firmed plan bind the debtor and any creditor, whether or not . such creditor has accepted the plan”); Bankruptcy Code § 1141(a) (with exceptions, “the provisions of a confirmed plan bind the debtor. . . and any creditor. . . whether or not the claim or interest of such creditor. . . has accepted the plan”); Bankruptcy Code § 1227(a) (“the provisions of a confirmed plan bind the debtor [and] each creditor. . . whether or not the claim of such creditor is provided for by the plan, and whether or not such creditor . . . has accepted, or has rejected the plan”); Bankruptcy Code § 1327(a) (“The provisions of a confirmed plan bind the debtor and each creditor, whether or not the claim of such creditor is provided for by the plan, and whether or not such creditor has objected to, has accepted, or has rejected the plan.”). 29 appellate review. See, e.g., In re Continental Air- lines, 91 F.3d 553, 559 n.1 (3d Cir. 1996); In re Pub- lic Serv. Co., 963 F.2d 469, 472 (1st Cir. 1992); In re Roberts Farms, 652 F.2d 793, 798 (9th Cir. 1981). The passage of time and changes in parties’ posi- tions after a confirmation order has been issued are basic considerations that preclude efforts to over- turn such an order. For these reasons, the doctrine of equitable mootness has developed in bankruptcy cases to dismiss appeals where relief could still be fashioned after substantial consummation of a plan of reorganization, but where it would be inequitable to do so. Several factors are considered in deciding whether an order has become equitably moot, including “the public policy of affording finality to bankruptcy judgments.” In re Continental Airlines, Inc., 91 F.3d at 560. As stated by a commentator, who is one of the Amici professors on this brief, the doctrine of equitable mootness promotes “finality and reliance upon the orders of a bankruptcy court regarding matters such as... plan confirmation.” George W. Kuney, Slipping Into Mootness, 2007 ANN. SURV. BANKR. LAW, ART 9, 267 at 279-80. Anal- ogous to this long-standing doctrine, § 1327(a) binds parties who do not exercise their rights to object to confirmation or appeal a confirmation order. 30 CONCLUSION For the foregoing reasons, the Court should sus- tain the confirmation order and discharge in this case, either on the basis of the doctrine of res judi- cata, or by ruling that § 1327(a) should be applied as written. The Amici thus urge the Court to affirm the order below. Respectfully submitted, RICHARD LIEB Research Professor of Law ST. JOHN’S UNIVERSITY SCHOOL OF LAW 8000 Utopia Parkway Jamaica, New York 11439 (212) 479-6020 or (718) 990-2312 Counsel of Record for Amici Curiae Professors Of Counsel: GEORGE KLIDONAS JAMES A. NEWTON JONATHAN M. PETTS Dated: October 16, 2009 CURIAE No. 08-1134 IN THE Supreme Court of the United States UNITED STUDENT AID FUNDS, INC., Petitioner, Ve FRANCISCO J. ESPINOSA, Respondent. ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT BRIEF OF AMICUS CURIAE G. ERIC BRUNSTAD, JR. IN SUPPORT OF RESPONDENT G. Enc Brunstad, Jr. Counsel of Record Collin O’Connor Udell Matthew J. Delude DECHERT LLP 90 State House Square Hartford, Connecticut 06103 (860) 524-3999 Counsel for Amicus Curiae Page po gc ae ean l TABLE OF AUTHORITIES .......................000 itl INTEREST OF THE AMICUS CURIAE STATEMENT SUMMARY OF THE ARGUMENT A. TABLE OF CONTENTS Funds’ Position Irreconcilably Conflicts with Sections 1327(a), 1330(a), and Prior Decisions of Rae a CNT a tae Sb e 1. Travelers Indemnity Re a ccasiomnonden 2. Celotex Corp. v. Edwards.............. 3. Chicot County Drainage Dist. uv. Baxter State Bank ...................4. ee Ee eee Funds’ Position Conflicts With The Essential Logic and Operation of the Bankruptcy Process................. CCC TORE eee Ll TABLE OF CONTENTS (continued) LiL TABLE OF AUTHORITIES Page FEDERAL CASES Celotex Corp. v. Edwards, DES CIF. Be CRD occcveecncsccssccscsesce 11, 17-19 Chicot County Drainage Dist. v. Baxter State Bank, Rs GSE CID icicssscinsccisinrciien 11, 20, 21 Hanover Nat'l Bank v. Moyses, Ps IE I iiriekeicidteciniinasencesinceduniia 26 Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, ey I I oa csancusiecuiaanesunetes 23 Oriel v. Russell, SN I I ccraasnsDaidesinseirhaseesontaiachionee 18 Stoll v. Gottlieb, ey ee en I op ccuneundeewebosunce passim Straton v. New, I ID sss sa caeentingsumiiensonenedenes 26 Tennessee Student Assistance Corp. v. Hood, 541 U.S. 440 (2004)................... 26-28 AD TABLE OF AUTHORITIES (continued) Page Travelers Indemnity Co. v. Bailey, 129 S. Ct. 2196 (2008)...................... passim Trulis v. Barton, 107 F.3d 685 (9th Cir. 1997)..........000000000.. 27 Underwriters Nat'l Assurance Co. v. North Carolina Life & Accident & Health Ins. Guar. Ass'n, 455 U.S. 691 (1982)...... 21 Willy v. Coastal Corp.., EE a 23 FEDERAL STATUTES AND RULES Ue av acecindeciecinnccensovenenesosonnse 17, 18, 19 I ii sscsisesinsisceostoncsncntoveiinsernnecennsseseon 7 11 U.S.C. § 523(a)(8) ...cccccccccccesceeeseeeeeees 7, 8, 10, 25 SI I in cceseenennsnnnstvarenssennsvesosannes 7, 24 as ccs case ssecemsossonnaaoovaneneen 24 ee eT 6 IT locale binidlcd ein cil eaaasbeesides 4 UV TABLE OF AUTHORITIES (continued) Page Rte See 5); | ENE 5, 6 Soe Coe o: 6 11 U.S.C. § 1325(b)(1) .occeccscccceccecesssscscseeseseseeee 3,5 RD WEG. § LBD cccnesscnsnsessesiisniuniaammanaiaal 5 DE WG © TURF iavssecasssessoscecscsiaieuueee 11 PEF Cem D: .. Aeener ee passim PEis (ch §° SaeRCMEMEMOINONN rr 4,7 11 U.S.C. § ISBN ©... een sac 10 REE Fe FRR eree NNT 7 NE USA. & DID sie csesssasncveccnsdsteuensnncuaeee 11 31 UGC. © 1SBOGD o.oo cccececessrerncict 9,10, 12, 13 92 UU... © UBC nncsscnncckecceaeee 18 4 | S| |: Pe 8 Oe. GE. Te. F. TOG sn ceseecisicsnscssasssonneee 8 ,. St 8 AS een ee 17,18 VI TABLE OF AUTHORITIES (continued) Page Act of July 1, 1898, ch. 541, § 2, 30 Stat. 545, 11 U.S.C. § 11 (repealed 1979)......... 20 Act of July 1, 1898, ch. 541, § 16(a), 30 Stat. 550, 11 U.S.C. § 35 GE 25 Act of June 7, 1934, ch. 424, § 77B, 48 Stat. 912, 11 U.S.C. § 207 Teed iandewiidsins 24 Act of June 7, 1934, ch. 424, § 77B(g), 48 Stat. 920, 11 U.S.C. § 207(g) a a ectusucens 24 Act of June 7, 1934, ch. 424, § 77Bch), 48 Stat. 920, 11 U.S.C. § 207(h) I 24 ULL TABLE OF AUTHORITIES (continued) Page OTHER AUTHORITIES 5 COLLIER ON BANKRUPTCY 4 1141.01[1] I os iceadlcmaeemedaelennins R. LORD, WILLISTON ON CONTRACTS § 30:4 I a eaeeieieainial 18 JAMES WM. MOORE ET AL., MOORE’S FEDERAL PRACTICE § 131.30[1][d] [iii] (8d ed. 2009)................. 18A ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE ey WE I HE Sidcccnceccrninsstensanananicnaxis ] INTEREST OF THE AMICUS CURIAE! The undersigned amicus curiae is the Macklin Fleming Visiting Lecturer in Law at the Yale Law School where he teaches courses on bankruptcy law, domestic and international business reorganizations, commercial transac- tions, secured transactions, and argument and reason. He began teaching at Yale in 1990 and has also taught at the Harvard Law School. In addition to his teaching, the undersigned is a contributing author to COLLIER ON BANKRUPTCY, responsible for writing several chapters of the Treatise. He is also a partner at the law firm of Dechert LLP; a prior Chair of the ABA Business Bankruptcy Committee; a former member of the Judicial Conference Advisory Committee on the Federal Bankruptcy Rules; and a Fellow of the American College of Bankruptcy. The undersigned has briefed and argued numerous bankruptcy matters before the Court, including Florida Dep’t of Revenue v. Piccadilly Cafeterias, Inc., 128 S. Ct. 2326 (2008); Travelers ! No counsel for any party has authored this brief in whole or in part, and no party or counsel for a party has made a monetary contribution to the preparation or sub- mission of this brief. See Sup. Ct. R. 37.6. All parties have been timely notified of the undersigned’s intent to file this brief; both petitioner and respondent have con- sented to the filing of this brief. Copies of petitioner's and respondent's consents are filed herewith. 2 Cas. & Sur. Co. v. Pacific Gas & Elec. Co., 549 U.S. 443 (2007); Marrama v. Citizens Bank of Massachusetts, 549 U.S. 365 (2007); Till v. SCS Credit Corp., 541 U.S. 465 (2004); and Hartford Underwriters Ins. Co. v. Union Planters Bank, N.A., 530 U.S. 1 (2000). During this term, he will be arguing Schwab v. Reilly, No. 08-538, and Milavetz, Gallop & Milavetz, P.A. v. United States, Nos. 08-1119, 08-1225. He has otherwise participated as counsel for one of the parties in numerous other bankruptcy matters before the Court, including Central Virginia Community College v. Katz, 546 U.S. 356 (2006); Rousey v. Jacoway, 544 U.S. 320 (2005); Kontrick v. Ryan, 540 U.S. 443 (2004); Lamie v. United States Trustee, 540 U.S. 526 (2004); FCC v. NextWave Personal Comme'ns Inc., 537 U.S. 293 (2003); and Connecticut Nat'l Bank v. Germain, 503 U.S. 249 (1992). In addition, he has prepared and filed with the Court several amicus briefs in bankruptcy cases, including Howard Delivery Serv., Inc. v. Zurich American Ins., Co., 547 U.S. 651 (2006); Tennessee Student Assistance Corp. v. Hood, 541 U.S. 440 (2004); Archer v. Warner, 538 U.S. 314 (2003); and Things Remembered, Inc. v. Petrarca, 516 U.S. 124 (1995). The undersigned is deeply interested in the subject of bankruptcy law, and has written, taught, and lectured on the subject of bank- ruptcy plans, the proper treatment of claims un- der plans, and the finality of orders confirming a 3 plan. The purpose of this brief is to address mat- ters that bear on the Court’s determination of a critically important issue of bankruptcy law: whether a creditor who receives notice of a debtor’s bankruptcy case, who fails to object to the proposed treatment of its claim in the debtor’s plan, and who then receives payments under the plan following the plan’s confirmation, may subsequently ignore the plan and violate the debtor’s discharge on the basis of an alleged defect in the plan that the creditor could and should have raised prior to the plan’s confirma- tion. Bankruptcy courts confirm tens of thou- sands of plans each year. Creditors routinely de- cline to object to these plans even though they may have a meritorious objection, in many in- stances because they conclude that the plan of- fers the best means of receiving the highest re- covery on their claims. In the absence of a timely and successful appeal from an order con- firming a plan, confirmation of the plan results in a final judgment that is binding on all parties. Debtors rely on this finality, as do others who in- teract with debtors following their emergence from bankruptcy. In this context, petitioners advocate an untenable rule that would essentially defeat the plan process: namely, that they need not assert any objection they may have to a plan prior to d the plan’s confirmation, may receive payments from the debtor for years in accordance with the plan, and then, after the debtor believes he or she is finished making all payments, assert their objection in order to avoid the debtor’s discharge and obtain perhaps even greater payment. If this were the rule, our bankruptcy system would collapse of its own weight because one of its most essential underpinnings — finality — would be ef- fectively eroded. But this is not the rule, as es- tablished by several provisions of the governing Bankruptcy Code and the precedents of this Court. The undersigned presents this brief to address these important matters. STATEMENT Between 1988 and 1989, respondent Fran- cisco J. Espinosa (“Espinosa”) obtained $13,250 in student loans. Joint Appendix (“JA”) 16. He apparently hoped that the educational training that these loans funded would generate better employment opportunities. Unfortunately, that did not occur, and he found himself unable to bear the burden of his debt. On December 7, 1992, he commenced a chapter 13 bankruptcy case in the United States Bankruptcy Court for the District of Arizona. JA 5. The Bankruptcy Code requires each chap- ter 13 debtor to propose a plan. 11 U.S.C. § 5 1321.2 The purpose of the plan is to describe the debtor’s proposed treatment of his or her debts, and the plan must provice that the debtor will dedicate future earnings or other income as nec- essary for the payment of claims as set forth in the plan. 11 U.S.C. § 1322(a)(1). Although credi- tors are not entitled to vote on a chapter 13 plan, any creditor may insist that the debtor either propose to pay the creditor’s claim in full, or, if the debtor cannot pay claims in full, at least dedicate all of the debtor's “disposable income” to the payment of claims for not less than three years. 11 U.S.C. § 1325(b)(1). As is relevant here, the term “disposable income” is defined to mean the amount of the debtor’s income that is not reasonably necessary for the debtor’s main- tenance and support. 11 U.S.C. § 1325(b)(2)(A). At the time Espinosa commenced his bank- ruptcy case, his student loans were held by peti- tioner United Student Aid Funds, Inc. (“Funds”). JA 16. Espinosa’s chapter 13 plan (the “Plan”) provided for the payment in full of the original principal amount of these loans. JA 26. To ac- complish this, Espinosa proposed to dedicate slightly more than his monthly disposable in- come to pay off this amount over time. JA 22-23. 2 References to the Bankruptcy Code are to the provisions of the Code in effect at the time of Espinosa’s pankruptcy filing in 1992. Relevant provisions are reproduced in the statutory appendix accompanying this brief. 6 Further, the plan obligated him to make his monthly payments for a five-year period, rather than the standard three-year term. See 11 U.S.C. § 1322(c) (providing that a plan ordinarily cannot propose a payment period greater than three years, and absolutely cannot propose a payment period in excess of five years). In other words, Espinosa proposed to pay the Funds more than the maximum monthly amount a creditor may require from the debtor in a chapter 13 case, and to make his payments for the maxi- mum amount of time that chapter 13 permits. Funds filed a proof of claim asserting tnat the amount owed under the loans was approxi- mately $17,832, a sum that exceeded the princi- pal balance of the loans by roughly $4,582. JA 35. The Plan specifically provided, however, that “[t]he amounts claimed by the [Funds] for capi- talized interest, penalties, and fees shall not be paid for the reasons that the same are penalties and not provided for in the loan agreement be- tween the Debtor and the lender.” JA 26. The Plan further provided that “[a]ny amounts or claims for student loans unpaid by this Plan shall be discharged.” JA 26. Following the reso- lution of a minor objection by the trustee, the 7 bankruptcy court issued an order confirming the Plan on May 6, 1993. JA 42-43.3 Funds failed to object to the Plan, either before or after the bankruptcy court entered its confirmation order. Pet. App. 5-6. Indeed, Funds failed to object to the Plan even after the trustee specifically notified Funds that it would receive less than the amount set forth in its proof of claim under the provisions of the Plan. JA 44- 45. By operation of law, after a debtor com- pletes making payments under his chapter 13 plan, the debtor is entitled to a discharge. 11 U.S.C. § 1328. The effect of the discharge is to release the debtor from personal liability for most pre-petition monetary obligations, and the discharge acts as a type of injunction against further debt collection activity on discharged debts. 11 U.S.C. § 1328(c); see also 11 U.S.C. § 524. The scope of a discharge is subject to cer- tain exceptions. 11 U.S.C. §§ 523, 1328(c). Stu- dent loans insured or guaranteed by a govern- mental unit are among the _ exceptions, “unless...excepting such debt from dis- charge...will impose an undue hardship on the ' In chapter 13 cases, a trustee is appointed to supervise the process and administer the confirmed plan. 11 U.S.C. § 1302. 8 debtor and the debtor’s dependents.” 11 U.S.C. § 523(a)(8). A proceeding to declare the dischargeabil- ity of a particular debt under section 523, includ- ing a debt for a student loan that poses an undue hardship, is customarily pursued as an “adver- sary proceeding” commenced by either the debtor or the creditor with the dling of a complaint. Fed. R. Bankr. P. 7001(6); see also Fed. R. Bankr. P. 4007. In this case, Espinosa did not com- mence an adversary proceeding or file a motion specifically seeking an undue hardship determi- nation. Instead, as noted, Espinosa provideu in his Plan for the full payment of the principal amounts due on his student loans, and provided for the discharge of any other amounts related to the loans. JA 26. In addition, Espinosa pro- posed to devote more than his available “dispos- able income” to fund payment of this debt. In other words, Espinosa essentially offered Funds a compromise: he would devote all of his dispos- able income (and then some) to pay his student loan debt for five years, but beyond that the debt would be extinguished. As noted, Funds did not object to this ‘reatment — perhaps because it believed it was a good deal under the circumstances — and the bankruptcy court entered an order confirming the Plan. On May 30, 1997, following Espinosa’s successful completion of all payments required 9 under his Plan, including his payment in full of the principal amounts due on his student loans, the bankruptcy court granted Espinosa his dis- charge. JA 46.4 By operation of law, “[t]he provisions of a confirmed plan bind the debtor and each credi- tor’ regardless of whether “the claim of such creditor is provided for by the plan” and regard- less of whether “such creditor has objected to, has accepted, or has rejected the plan.” 11 U.S.C. § 1327(a). Likewise, following confirma- tion of a plan, a party in interest may seek to re- voke confirmation within 180 days “after the date of the entry of an order of confirmation” and only “if such order was procured by fraud.” 11 U.S.C. § 1330(a). At no time during the 180 days following confirmation of Espinosa’s Plan did Funds seek to revoke the order confirming the Plan. Likewise, Funds did not appeal the order confirming the Plan. Three years after the bankruptcy court granted Espinosa’s discharge, and eight years after the Plan was confirmed, Funds (in conjunc- 4 While a clerical error in the bankruptcy court's order erroneously included an exception to discharge for any debt “for a student loan or educational benefit overpay- ment as specified in 11 U.S.C. § 523(a)(8),” that error was acknowledged and corrected by the bankruptcy court on remand from the Ninth Circuit. JA 46, 48. 10 tion with the Education Department) began in- tercepting Espinosa’s income tax refunds in an effort to obtain the unpaid portion of its claim. Pet. App. 6. Thereafter, Espinosa filed a motion with the bankruptcy court requesting an order holding Funds in contempt for violating the dis- charge injunction. Pet. App. 6. The bankruptcy court ruled in favor of Espinosa. Pet. App. 7. On appeal, the district court reversed, ruling that the confirmation or- der was void for lack of due process. Pet. App. 7. On appeal from the district court, the Ninth Cir- cuit reversed and remanded the case to the bankruptcy court for the resolution of a clerical ervor.° Following the bankruptcy court’s resolu- tion of the error, the Ninth Circuit reversed the district court, explaining that “student loan debts can be discharged by way of a Chapter 13 plan if the creditor does not object, after receiv- ing notice of the proposed plan.” Pet. App. 26. SUMMARY OF THE ARGUMENT Sections 523(a)(8) and 1328(a)(2) provide that student loans are dischargeable only upon a showing of “undue hardship.” In contrast, sec- tion 1327(a) provides that the provisions of a confirmed plan “b nd” the debtor and creditors, and section 1330(a, provides that a confirmation ’ See supra note 4. 11 order may be revoked within 180 days of its en- try “if...procured by fraud.” Funds argues that sections 523(a)(8) and 1328(a)(2) trump the bankruptcy court’s order confirming Espinosa’s Plan, and that Funds’ failure to object to the Plan is therefore of no effect. But consistent with sections 1327(a) and 1330(a), this Court has repeatedly upheld the enforceability of a bank- ruptcy court’s orders once they have become fi- nal, including orders confirming bankruptcy plans, and has turned away subsequent attempts to challenge the enforceability of those orders for procedural defects or substantive deficiencies that could have been raised earlier. See, e.g., Travelers Indem. Co. v. Bailey, 129 S. Ct. 2195, 2198 (2009); Celotex Corp. v. Edwards, 514 U.S. 300, 313 (1995); Chicot County Drainage Dist. v. Baxter State Bank, 308 U.S. 371, 376 (1940); Stoll v. Gottlieb, 305 U.S. 165, 172 (1938). Consistent with the Court’s precedents, as well as the text, logic, history, and purpose of the Bankruptcy Code, the better view is that sec- tions 1327 and 1330 supply the correct rule of decision here. If a creditor with notice has grounds for objecting to a plan, including on the basis that its claim is not being treated in a manner consistent with the Code, the creditor must assert those grounds prior to confirmation, or forfeit any right to do so. A creditor with no- tice may not wait until after confirmation to as- sert an objection on the theory that the unarticu- 12 lated objection silently rendered the confirma- tion order void. Important reliance interests are at stake, as well as interests of fundamental fairness. In proposing their plans in good faith to resolve their financial difficulties, chapter 13 debtors rely on creditors to object if, in fact, a creditor in- tends to oppose the debtor’s proposal. Likewise, debtors rely on the finality of plans in making their payments under them, as do other persons who interact with these debtors. A creditor can- not withhold an objection to confirmation, re- ceive payments under a confirmed plan, and then successfully assert its objection thereafter in the hope of receiving still more. Such a rule would only encourage creditors to ignore the con- firmation process, and would essentially hobble the bankruptcy system and the goals that it pro- motes, including the debtor's fresh start. The decision of the court below should be affirmed. A. Funds’ Position Irreconcilably Con- flicts with Sections 1327(a), 1330(a), and Prior Decisions of this Court. Section 1327(a) provides that “[t]he provi- sions of a confirmed plan bind the debtor and each creditor, whether or not the claim of such creditor is provided for by the plan, and whether or not such creditor has objected to, has ac- cepted, or has rejected the plan.” 11 U.S.C. § 13 1327(a). By its plain terms, section 1327(a) thus fixes the effect of a confirmed plan. In turn, section 1330(a) provides that, on request of a party in interest “at any time within 180 days after entry of an order of confirmation,” the bankruptcy court may revoke the order if “procured by fraud.” 11 U.S.C. § 1330(a). By its plain terms, section 1330(a) thus prescribes the parameters for revoking an order of confirma- tion. By design, sections 1327(a) and 1330(a) in- ject strong rules of finality into the plan confir- mation process. These rules mirror the prece- dents of this Corrt, and likewise supply the rele- vant rule of decision applicable in this contro- versy. 1. Travelers Indemnity Co. v. Bailey In Travelers Indemnity Co. v. Bailey, the Court considered the finality of a bankruptcy court’s orders barring claims against a debtor's third party insurer entered in conjunction with the debtor’s confirmed chapter 11 plan. 129 S. Ct. at 2198. The case involved the Johns- Manville Corporation (“Manville”), a processor of asbestos and manufacturer of asbestos- containing products. The Travelers Indemnity Company and its affiliates (“Travelers”) were Manville’s primary liabi'ity insurers. In 1982, Manville filed for bankruptcy in response to a 14 deluge of lawsuits seeking to hold it responsible for a broad variety of asbestos-related injuries. Id. at 2198-99. Manville’s reorganization plan created the Manville Personal Injury Settlement Trust (“Trust”) to pay asbestos claims filed against Manville, and Manville’s plan provided that all such claims would be “channeled” to the Trust, leaving the reorganized Manville free from these liabilities. Id. at 2199. The “cornerstone” of the plan was a settlement whereby Manville’s insur- ers, including Travelers, agreed to provide most of the initial funding for the Trust. Jd. The set- tlement was made possible by a December 18, 1986 order of the bankruptcy court (the “Settle- ment Order’) approving the settlement agree- ment and enjoining all persons from “commenc- ing and/or continuing any suit, arbitration or other proceeding of any type or nature for Policy Claims against any or all members of the Set- tling Insurer Group.” Jd. The bankruptcy courts December 22, 1986 order confirming Manville’s plan incorporated the Settlement Or- der by reference, and both the confirmation order and the Settlement Order were affirmed by the district court and, subsequently, the court of ap- peals. Jd. at 2219-20. Over ten years later, plaintiffs filed vari- ous asbestos actions against Travelers for liabil- ity related to its provision of insurance to Man- 15 ville (the “Direct Actions”). Jd. at 2200. In 2002, Travelers returned to the bankruptcy court, in- voking the terms of the 1986 orders and moving to enjoin the Direct Actions. Jd. The bankruptcy court held an evidentiary hearing, made exten- sive findings, and held that the Direct Actions arose out of and were related to the insurance policies, and were therefore barred under the terms of the 1986 orders. Jd. at 2201. The dis- trict court affirmed, but the Second Circuit re- versed, holding that the bankruptcy court “mis- took its jurisdiction when it enjoined ‘claims brought against a third-party non-debtor solely on the basis of that third-party’s financial con- tribution to a debtor’s estate,’ because ‘a bank- ruptcy court only has jurisdiction to enjoin third- party non-debtor claims that directly affect the res of the bankruptcy estate.” /d. at 2202. In other words, the Second Circuit concluded that the bankruptcy court lacked the authority to en- join the actions against Travelers in the first place. On further review, this Court reversed the Second Circuit, holding that “the 1986 Orders became final on direct review over two decades ago,’ and therefore “whether the Bankruptcy Court had jurisdiction and authority to enter the injunction in 1986 was not properly before the Court of Appeals in 2008 and [likewise was] not properly before [this Court].” /d. at 2203. The Court held further that, 16 where the plain terms of a court order unambiguously apply, as they do here, they are entitled to their effect... . If it is black-letter law that the terms of an unambi- guous private contract must be en- forced irrespective of the parties’ subjective intent, see R. Lord, Wil- liston on Contracts § 30:4 (4th ed. 1999), it is all the clearer that a court should enforce a court order, a public governmental act, accord- ing to its unambiguous terms. This is all the Bankruptcy Court did. Id. at 2204 (internal citations omitted). In addi- tion, the Court held that, even if it found the 1986 orders to be ambiguous, “it is far from clear that respondents would be entitled to upset the Bankruptcy Court’s interpretation of the 1986 Orders,” because a “bankruptcy court’s interpre- tation of its own confirmation order is entitled to substantial deference.” Jd. at 2204 n.4. Stress- ing the need for finality, the Court concluded that “fa]lmost a quarter-century after the 1986 Orders were entered, the time to prune them is over. Id. at 2206. The Court's decision in Bailey has direct bearing here. Just as the plaintiffs in Bailey could not ignore or avoid the bankruptcy court's 17 confirmation of Manville’s plan or its injunction barring actions against Manville’s_ insurers, Funds cannot ignore the bankruptcy court’s con- firmation of Espinosa’s Plan or its order granting Espinosa his discharge following completion of his plan payments. Whatever merit Funds’ ob- jection to the discharge of its claims might have had prior to confirmation, Funds’ opportunity to assert its objection has long since passed, and it cannot now upset the finality of Espinosa’s Plan or the bankruptcy court's order granting Espinosa his discharge. 2. Celotex Corp. v. Edwards In Celotex Corp. v. Edwards, 514 U.S. 300 (1995), plaintiffs sued Celotex in the federal dis- trict court, alleging asbestos-related injuries. /d. at 302. The district court entered a judgment against Celotex, and, to stay execution pending appeal, Celotex posted a supersedeas bond with Northbrook Property and Casualty Insurance Company (Northbrook) serving as surety. Id. The Fifth Circuit affirmed the judgment, render- ing it “final.” Jd. On the same day, Celotex com- menced a chapter 11 bankruptcy case. /d. Shortly thereafter, the bankruptcy court entered an injunction pursuant to 11 U.S.C. § 105 staying all proceedings involving Celotex, in- cluding any action against Northbrook. /d. at 303. Ignoring the injunction, plaintiffs filed a motion with the district court seeking permission 18 to execute against Northbrook on the _ su- persedeas bond pursuant to Fed. R. Civ. P. 65.1. Id. Celotex and Northbrook argued that the bankruptcy court’s injunction applied, barring execution. Jd. The district court disagreed, and permitted plaintiffs to execute on the bond against Northbrook. /d. at 304. On appeal, the Fifth Circuit affirmed, but this Court reversed. Id. at 305-6. The Court began by noting the well-settled rule that “persons subject to an injunctive order issued by a court with jurisdiction are expected to obey that decree until it is modified or re- versed, even if they have proper grounds to ob- ject to the order.” Jd. at 306 (citation and inter- nal quotation marks omitted) (citing Oriel v. Russell, 278 U.S. 358 (1929)). Plaintiffs at- tempted to argue that section 1334(b), vesting the bankruptcy court with jurisdiction to apply the provisions of the Bankruptcy Code, must be “harmonized” with Fed. R. Civ. P. 65.1, providing an expedited procedure for executing on su- persedeas bonds. Celotex, 514 U.S. at 311. The Court disagreed, holding that the bankruptcy court’s order trumped the procedural rule: “This Rule outlines a streamlined procedure for execut- ing on bonds...Just because the Rule provides a simplified procedure for collecting on a_ bond, however, does not mean that such a procedure, like the more complicated procedure of a full- 19 fledged lawsuit, cannot be stayed by a lawfully entered injunction.” Jd. at 312. The Court concluded that if plaintiffs de- sired to challenge the injunction, “they should have challenged it in the Bankruptcy Court.” /d. at 313. Moreover, this Court explained that if the plaintiffs were dissatisfied with the bank- ruptcy court’s decision, they should have taken a direct appeal to the district court and, if neces- sary, to the Eleventh Circuit. Jd. What they could not do was “collaterally attack the Bank- ruptcy Court’s Section 105 injunction...without seriously undercutting the orderly process of the law.” Id. The Court’s decision in Celote> also has bearing here. Just as the plaintiffs in Celotex could not ignore the bankruptcy court’s injunc- tion and proceed to enforce their claim against the debtor’s surety, Funds cannot ignore the bankruptcy court’s confirmation of Espinosa’s Plan and discharge order. To the extent Funds desired to challenge the Plan and its provision for the discharge of its claim, Funds was re- quired to object to the Plan on a timely basis. If Funds were dissatisfied with the bankruptcy court’s resolution of its objection, Funds could and should have taken a direct appe. | to the dis- trict court or, if necessary, to the Ninth Circuit. What Funds cannot do without seriously under- cutting the orderly process of the law is ignore 20 the bankruptcy court’s discharge order, com- mence debt collection activities against Espinosa after Espinosa completed his payments under his Plan, and then claim that the bankruptcy court’s order was void on the basis of an alleged defect that Funds could and should have as- serted in the confirmation proceeding. 3. Chicot County Drainage Dist. v. Baxter State Bank In Chicot County Drainage Dist. v. Baxter State Bank, 308 U.S. 371 (1940), the bankruptcy court® approved the plan of reorganization of the Chicot County Drainage District (“District”) can- celing the bonds of Baxter State Bank (“Baxter”). Chicot, 308 U.S. at 373. In reliance on the bank- ruptcy court's jurisdiction to confirm the plan, the Reconstruction Finance Corporation (“RFC”) made a loan to the District and purchased a number of the District’s old bonds. Jd. Subse- quently, in an unrelated case, this Court de- clared unconstitutional the provisions of the Bankruptcy Act under which the bankruptcy court had approved the District's plan. Td. at ® Under the pnor hankruptey acts, district courts were vested with the jurisdiction of bankruptcy courts and would sit as a court of bankruptcy in bankruptcy matters See Act of July 1, 1898, ch. 541, § 2, 30 Stat. 545, 11 U.S.C. § 11 (repealed 1979). For clarity, the term “bank- ruptey court” will be used to refer to such circumstances in this brief. 21 373-74. Thereafter, Baxter sought to recover on its bonds, arguing that the bankruptcy court lacked jurisdiction to cancel them owing to the unconstitutionality of the governing statutory scheme. Id. Rejecting Baxter's claim, the Court stated bluntly: “We think the argument untenable.” Id. at 376. As the Court recognized, “[t]he lower federal courts are all courts of limited jurisdic- tion, that is, with only the jurisdiction which Congress has prescribed.” Jd. Nevertheless, “they are courts with authority ... to determine whether or not they have jurisdiction to enter- tain the cause and for this purpose to construe and apply the statute under which they are asked to act.” Jd. The Court concluded that “({t]heir determinations of such questions, while open to direct review, may not be assailed collat- erally.” Id; see also Underwriters Nat'l Assur- ance Co. v. North Carolina Life & Accident & Health Ins. Guar. Ass’n, 455 U.S. 691, 706 n.13 (1982) (“The need for finality within our federal system...applies with equal force to questions of jurisdiction.”) (citations omitted). The Court's decision in Chicot is directly analogous. Just as the creditor in Chicot could not ignore the bankruptcy court’s confirmation order cancelling its bonds on the belated theory that the bankruptcy court's exercise of its au- thority was unconstitutional, lf'unds cannot new 22 argue successfully long after the fact that the bankruptcy court’s orders confirming Espinosa’s Plan and granting him a discharge exceeded the court’s authority. Once again, the need for final- ity prevails. 4. Stoll v. Gottlieb Finally, in Stoll v. Gottlieb, 305 U.S. 165 (1938), the bankruptcy court entered an order confirming the plan of reorganization of the de- btor Ten Fifteen North Clark Building Corp. (“Ten Fifteen”). Jd. at 169. The plan and con- firmation order enjoined creditor William Gottlieb (“Gottlieb”) from pursuing a claim di- rectly against third party J. O. Stoll (“Stoll”) based on Stoll’s guaranty of Ten Fifteen’s debt to Gottlieb. Jd. at 168-69. Notwithstanding the bankruptcy court’s order extinguishing the liabil- ity, Gottheb subsequently pursued his guaranty claim against Stoll in a collateral proceeding. Id. at 169. Gottlieb argued in the subsequent pro- ceeding that the bankruptcy court lacked author- ity to enter any order barring his pursuit of his guaranty claim against Stoll. Jd. On review, this Court held that, regardless of whether the bankruptcy court had jurisdiction to enter its or- der in the first place, the bankruptcy court's original jurisdiction was not subject to challenge in a collateral proceeding, but was binding on Gottlieb. Jd. at 172. 23 The Court began its analysis by reciting the familiar rule that “[a}] court does not have the power, by judicial fiat, to extend its jurisdiction over matters beyond the scope of the authority granted to it by its creators.” Jd. at 171. None- theless, the Court explained that “[t}here must be admitted . . . a power to interpret the lan- guage of the jurisdictional instrument and its application to an issue before the court.” Jd. The Court likewise explained that “[i]t is just as im- portant that there should be a place to end as that there should be a place to begin litigation.” Id. at 172. Further, “[t]here is no reason to ex- pect that the second decision will be more satis- factory than the first.” Jd.; see also 183A CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 4428, at 23 (2d ed. 2002); 18 JAMES WM. MOORE ET AL., MOORRF’S FEDERAL PRACTICE § 131.30[1][d][iii] (3d ed. 2009); see generally Willy v. Coastal Corp., 503 U.S. 131, 137 (1992) (describing the Stoll deci- sion as one where “a judgment rendered in a case in which it was ultimately concluded that the District Court was without jurisdiction was nonetheless res judicata on collateral attack made by one of the parties”) (citing Stoll v. Gottlieb, 305 U.S. 165 (1938)); Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702 n.9 (1982). The Court's decision in Stoll is directly analogous. Just as the creditor in Stoll could not 24 ignore the bankruptcy court’s order enjoining him from pursuing his guaranty claim, Funds cannot ignore the bankruptcy court’s confirma- tion of Espinosa’s Plan and its discharge of Espinosa’s unpaid indebtedness. Stoll is all the more relevant because the nature of the credi- tor’s objection in Stoll is precisely the same as the Funds’ objection here. Stoll was decided under the former Bank- ruptcy Act of 1898. Section 16(a) of the Act pro- vided expressly that “[t]he liability of a person who is a co-debtor with, or guarantor or in any manner a surety for, a bankrupt shall not be al- tered by the discharge of such bankrupt.” Act of July 1, 1898, ch. 541, § 16(a), 30 Stat. 550, 11 U.S.C. § 35 (repealed 1979).7 In other words, section 16(a) rendered Gottlieb’s guaranty claim against Stoll nondischargeable in Ten Fifteen’s bankruptcy proceeding. Nonetheless, Ten Fif- teen provided in its plan that Stoll’s guaranty li- ability would be extinguished. Gottlieb had no- tice of the bankruptcy, yet failed to object to this provision prior to confirmation of the plan. Ac- cordingly, the court confirmed the plan, which thus became binding on all parties and dis- charged the guaranty obligation.* As a result, 7 The Bankruptey Code contains a similar provision. See 11 US.C. § 524(e). 8’ Ten Fifteen confirmed its plan under section 77B of the former Bankruptcy Act of 1898. See Stoll, 305 U.S. at 25 Gottlieb was bound by the plan and his claim was discharged notwithstanding the clear terms of section 16(a) providing that the debt was not dischargeable. Gottlieb could and should have voiced his objection based on section 16(a) prior to confirmation of the plan. Because he failed to do so, he was bound by the plan and his claim was released. In this case, Funds makes the same argu- ment. [Funds asserts that section 528(a)(8) ren- ders its claims nondischargeable absent a find- ing of undue hardship. Yet Funds failed to voice this objection prior to confirmation of Espinosa’s Plan, which clearly provided that, upon comple- tion of his plan payments, any unpaid portion of Funds’ claim would be discharged. Because Funds failed to make its argument in a timely fashion, its argument has been waived. As a re- sult, following Espinosa’s discharge, Funds could not engage in any debt collection activity against 168; Act of June 7, 1934, ch. 424, § 77B, 48 Stat. 912, 11 U.S.C. § 207 (repealed 1938). Like section 1327(a), sec- tion 77B(g) provided that the provisions of a confirmed plan “shall be binding upon...the debtor...and...all credi- tors...” Act of June 7, 1934, ch. 424, § 77B(g), 48 Stat. 920, 11 U.S.C. § 207(g) (repealed 1938). Similarly, section 77B(h) provided that the final decree in the case operated to “discharge the debtor from its debts and _ labili- ties...except as provided in the plan...” Act of June 7, 1934, ch. 424, § 77B(h), 48 Stat. 920, 11 U.S.C. §& 207(h) (repealed 1938). 26 Espinosa attempting to recover any additional sums beyond the payments Espinosa made un- der his Plan. B. Funds’ Position Conflicts With The Essential Logic and Operation of the Bankruptcy Process. Bankruptcy proceedings are fundamen- tally in rem in nature. Upon commencement of a bankruptcy case, the debtor's property resides in the custody of the bankruptcy court. Straton uv. New, 283 U.S. 318, 320-21 (1931); Hanover Nat'l Bank v. Moyses, 186 U.S. 181, 189-90 (1902). Likewise, a bankruptcy court’s in rem jurisdic- tion is premised on the debtor and his estate, not his creditors. Tennessee Student Assistance Corp. v. Hood, 541 U.S. 440, 447 (2004). Juris- diction of this kind allows a bankruptcy court to “determin[e] all claims that anyone, whether named in the action or not, has to the property or thing in question. The proceeding is ‘one against the world.” Jd. at 448 (quoting 16 JAMES WM. MOoorRE, MOORE'S FEDERAL PRACTICE § 108.70[1], at 108-106 (3d ed. 2004)). The discharge of a debt is also an in rem remedy, and creditors are generally bound by a discharge order. Hood, 541 U.S. at 447. Similar to admiralty law, the in rem aspects of bank- ruptcy law are essential to the functioning of the bankruptcy court and, for over two centuries, have been an intrinsic part of bankruptcy juris- 27 prudence. It is only because the bankruptcy process is binding on all creditors that the criti- cal functions of bankruptcy law — granting the debtor a fresh start, protecting and preserving an insolvent debtor's assets, and the adjustment and payment of claims against those assets — may be performed. As this Court has noted, it is by virtue of the binding nature of its determina- tions that “[a] bankruptcy court is able to provide the debtor a fresh start . . . despite the lack of participation of all of his creditors, because the court’s jurisdiction is premised on the debtor and his estate, and not on the creditors.” Jd. Accord- ingly, once a bankruptcy plan is confirmed, it is binding on all parties, and once the opportunity for direct appeal has passed, the confirmation order is a final judgment, immune from chal- lenge on collateral review. Travelers, 129 S.Ct. at 2206; Stoll, 305 U.S. at 171-72; Trulis v. Bar- ton, 107 F.3d 685, 691 (9th Cir. 1997). The Funds position in this case stands at odds with these essential principles and places in jeopardy a variety of bankruptcy objectives by eroding the finality of the bankruptcy court’s ju- risdiction to implement them. Obviously, the benefits of a bankruptcy court’s confirmation of a debtor's plan and entry of a discharge order would be eroded dramatically if the bankruptcy court’s orders were subject to collateral attack, or could be simply ignored. See 5 COLLIER ON BANKRUPTCY 4 1141.01[1] (15th ed. 1995). 28 Funds seeks shelter in this Court's deci- sion in Hood, but Hood does not support its posi- tion. To begin with, Hood involved a proceeding under chapter 7 of the Bankruptcy Code, in which plans are not used and payments under plans are not made. More important, finality was irrelevant in Hood because the debtor had failed in the first instance to list her student loans and have them included in her general dis- charge order. 541 U.S. at 444 (“Hood did not list her student loans in the bankruptcy proceeding, and the general discharge did not cover them.”). Accordingly, her creditor was not given the op- portunity to contest the discharge’s coverage of her debt because no order had been issued pur- porting to discharge it. In contrast, in this case Espinosa’s Plan specifically dealt with his student loan obliga- tions, and Funds had every opportunity prior to confirmation to object to its proposed treatment under the Plan. JA 26, 42-45. Following Espinosa’s full completion of his payments under his Plan, the bankruptcy court issued its dis- charge order, which order did not except Espinosa’s student loans from discharge (leaving aside the clerical error that was later rectified). JA 46, 48. Funds’ failure to make a timely objec- tion to the Plan, or otherwise challenge or appeal the orders confirming the plan and granting 29 Espinosa his discharge, are properly fatal to its arguments in this case. CONCLUSION For the foregoing reasons, as well as those offered by respondent, the decision of the court below should be affirmed. October 20, 2009 Respectfully submitted, G. Eric Brunstad, Jr. Counsel of Record Collin O'Connor Udell Matthew J. Delude DECHERT LLP 90 State House Square Hartford, Connecticut 06103 (860) 524-3999 Counsel for Amicus Curiae --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA43085015_0455%3A12. Public record. Not legal advice.