                               PUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT


                              No. 14-1016


CHRISTOPHER M. COVERT; THOMAS E. HAWORTH; CAROL J. HAWORTH;
KIFLE AYELE; DWAN L. BROWN,

                Plaintiffs – Appellants,

           v.

LVNV FUNDING, LLC; RESURGENT CAPITAL          SERVICES   LIMITED
PARTNERSHIP; SHERMAN ORIGINATOR LLC,

                Defendants – Appellees.



Appeal from the United States District Court for the District of
Maryland, at Greenbelt.    Deborah K. Chasanow, Chief District
Judge. (8:13-cv-00698-DKC)


Argued:   December 11, 2014                 Decided:   March 3, 2015


Before NIEMEYER, SHEDD, and KEENAN, Circuit Judges.


Affirmed by published opinion.    Judge Shedd wrote the opinion,
in which Judge Niemeyer and Judge Keenan joined.


ARGUED: Laura J. Margulies, LAURA MARGULIES & ASSOCIATES, LLC,
Rockville, Maryland, for Appellants.      Ronald S. Canter, LAW
OFFICES OF RONALD S. CANTER, LLC, Rockville, Maryland, for
Appellees.    ON BRIEF:    Lawrence P. Block, Janet M. Nesse,
STINSON LEONARD STREET LLP, Washington, D.C., for Appellants.
SHEDD, Circuit Judge:

      Christopher M. Covert, Thomas E. Haworth, Carol J. Haworth,

Kifle Ayele, and Dwan L. Brown (collectively “Plaintiffs”) each

separately    filed   a   petition    for   individual   bankruptcy   under

Chapter 13 in Maryland in 2008.            LVNV Funding, LLC (“LVNV”) and

its   affiliated   companies   (collectively      “Defendants”)   held   an

unsecured claim against each Plaintiff and filed proofs of those

claims in each proceeding. 1         Each Chapter 13 plan was approved,

the Defendants’ claims were allowed, and each Plaintiff made

payments on these claims.       In March 2013, the Plaintiffs filed

this putative class action lawsuit in the District of Maryland,

alleging that the Defendants had violated the federal Fair Debt

Collection Practices Act (FDCPA) and various Maryland laws by

filing these proofs of claim without a Maryland debt collection

license.     The Defendants moved to dismiss and the court granted

the motion, finding that the state common law claims were barred

by res judicata and that the federal and state statutory claims

failed to state a claim because filing a proof of claim does not

constitute an act to collect a debt. For the reasons stated

below, we affirm the dismissal of all claims, but we do so on

res judicata grounds.

      1
       A proof of claim is a form filed by a creditor in a
bankruptcy proceeding that states the amount the debtor owes to
the creditor and the reason for the debt.


                                       2
                                         I.

       In 2008, each Plaintiff filed a petition for individual

bankruptcy   under    Chapter     13     in      the    Bankruptcy         Court    for   the

District    of   Maryland.        LVNV      had        acquired      a    defaulted       debt

against each Plaintiff from Sherman Originator, LLC, and LVNV

then filed a proof of unsecured claim based on these debts in

each    bankruptcy    proceeding        through          its    servicer,          Resurgent

Capital    Services    Limited     Partnership.                The       bankruptcy   court

confirmed a plan in each proceeding that provided for unsecured

claims to be paid in pro rata amounts.                      The Defendants’ claims

were allowed, and they received payments from the Chapter 13

Trustees on these claims.              At all relevant times, none of the

Defendants   was     licensed     to   do       business       as    a    debt   collection

agency in Maryland.

       In March 2013, the Plaintiffs filed this lawsuit in the

District of Maryland, alleging that the Defendants had violated

the FDCPA by filing proofs of claim without a Maryland debt

collection license.         The FDCPA defines a “debt collector” as

“any person ... who regularly collects or attempts to collect,

directly or indirectly, debts owed or due or asserted to be owed

or due another.”       15 U.S.C. § 1692a(6).                   Under the FDCPA, debt

collectors   “may     not   use   any       false,       deceptive,         or   misleading

representation or means in connection with the collection of any

debt,” including “[t]he threat to take any action that cannot

                                            3
legally      be taken,”        15     U.S.C.   §    1692e(5).     Under     the   Maryland

Code,       it   is    a   misdemeanor      for     a   person     to    “knowingly    and

willfully do business as a collection agency in the State unless

the person has a license.”                  Md. Code Ann., Bus. Reg. § 7-401.

The Plaintiffs allege that because the Defendants filed claims

in the bankruptcy proceedings without a license, the Defendants

were not legally entitled to collect those debts and thus took

an “action that cannot legally be taken” in violation of the

FDCPA.       The Plaintiffs also asked for an injunction deeming the

Defendants’           proofs     of    claim       invalid   and        instructing    the

Defendants to return to the Plaintiffs all money paid pursuant

to those claims. 2

        Plaintiff       Covert      filed   several      additional      Maryland     state

law   claims.          Specifically,        Covert      alleged    unjust    enrichment,

violations of the Maryland Consumer Debt Collection Act (MCDCA),

and violations of the Maryland Consumer Protection Act (MCPA).

        The Defendants moved under Federal Rule of Civil Procedure

12(b)(6) to dismiss all claims for failure to state a claim upon

which relief could be granted.                     The district court granted the

        2
       The Plaintiffs also asserted a claim seeking attorneys’
fees and reasonable expenses incurred in litigating this suit.
Because a request for expenses and attorneys’ fees is not a
separate claim, but rather a request for a particular form of
relief, this request necessarily fails because the underlying
action is barred by res judicata.        We therefore adopt the
reasoning of the district court dismissing this claim.



                                               4
motion.      Covert v. LVNV Funding, LLC, No. DKC 13-0698, 2013 WL

6490318 (D. Md. Dec. 9, 2013).                   It held that the Maryland unjust

enrichment claim was barred by res judicata, but that the FDCPA,

MCDCA,      and   MCPA    claims     could       not    be    barred    by    res   judicata

absent an adversary proceeding in each bankruptcy action, which

had not occurred.               Nonetheless, the district court dismissed

these    statutory        claims     on    the    merits       because       it   found    that

filing a proof of claim is not a “collection activity” within

the meaning of those statutes.                The Plaintiffs timely appealed.



                                             II.

       We    review      de   novo   the     district         court’s    dismissal        of   a

complaint for failure to state a claim under 12(b)(6).                                  United

States ex rel. Rostholder v. Omnicare, Inc., 745 F.3d 694, 700

(4th Cir. 2014).          Federal law governs the res judicata effect of

earlier bankruptcy proceedings.                    See Grausz v. Englander, 321

F.3d    467,      472    (4th    Cir.     2003)        (“We    look     to    res   judicata

principles developed in our own case law to determine whether an

earlier federal judgment, including the judgment of a bankruptcy

court, bars a claim asserted in a later action.”).

       “Under res judicata principles, a prior judgment between

the same parties can preclude subsequent litigation on those

matters      actually         and    necessarily             resolved    in       the     first

adjudication.”          In re Varat Enters., Inc., 81 F.3d 1310, 1314-15

                                              5
(4th Cir. 1996).       As we have applied it, the doctrine of res

judicata encompasses two concepts: claim preclusion, which bars

later litigation of all claims that were actually adjudicated or

that could have been adjudicated in an earlier action, and issue

preclusion, which bars later litigation of legal and factual

issues that were “actually and necessarily determined” in an

earlier     action.       Id.    at    1315    (internal     citation      omitted).

Rather than attempting to draw a sharp distinction between these

two aspects here, we conduct our analysis under the general res

judicata     framework,     as   has    been    our    practice    in     bankruptcy

cases.      We have held that a prior bankruptcy judgment has res

judicata effect on future litigation when the following three

conditions are met:

      1) [T]he prior judgment was final and on the merits,
      and rendered by a court of competent jurisdiction in
      accordance with the requirements of due process; 2)
      the parties are identical, or in privity, in the two
      actions; and, 3) the claims in the second matter are
      based upon the same cause of action involved in the
      earlier proceeding.

Id.   All three requirements are met here.

      The    first     requirement        is     easily      satisfied       because

confirmation of a bankruptcy plan is a final judgment on the

merits.     See, e.g., id. (“[T]he [bankruptcy plan] confirmation

order    constitutes    a   final      judgment       on   the   merits    with   res

judicata effect.”); In re Linkous, 990 F.2d 160, 162 (4th Cir.

1993) (same).     11 U.S.C. § 1327(a) states the general rule that

                                          6
“[t]he 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.”         It    is   this

provision that gives plan confirmation the res judicata effect

of a final judgment.                 Linkous, 990 F.2d at 162; see also In re

Beard,       112   B.R.        951,    954      (Bankr.         N.D.    Ind.       1990)       (“The

Bankruptcy Code gives confirmation a binding effect, through 11

U.S.C. § 1327.”).

       The    second       res       judicata      requirement          is    also       satisfied

because both the Plaintiffs and the Defendants in this action

were     parties      to       the    earlier       Chapter       13     plan      confirmation

proceedings.        Self-evidently, each Plaintiff participated in the

confirmation       proceedings          for     his       own    bankruptcy         plan.       See

Varat, 81 F.3d at 1316 n.6 (“A party for the purposes of former

adjudication        includes          one    who     participates            in    a     ...   plan

confirmation       proceeding.”).               Here,      the       Defendants         were   also

parties to these proceedings because of their financial interest

in the amount allotted to satisfy unsecured claims.                                    See Grausz,

321 F.3d at 473 (“In the bankruptcy context a party in interest

is    one    who   has     a    pecuniary       interest        in     the    distribution       of

assets to creditors.”).                 See also In re Snow, 270 B.R. 38, 40

(D.    Md.    2001)      (holding       that       both    debtor       and       creditor      were



                                                7
parties     to   Chapter        13    plan   confirmation       for     res       judicata

purposes).

       The third res judicata condition requires that Plaintiffs’

claims be “based upon the same cause of action involved in” the

plan    confirmation        proceedings.            Varat,     81   F.3d      at     1315.

Although we have said that “no simple test exists to determine

whether claims are based on the same cause of action for claim

preclusion purposes,” Grausz, 321 F.3d at 473 (quoting Pittston

Co.    v.   United   States,         199   F.3d   694,   704    (4th       Cir.    1999)),

generally, “claims are part of the same cause of action when

they    arise     out      of    the       same     transaction       or     series     of

transactions, or the same core of operative facts,” id. at 473

(quoting Varat, 81 F.3d at 1316).

       Applying these principles, it is clear that the Plaintiffs’

current claims are based upon the same cause of action as the

Defendants’ claims in the confirmed bankruptcy plans.                             To prove

his unjust enrichment claim, Covert would have to show that the

Defendants had accepted and retained a benefit under inequitable

circumstances, see Hill v. Cross Country Settlements, LLC, 936

A.2d 343, 351 (Md. 2007), because the claim on which he had paid

the    Defendants         was   procedurally         invalid.          Similarly,       to

establish their claims for reimbursement and injunctive relief,

Covert and the other Plaintiffs would have to show that they

made   payments      on    claims     that    are    invalid    because       they    were

                                             8
illegally filed.         Finally, to succeed on their statutory claims

for damages under the FDCPA, MCDCA, and MCPA, the Plaintiffs

would need to show that these statutes prohibited the Defendants

from filing the proofs of claim.                       A finding for the Plaintiffs

on any of these claims, therefore, would entail a holding that

the     Defendants’      proofs       of     claim       are     invalid,      which    would

directly      contradict       the    bankruptcy         court’s      plan     confirmation

order approving those proofs of claim as legitimate.

       We     have   held,     in    fact,       that     even      claims    that     do   not

directly contradict confirmed orders, but merely “assert rights

that    are    inconsistent         with”    those       orders,      are    sufficient      to

satisfy the third res judicata requirement.                           Varat, 81 F.3d at

1317.       See also Grausz, 321 F.3d at 475 (debtor’s malpractice

action was precluded by bankruptcy court’s prior order which had

allowed firm’s fees because a successful “malpractice action at

this stage could impair rights accorded the ... firm in the

final    fee    order”)      (internal        citation         omitted).        Our    sister

circuits       share    this    view       that       “once    a    bankruptcy       plan    is

confirmed,      its    terms    are        not       subject   to    collateral        attack”

through suits that raise claims inconsistent with the confirmed

plan.       Adair v. Sherman, 230 F.3d 890, 894 (7th Cir. 2000)

(dismissing          post-confirmation               FDCPA     action       alleging        that

creditor had inflated the amount of its claim).                             See also, e.g.,

In re Szostek, 886 F.2d 1405, 1413 (3d Cir. 1989) (creditor

                                                 9
could    not    challenge    amount    of       claim    in    confirmed       plan,   even

though a hearing to consider a Truth in Lending Act challenge to

that    claim    amount     had    been     scheduled         before    the     plan    was

confirmed).        In   sum,      because    all    of    the    Plaintiffs’       claims

implicitly ask the district court to reconsider the provisions

of the confirmed plans, they are based on the same cause of

action as the plan confirmation orders.                       Accordingly, all three

requirements are satisfied and the Plaintiffs’ claims are barred

by res judicata.



                                          III.

       Res judicata bars not only those claims that were actually

raised during prior litigation, but also those claims that could

have been raised, and the Plaintiffs in this case did indeed

have the opportunity to raise their statutory claims for relief

under the FDCPA, the MCDCA, and the MCPA during the bankruptcy

proceedings.      The Plaintiffs, as debtors in their own bankruptcy

proceedings, could have objected to LVNV’s proofs of claim at

the time they were filed on the basis that they violated these

consumer protection statutes.               See 11 U.S.C. § 502(a)-(b)(1) (if

a party in interest objects to a proof of claim, the bankruptcy

court will hold a hearing and will determine whether the claim

is     “unenforceable       against       the     debtor       ...     under     any   ...

applicable law”); see also Sampson v. Chase Home Finance, 667 F.

                                            10
Supp.     2d    692,    696-67     (S.D.W.V.        2009)    (plaintiffs’       consumer

protection       challenges       to   allowed       claim    were     barred      by     res

judicata after plan was confirmed because the challenges could

have    been     raised       during   the     bankruptcy      proceedings).              The

Plaintiffs could also have brought their affirmative claims for

damages    during       the    bankruptcy      process      under     Federal      Rule    of

Bankruptcy Procedure 7001(1), which provides that “a proceeding

to recover money or property” may be brought as an adversary

action.        But the Plaintiffs were not free to raise statutory

objections after the court had entered its confirmation order

when those objections were known or should have been known to

them during the bankruptcy proceedings.                      See Varat, 81 F.3d at

1317.     See also U.S. Dept. of Air Force v. Carolina Parachute

Corp.,    907    F.2d     1469,    1473   (4th      Cir.     1990)    (government,         as

creditor, could not bring post-confirmation statutory challenge

to plan’s assignment of government’s contract with debtor, even

though the government had already begun court proceedings to

terminate the contract); Grausz, 321 F.3d at 474 (res judicata

barred debtor’s malpractice claim after fee order because “by

the    time    the     bankruptcy      court      entered    the     final   fee    order,

[debtor] knew or should have known there was a real likelihood

that he had a malpractice claim against the firm.”).

       Here,     Plaintiffs       do    not       assert     that     any    information

necessary to make out their statutory claims was unavailable to

                                             11
them       at   the   time    their   plans      were   confirmed.     Accordingly,

Plaintiffs should have raised these statutory claims during the

plan confirmation hearings, and their failure to do so means

that these claims are barred by res judicata. 3                      See Varat, 81

F.3d at 1317 (“When all of the requirements for claim preclusion

are    satisfied,       the    judgment     in    the   first   case   acts    as   an

absolute bar to the subsequent action with regard to every claim

which was actually made ... and those which might have been

presented.”).

       One of the core purposes of bankruptcy is to collect all of

“the       debtor’s     assets        for   equitable      distribution       amongst

creditors.”           Kuehner v. Irving Trust Co., 299 U.S. 445, 452

       3
       We note that the Plaintiffs failed to raise a claim for
equitable relief under 11 U.S.C. § 502(j), which states that
“[a] claim that has been allowed ... may be reconsidered for
cause,” until oral argument in this case. We thus consider this
argument waived.     See Equal Rights Center v. Niles Bolton
Assocs., 602 F.3d 597, 604 n.4 (4th Cir. 2010) (arguments not
raised in appellant’s opening brief are deemed waived). We also
note, however, that the burden of establishing cause for
reconsideration under 502(j) rests with the moving party, In re
Starlight Group, LLC, 515 B.R. 290, 293 (Bankr.E.D.Va. 2014),
and “the clearest cause for reconsideration is the discovery,
subsequent to allowance, of new relevant facts or evidence that
could not have been discovered at an earlier stage, or the
discovery of clear error in the order of allowance,” In re Gold
& Silversmiths, Inc., 170 B.R. 538, 545 (Bankr. W.D.N.Y. 1994)
(quoting Collier on Bankruptcy 14th Ed., ¶ 57.23(3)). Here, the
Plaintiffs freely admit that no new relevant facts have come to
light since their plans were confirmed, and they allege no clear
error in the confirmation order.    As a result, they would be
unable   to  meet   their  burden  of   establishing  cause  for
reconsideration under § 502(j).



                                            12
(1937).     Were we to hold that proofs of claim are subject to

post-confirmation          challenge,         we    would     risk     undermining         this

purpose     by     creating       an     incentive        for    debtors         to    enrich

themselves at the expense of their creditors.                          Debtors would be

motivated to refrain from pursuing claims for monetary damages

until    after     a     plan   has     been       confirmed    in     order      to   obtain

additional       post-plan        assets      that     would     not    be       subject    to

distribution in bankruptcy.                The only recourse for creditors in

this situation would be to petition the court to revoke the

discharge order based on a showing of fraud under 11 U.S.C. §

727(d).     In the majority of cases, however, it is unlikely that

a showing of fraud could be made, leaving the creditors without

a remedy and frustrating bankruptcy’s goal of collecting and

equitably distributing all of a debtor’s assets.

        Moreover,        allowing        these        kinds     of     post-confirmation

collateral attacks on a bankruptcy plan’s terms would “destroy

the     finality       that     bankruptcy          confirmation       is       intended    to

provide.”        Adair, 230 F.3d at 895.              See also Grausz, 321 F.3d at

475 (allowing debtor’s malpractice action after confirmation of

final    attorneys’        fees       order    would     “undermine         a    fundamental

purpose     of     the    doctrine       of     res    judicata:       ...       encouraging

reliance on adjudication”) (internal citation omitted).                                   Thus,

allowing     the       kinds     of     post-confirmation            actions       that    the



                                               13
Plaintiffs bring in this case would frustrate two fundamental

aims of the bankruptcy process.



                                       IV.

       In deciding that these statutory claims were not barred by

res judicata, the district court relied on our opinion in Cen-

Pen Corp. v. Hanson, 58 F.3d 89 (4th Cir. 1995).                  In Cen-Pen, we

held that a creditor may challenge a plan’s treatment of his

secured claim as unsecured even after the plan is confirmed,

because “Bankruptcy Rule 7001(2) expressly requires initiation

of an adversary proceeding to determine the validity, priority

or extent of a lien.”           Id. at 93 (emphasis in original).                 We

then    held    that   “[i]f    an   issue     must    be   raised      through    an

adversary proceeding it is not part of the confirmation process

and, unless it is actually litigated, confirmation will not have

a preclusive effect.”       Id.

       Although    there   is   no   lien     at   issue    in   this    case,    the

district court nevertheless read Cen-Pen to create a blanket

rule that plan confirmation does not have preclusive effect as

to any issue that must have been decided through an adversary

process.       Covert, 2013 WL 6490318 at *5.           It then concluded that

the    Plaintiffs'     statutory     claims    for    damages    were    claims    to

“recover money or property,” and were thus not precluded because



                                        14
Federal    Rule   of     Bankruptcy       Procedure     7001(1)     requires           such

claims to be raised in adversary proceedings.                 Id.

       This reading of Cen-Pen is too broad.                First, Cen-Pen dealt

with    the    status     of    secured    claims      following       a    bankruptcy

proceeding, noting “the general rule that liens pass through

bankruptcy unaffected.”          Id. at 92.       We noted that this rule has

statutory support in 11 U.S.C. § 506(d)(2), which states that

liens are not voided “due only to the failure of any entity to

file a proof of such claim.”              Cen-Pen, 58 F.3d at 93.                Here, by

contrast, Plaintiffs challenge the legality of the process used

to collect an unsecured claim.                 There is no analogous rule or

statute establishing that claims challenging the filing process

pass through bankruptcy unaffected, nor any rule that unsecured

claims pass through bankruptcy unaffected.                  Indeed, the opposite

is true.      See 11 U.S.C. § 1327(c) (stating the general rule that

“[e]xcept as otherwise provided in the plan or in the order

confirming     the      plan,    the   property     [that    a     confirmed           plan

distributes] is free and clear of any claim or interest of any

creditor provided for by the plan.”).

       Second, our reasoning in Cen-Pen was motivated by the need

to   protect    the     rights    of   parties    in    interest       who       are    not

directly involved in a bankruptcy proceeding.                     In Cen-Pen, the

party   seeking      post-confirmation         reinstatement      of       its    secured

lien apparently did not participate in the debtors’ bankruptcy

                                          15
proceedings at all, and its liens were “nowhere mentioned or

otherwise acknowledged” in the debtors’ proposed plans.                        Cen-

Pen, 58 F.3d at 94.         Under such circumstances, we found that a

creditor’s lien could not be avoided simply because a plan had

been   confirmed     because     “[w]here     [an    adversary     proceeding]    is

required to resolve the disputed rights of third parties, the

potential    defendant     has   the   right    to    expect     that   the   proper

procedures    will   be    followed.”         Id.   at    93   (internal   citation

omitted).     Any such concerns over the notice necessary before

altering    the   rights    of   third    parties        are   inapplicable    here,

where the Plaintiffs seeking relief from the confirmation orders

are the debtors themselves, and they clearly suffered from no

lack of notice of the claims against them.

       The Cen-Pen exception simply does not apply in this case.

The Plaintiffs’ statutory claims are therefore subject to the

normal principles of res judicata, and are thus precluded by the

confirmation of the Chapter 13 plans.



                                         V.

       For the foregoing reasons, the judgment of the district

court is affirmed.

                                                                           AFFIRMED




                                         16
