Louis B. Bullard v. Blue Hills Bank

Whether a debtor in a bankruptcy case has a right to appeal a determination in a lower court hinges upon whether such determination is “final” within the meaning of 28 U.S.C. § 158 (“§ 158”). Bullard contends that the denial of a plan’s confirmation is a final order that entitles him to immediate appeal. Specifically, Bullard asserts that the finality requirement of § 158 encompasses discrete proceedings in bankruptcy cases and that the denial of a plan confirmation therefore counts as a decision that is immediately appealable. Blue Hills Bank, on the other hand, contends that, because debtors can continue to seek relief after a denial of plan confirmation, a denial is not a final order entitling a debtor in bankruptcy to immediate appeal. Specifically, Blue Hills Bank argues that only proceedings that terminate an action are final and appealable; because denial of a plan confirmation does not terminate an action, a debtor in such a position is not entitled to immediate appeal.

THE FINALITY REQUIREMENT

Bullard asserts that a bankruptcy case is a collection of distinct “proceedings,” and each of these proceedings, including the denial of a plan confirmation, may be “final” without disposing of a bankruptcy case in its entirety. Bullard argues that proceedings, decisions, judgments, orders, and decrees of a bankruptcy court are final—and thus immediately appealable—if they determine discrete issues within a bankruptcy case regardless of whether the order disposes of the entire case. Bullard draws from the Bankruptcy Act of 1898, which bestowed jurisdiction over final or interlocutory appeals from bankruptcy “proceedings,” to assert that the term “proceedings” does not limit appeals to those that were dispositive of a bankruptcy case. Furthermore, Bullard asserts that a “decision” in a bankruptcy case may refer either to a judgment that disposes of the case or another ruling in a case because a “decision,” by definition, merely includes “a judicial or agency determination after consideration of the facts and law.” Likewise, Bullard asserts that an “order” includes a ruling that does not necessarily dispose of the merits of a case, and, as an example, points to the Court’s interpretation of the Judiciary Act of 1789, which distinguished between judgments and orders in that the latter was a broader term. As to finality, Bullard argues that, in the context of a bankruptcy case, an order may be final if it determines a “discrete dispute” but does not decide the totality of the rights of the parties in a given case. More particularly, Bullard asserts that “[t]he relevant ‘finality’ inquiry is whether the lower court fully and conclusively determined the substantive rights of the parties with respect to the proceeding in question.”

Blue Hills Bank counters that an order is only “final” when it “terminate[s] an action.” In support, Blue Hills Bank asserts that courts generally disfavor appeals on smaller decisions within a case and generally apply a “single-appeals rule,” which provides efficiency to the courts and avoids disruption and increased costs that “mid-proceeding appeal[s]” would create. Following this reasoning, Blue Hills Bank argues that Congress’s decision to include the term “order” in Section 158(a) does not eliminate the single-appeal rule, even if a “proceeding” is the proper unit of judicial measurement for determining finality. Instead, Blue Hills Bank contends that, since an entire bankruptcy case is a “single judicial unit,” a debtor may only appeal once, even if the case involves numerous claims and numerous parties. Thus, Blue Hills Bank concludes that a ruling is only “final” if it terminates a case in its entirety.

WHETHER THE DENIAL OF A PLAN IS A FINAL ORDER

Bullard argues that a denial of plan confirmation is final and thus immediately appealable as of right because such a denial is an order that determines a particular issue or proceeding resulting from a debtor’s plan proposal and that conclusively denies the debtor any relief. First, Bullard argues that just as confirmation of a proposed plan is a “core proceeding,” which a bankruptcy court may enter final judgment upon, denial of a proposed plan is also a proceeding that a bankruptcy court may enter final judgment upon. Bullard supports this assertion by pointing out that denial and confirmation seek to answer the same question: the validity of a proposed plan under the Bankruptcy Code. Second, Bullard contends that such a ruling is final because denying confirmation of a plan is a definitive ruling on the debtor’s right to obtain relief in the confirmation proceeding. In furtherance of this argument, Bullard asserts that, if a denial of a plan confirmation was not such a definitive ruling, then the same would be true of confirmation of a plan; however, this would be contrary to Supreme Court precedent.

In opposition, Blue Hills Bank contends that an order in a bankruptcy case is only final if the order results in plan confirmation or dismissal of the case. Indeed, Blue Hills Bank points out that before such an order and even after an order of denial, a debtor remains able to amend a plan at any time. Because a debtor is able to amend a plan, Blue Hills Bank argues, the confirmation procedure is a singular process that continues even if during and after an amendment. Furthermore, Blue Hills Bank contends that the ability to amend a plan also means that even if a court denies confirmation, such a ruling would not affect the rights of the parties in a bankruptcy case. Conversely, Blue Hills Bank asserts that confirmation and dismissal are final rulings because both such rulings effectively entail shifts in the rights of the parties to a bankruptcy case. Lastly, Blue Hills Bank points out that the facts of this case show that plan amendments and denials with leave to amend are not final orders: Bullard amended his own plan three times, which continued the confirmation process.