The question
What is the appropriate remedy for the Bankruptcy Clause uniformity violation identified in Siegel v. Fitzgerald, where Chapter 11 debtors in U.S. Trustee districts paid higher fees than debtors in Bankruptcy Administrator districts.
United States Trustee v. John Q. Hammons Fall 2006, LLC
What the Court decided
The Court held that prospective fee parity is the appropriate remedy, not a refund of the higher fees paid by debtors in U.S. Trustee districts. It reasoned that the constitutional violation in Siegel was nonuniformity rather than high fees, that the disparity lasted only from 2018 to 2021, and that 98% of the relevant class of debtors still paid uniform fees. Because Congress showed intense commitment to funding the U.S. Trustee program through user fees and a refund would cost approximately $326 million, the Court concluded Congress would have wanted prospective parity.
How the justices split
6-3The Court's opinion
Jackson, joined by Roberts, Alito, Sotomayor, Kagan, Kavanaugh
The nature of the violation determines the scope of the remedy. The violation in Siegel was nonuniformity, not high fees; the disparity was short lived from 2018 to 2021; and 98% of the relevant class of debtors still paid uniform fees. Asking what Congress would have willed, the Court found Congress showed intense commitment to higher fees in U.S. Trustee districts to keep the program funded by user fees, and a refund would cost about $326 million and disrupt the scheme. Congress would therefore have wanted prospective parity rather than a refund or a retrospective raising of fees.
Dissenting
Gorsuch, joined by Thomas, Barrett
Gorsuch filed a dissenting opinion, joined by Thomas and Barrett, disagreeing that prospective parity is the appropriate remedy for the constitutional violation.
How we know · 5 sourced claims
The Court held that prospective parity is the appropriate remedy for the fee disparity created by the statute held unconstitutional in Siegel.
Source: syllabus, Held
The violation identified in Siegel was nonuniformity of fees, not high fees.
Source: syllabus, Held
The fee disparity was short lived, lasting only from 2018 to 2021, and 98% of the relevant class of debtors still paid uniform fees.
Source: syllabus, Held
Retrospectively lowering fees for all relevant debtors in U.S. Trustee districts would cost approximately $326 million.
Source: syllabus, Held
Justice Jackson delivered the opinion of the Court, joined by Roberts, Alito, Sotomayor, Kagan, and Kavanaugh; Gorsuch filed a dissent joined by Thomas and Barrett.
Source: syllabus, lineup