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Supreme Court of the United States
April 18, 2022, Argued; June 6, 2022, Decided
Justice Sotomayor delivered the [*8] opinion of the Court.
] The Bankruptcy Clause empowers Congress to establish “uniform Laws on the subject of Bankruptcies throughout the United States.” U. S. Const., Art. I, §8, cl. 4. The Clause’s requirement that bankruptcy laws be “uniform” is not a straitjacket: Congress retains flexibility to craft legislation that responds to different regional circumstances that arise in the bankruptcy system. Nor, however, is this uniformity requirement toothless. The question in this case is whether Congress’ enactment of a significant fee increase that exempted debtors in two States violated the uniformity requirement. Here, it did.
Bankruptcy cases involve both traditional judicial responsibilities and extensive administrative ones. Until 1978, bankruptcy judges handled both. This meant that, in addition to their traditional judicial function of ruling on disputed matters in adversarial proceedings, bankruptcy judges dealt with an array of administrative tasks, such as appointing private trustees where appropriate; organizing creditors’ committees; supervising the filing of required reports, schedules, and taxes; and monitoring cases for signs of abuse and fraud. See H. R. Rep. No. 99-764, p. 17 (1986).
Concerned that these dual roles were [*9] overloading bankruptcy judges and creating an appearance of bias, particularly because judges were responsible for supervising trustees that they themselves had appointed, Congress in 1978 piloted the United States Trustee Program (Trustee Program) in 18 of the 94 federal judicial districts. See id., at 17-18; Bankruptcy Reform Act of 1978, 92 Stat. 2549. To “rende[r] the separation of administrative and judicial functions complete,” the pilot program transferred the administrative functions previously handled by the bankruptcy courts to newly created U. S. Trustees, housed within the Department of Justice rather than the Administrative Office of the U. S. Courts. H. R. Rep. No. 95-595, p. 115 (1977).
In 1986, Congress sought to make the pilot Trustee Program permanent and to expand it nationwide, but met resistance from stakeholders in North Carolina and Alabama. See The United States Trustee System: Hearing on S. 1961 before the Subcommittee on Courts of the Senate Committee on the Judiciary, 99th Cong., 2d Sess., 129 (1986). As a result, Congress opted to expand mandatorily the Trustee Program to all federal judicial districts except for the six judicial districts in North Carolina and Alabama. Congress permitted only those [*10] six districts to continue judicial appointment of bankruptcy administrators, referring to that system as the Administrator Program. §§111-115, 302(d)(3), 100 Stat. 3090-3095, 3121-3123. The Administrator Program was scheduled to phase out in 1992, but Congress extended it by 10 years. §317(a), 104 Stat. 5115. At the end of those 10 years, however, Congress did not phase out the Administrator Program. Instead, it eliminated the sunset period and permanently exempted the six districts from the requirement to transition to the Trustee Program, while providing that each district could individually elect to do so. §501, 114 Stat. 2421-2422 (2000 Act); §302(d)(3), 100 Stat. 3121-3123. Each of the six districts continues to participate in the Administrator Program.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
2022 U.S. LEXIS 2681 *
ALFRED H. SIEGEL, TRUSTEE OF THE CIRCUIT CITY STORES, INC. LIQUIDATING TRUST, PETITIONER v. JOHN P. FITZGERALD, III, ACTING UNITED STATES TRUSTEE FOR REGION 4
Notice: The pagination of this document is subject to change pending release of the final published version.
Prior History: [*1] ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT
Siegel v. Fitzgerald (In re Circuit City Stores, Inc.), 996 F.3d 156, 2021 U.S. App. LEXIS 12845, 2021 WL 1679568 (4th Cir. Va., Apr. 29, 2021)
Disposition: 996 F. 3d 156, reversed and remanded.
districts, fee increase, geographically, cases, bankruptcy law, railroad, regional, exempted, proceedings, disparate, courts, funded, take effect, flexibility, nonuniform, isolated
Constitutional Law, Congressional Duties & Powers, Bankruptcy Clause, Bankruptcy Law, Plan Confirmation, Prerequisites, Approval of Costs & Expenses, Case Administration, Examiners, Officers & Trustees, United States Trustee, Appointment, Compensation, Bankruptcy, Filing Fees, Necessary & Proper Clause, Governments, Legislation, Interpretation, Federal Government, US Congress