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Clinton Nurseries, Inc. v. Harrington (In re Clinton Nurseries, Inc.)

United States Bankruptcy Court for the District of Connecticut, Hartford Division

August 28, 2019, Decided

CHAPTER 11, CASE No. 17-31897 (JJT), CASE No. 17-31898 (JJT), CASE No. 17-31899 (JJT), CASE No. 17-31900 (JJT), (Jointly Administered under Case No. 17-31897 (JJT))

Opinion

 [*102]  RE: ECF Nos. 672, 725, 726, 743, 773.

RULING AND ORDER CONVERTING CONTESTED MOTION TO ADVERSARY PROCEEDING AND MEMORANDUM OF DECISION DISMISSING ADVERSARY PROCEEDING FOR FAILURE TO STATE CLAIMS UPON WHICH RELIEF CAN BE GRANTED

I. INTRODUCTION

In his famous Lochner dissent, Justice Holmes wrote:

This case is decided upon an economic theory which a large part of the country does not entertain. If it were a question whether I agreed with that theory, I should desire to study it further and long before making up my mind. But I do not conceive that to be my duty, because I strongly believe that my agreement or disagreement has nothing to do with the right of a majority to embody their opinions in law. . . . Some . . . laws embody convictions or prejudices which judges are likely to share. Some may not. But a Constitution is not intended to embody a particular [**2]  economic theory . . . . It is made for people of fundamentally differing views, and the accident of our finding certain opinions natural and familiar, or novel, and even shocking ought not to conclude our judgment upon the question whether statutes embodying them conflict with the Constitution of the United States.

Lochner v. New York, 198 U.S. 45, 75-76, 25 S. Ct. 539, 49 L. Ed. 937 (1905) (Holmes, J., dissenting).1 Although those words concerned a different law passed in a different era that was struck down under a different part of the Constitution, they are apt here.

The related debtors, Clinton Nurseries, Inc.; Clinton Nurseries of Maryland, Inc.; Clinton Nurseries of Florida, Inc.; and Triem LLC (collectively, "Debtors") filed a Motion to Determine Amount of United States Trustee Fees Pursuant to 28 U.S.C. § 1930(a)(6) ("Motion," ECF No. 672), making two principal arguments: (1) that the 2017 amendments to 28 U.S.C. § 1930(a)(6), made through the Bankruptcy Judgeship Act of 2017, Pub. L. 115-72, Div. B, § 1004(a); 131 Stat. 1232 ("2017 Amendments"), created non-uniform bankruptcy law, in violation of Article 1, Section 8, Clause 4 of the United States Constitution ("Bankruptcy Clause"), and (2) that the 2017 Amendments transformed the Debtors' Chapter 11 quarterly fees into an unconstitutional user fee.

The United States Trustee for Region 2, William K. Harrington ("UST"), filed two  [*103]  objections, one procedural ("Procedural [**3]  Objection," ECF No. 725) and one substantive ("Substantive Objection," ECF No. 726). In the Procedural Objection, the UST argues that the claims raised in the Motion must be brought in an adversary proceeding, and so the Motion should be denied. In the Substantive Objection, the UST argues that the 2017 Amendments do not violate either the Bankruptcy Clause or the Fifth Amendment to the United States Constitution.

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608 B.R. 96 *; 2019 Bankr. LEXIS 2735 **; 2019 WL 4072654

IN RE: CLINTON NURSERIES, INC.; CLINTON NURSERIES OF MARYLAND, INC.; CLINTON NURSERIES OF FLORIDA, INC.; and TRIEM LLC, DEBTORS.CLINTON NURSERIES, INC.; CLINTON NURSERIES OF MARYLAND, INC.; CLINTON NURSERIES OF FLORIDA, INC.; and TRIEM LLC, PLAINTIFFS v. WILLIAM K. HARRINGTON, UNITED STATES TRUSTEE, REGION 2, DEFENDANT.

CORE TERMS

quarterly, districts, adversary proceedings, cases, marks, quotation, user fee, convert, non-uniform, pleadings, powers, motion to dismiss, bankruptcy law, argues, holds, allegations, fee increase, pending case, as-applied, misapplied, railroad, courts, factual allegations, approximation, cognizable, passengers, contested, quarters, facial, fee schedule

Bankruptcy Law, Procedural Matters, Jurisdiction, Civil Procedure, Justiciability, Standing, Injury in Fact, Adversary Proceedings, Causes of Action, Contested Matters, Preliminary Considerations, Jurisdiction, Subject Matter Jurisdiction, Bankruptcy, Case Administration, Bankruptcy Court Powers, Pleadings, Complaints, Requirements for Complaint, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Constitutional Law, Congressional Duties & Powers, Bankruptcy Clause, Examiners, Officers & Trustees, United States Trustee, Governments, Legislation, Interpretation, The Presidency, Bill of Rights, Fundamental Rights, Eminent Domain & Takings