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Supreme Court hears arguments over remedy for unconstitutional bankruptcy fees
Summary
At oral argument in case No. 22-1238, advocates disputed whether the remedy for a uniformity-clause violation in bankruptcy-fee administration should be a nationwide collection of higher fees or refunds to affected debtors; counsel also debated feasibility and whether Congress’s later, prospective fix affects the judicial remedy.
WASHINGTON — The Supreme Court on Tuesday heard argument in case No. 22-1238, the Office of the United States Trustee v. John Q. Hammond’s Fall 2006 LLC, over what remedy should follow a constitutional uniformity violation in bankruptcy-fee administration.
Petitioner’s counsel told the justices the question is what “appropriate remedy” follows the Court’s Siegel decision and argued that Congress’s intent favors a uniform increase in quarterly fees nationwide. "That means the appropriate remedy in this case is a mandate of higher fees nationwide," counsel told the Court, adding that limited retrospective collections could recoup about $3,800,000 that BA debtors collectively underpaid. Counsel warned that a refund approach, applied nationwide, would require taxpayers to "foot the bill for approximately $326,000,000," creating windfalls for some debtors who paid what Congress intended.
The arguments quickly turned on two…
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