Oral Argument: United States Trustee v. John Q. Hammons Fall 2006, LLC | Case No. 22-1238 | Date Argued: 1/9/24 | Date Decided: 6/14/24

Oral Argument: United States Trustee v. John Q. Hammons Fall 2006, LLC | Case No. 22-1238 | Date Argued: 1/9/24 | Date Decided: 6/14/24

Link to Docket: Here.

Background:

Section 1004(a) of the Bankruptcy Judgeship Act of 2017, Pub. L. No.115-72, Div. B, 131 Stat. 1232 (28 U.S.C. 1930(a)(6)(B) (2018)), amended the schedule of quarterly fees payable to the United States Trustee in certain pending bankruptcy cases. In Siegel v. Fitzgerald, 142 S. Ct. 1770 (2022), this Court held that that provision contravened Congress's constitutional authority to "establish * * * uniform Laws on the subject of Bankruptcies," U.S. Const. Art. I, § 8, Cl. 4, because it was initially applied only in the 88 federal judicial districts that have United States Trustees but not in the 6 districts that have Bankruptcy Administrators. This Court left open the question of "the appropriate remedy" for the violation. Siegel, 142 S. Ct. at 1783.

Question Presented: Whether the appropriate remedy for the constitutional uniformity violation found by this Court in Siegel, supra, is to require the United States Trustee to grant retrospective refunds of the increased fees paid by debtors in United States Trustee districts during the period of disuniformity, or is instead either to deem sufficient the prospective remedy adopted by Congress or to require the collection of additional fees from a much smaller number of debtors in Bankruptcy Administrator districts.

Holding: Prospective parity (i.e., requiring equal fees for otherwise identical Chapter 11 debtors going forward) is the appropriate remedy for the short-lived and small disparity created by the fee statute held unconstitutional in Siegel v. Fitzgerald.

Result: Reversed and remanded.

Voting Breakdown: 6-3. "Justice Jackson delivered the opinion of the Court, in which Chief Justice Roberts and Justices Alito, Sotomayor, Kagan, and Kavanaugh joined. Justice Gorsuch filed a dissenting opinion, in which Justices Thomas and Barrett joined.

Link to Opinion: Here.

Oral Advocates:

• For Petitioner: Masha G. Hansford, Assistant to the Solicitor General, Department of Justice, Washington, D.C.
• For Respondents: Daniel L. Geyser, Dallas, Tex.