# United States Court of Appeals
For the Seventh Circuit Chicago, Illinois 60604 June 24, 2008



### Before

F RANK H. E ASTERBROOK , Chief Judge
J OEL M. F LAUM , Circuit Judge

M ICHAEL S. K ANNE , Circuit Judge



### No

. 07

- 1286

N AJIB Z EDA N

. , Plaintiff

- Appellant ,

v.

B ASEM E. H ABASH and S USAN H ABASH , Defendant s

- Appellee s

. Appeal from the United States District Court for the Northern District of Illinois , Eastern Division.

No. 06 C 4047 Elaine E. Bucklo, Judge

.

Order Chief Judg e Frank H. Easterbrook’s concurrence to the opinion in this case issued on June 16 , 2008, has been modified. Please substitute the attached concurrence.No. 07

- 1286 Zedan v. Habash
E

asterbrook , Chief Judge , concurring. Although I join the court’s opinion without reservation, a few additional observations about appellate jurisdiction are appropriate. The terminating order of an adversary action in bankruptc y is a “final decision” for the pu r pose of 28 U.S.C. §158(d). Many decisions in this circuit, and elsewhere, so hold. Any e f fort to sort the final decisions of adversary proceedings into appealable and non

appealable bins would lead to pointless grief and expense. A clear rule on jurisdictional issues beats a fuzzy standard. See Budinich v. Becton Dickinson & Co ., 486 U.S. 196 (1988) . So we have appellate jurisdiction because Zedan filed an adversary action, in which both the bankruptcy judge and the distri ct judge rendered f i nal decisions. But should this have happened? As the court’s opinion observes, Fed. R. Bankr. P. 4004(d) and 7001(4) say that cred itors must initiat e adversary actions if they want the court to block or revoke a discharge. These rules a ppear to be inconsistent with a statute that classifies objections to discharge as contested matters in core pr o ceedings. 28 U.S.C. §157(b)(2)(J); Kontrick v. Ryan , 540 U.S. 443, 453 (2004). Rule 7001(4), which go verns this subject (Rule 4004(d) is just a pointer), was adopted before 1984 , when §157(b)(2)(J) was enacted, and has not been revisited. If Zedan’s objection had been presented as a contested matter, then we would lack appellate jurisdiction. A decision rebuffing one objection to another litigant’ s request is
not “final” in the sense that ma t ters for appellate review. After the bankruptcy judge found Zedan’s position wanting, the question whether Habash’s debts would be discharged remained open; the judge did not reach the ultimate decision until a fter Zedan’s appeal had been argued in this court. One might as well a p peal from an order denying a motion for discovery or a grant of summary judgment on some but not all of a litigant’s legal theories. But because Zedan’s motion was handled as an adversa ry a ction, the disposition is appealable. I do not think that we can dismiss the appeal from theNo. 07

- 1286 Page 2
terminating decision of the pr o ceeding actually conducted, just because the bankruptcy court might have conducted a different kind of proceeding.
Even if we we re to hold that §157(b)(2)(J) supersedes Rule 7001(4), the fact would
remain that this was an adversary action. I recognize that adversary actions can be appropriate within core proceedings, but an objection to a discharge is better handled as a
contested matter, as every bankruptcy entails a potential dispute about discharge. Arguments pro and con about discharge do not (at least, need not) entail third parties, as prefe r ence

- recovery actions commonly do. As this case shows, the choice between contested ma tters and adversary procee dings affects appellate review as well as the style and service list of papers filed in the
ban k

ruptcy court. I do not see any good reason why the rules should employ a form that can produce appellate review of one creditor’s argu ments against a di s charge, b efore the bankruptcy court has decided whether the debtor receives one. After Zedan filed his appeal, the bankruptcy judge might have denied Habash a discharge fo l lowing an objection from the Trustee or a creditor who filed w ithin the deadline. Sep a rating Zedan’s arguments from those of other participants in the bankruptcy, and di s patching them for immediate appeal while the bankruptcy judge has yet to decide the main que stion, presents abstract issues and squanders judicial r esources. The appropriate co mmittees should take a look at this subject.