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Siegel v. Fitzgerald (In re Circuit City Stores, Inc.)

Siegel v. Fitzgerald (In re Circuit City Stores, Inc.)

United States Court of Appeals for the Fourth Circuit

December 8, 2020, Argued; April 29, 2021, Decided

No. 19-2240, No. 19-2255

Opinion

 [*159]  KING, Circuit Judge:

These consolidated appeals present two constitutional issues concerning changes made to the bankruptcy laws nearly four years ago. Alfred H. Siegel, Trustee of the Circuit City Stores, Inc., Liquidating Trust (the "Circuit City Trustee"), sought a ruling in 2019 on his liability for quarterly fees assessed under a 2017 Amendment to the bankruptcy fees provisions of the United States Code (the "2017 Amendment"). In response, the Bankruptcy Court for the  [*160]  Eastern District of Virginia ruled that the fees aspect of the 2017 Amendment is unconstitutional. See In re Circuit City Stores, Inc., 606 B.R. 260 (Bankr. E.D. Va. 2019), ECF No. 2 (the "Bankruptcy Opinion"). That ruling was based on a perceived lack of uniformity between quarterly fees in the two types of bankruptcy court districts, that is, U.S. Trustee districts and Bankruptcy Administrator [**3]  districts.

John P. Fitzgerald, III, the Acting U.S. Trustee for Region 4 (the "U.S. Trustee"), maintains that the Bankruptcy Opinion erred in its uniformity ruling and has appealed. The Circuit City Trustee, on the other hand, has cross-appealed a separate aspect of the Opinion that rejected his claim concerning retroactive application of the 2017 Amendment. In November 2019, the Circuit City Trustee and the U.S. Trustee jointly certified these appeals to this Court.1 We granted their joint petition for permission to appeal and consolidated the appeals. The U.S. Trustee's appeal is designated as No. 19-2240, and the Circuit City Trustee's cross-appeal is designated as No. 19-2255.

As explained below, we rule in favor of the U.S. Trustee in each appeal. That is, we reverse the Bankruptcy Opinion's uniformity decision challenged by the U.S. Trustee, and we affirm the Opinion's retroactivity decision challenged by the Circuit City Trustee. As a result, we remand to the bankruptcy court for such other and further proceedings as may be appropriate.

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996 F.3d 156 *; 2021 U.S. App. LEXIS 12845 **; 70 Bankr. Ct. Dec. 38; 2021 WL 1679568

In re: CIRCUIT CITY STORES, INCORPORATED; CIRCUIT CITY STORES WEST COAST, INCORPORATED; INTERTAN, INC.; VENTOUX INTERNATIONAL, INC.; CIRCUIT CITY PURCHASING COMPANY, LLC; CC AVIATION, LLC; CC DISTRIBUTION COMPANY OF VIRGINIA, INC.; CIRCUIT CITY PROPERTIES, LLC; KINZER TECHNOLOGY, LLC; ABBOTT ADVERTISING AGENCY, INCORPORATED; PATAPSCO DESIGNS, INC.; SKY VENTURE CORP.; PRAHS, INC.(N/A); XSSTUFF, LLC; MAYLAND MN, LLC; COURCHEVEL, LLC; ORBYX ELECTRONICS, LLC; CIRCUIT CITY STORES PR, LLC, Debtors. ALFRED H. SIEGEL, Trustee of the Circuit City Stores, Inc. Liquidating Trust, Plaintiff - Appellee, v. JOHN P. FITZGERALD, III, Acting United States Trustee for Region 4, Defendant - Appellant. ACADIANA MANAGEMENT GROUP, LLC; ALBUQUERQUE-AMG SPECIALTY HOSPITAL, LLC; CENTRAL INDIANA-AMG SPECIALTY HOSPITAL, LLC; LTAC HOSPITAL OF EDMOND, LLC; HOUMA-AMG SPECIALTY HOSPITAL, LLC; LTAC OF LOUISIANA, LLC; LAS VEGAS-AMG SPECIALTY HOSPITAL, LLC; WARREN BOEGEL; BOEGEL FARMS, LLC; THREE BO'S, INC., Amici Supporting Appellee.

Subsequent History: US Supreme Court certiorari granted by Siegel v. Fitzgerald, 142 S. Ct. 752, 211 L. Ed. 2d 471, 2022 U.S. LEXIS 333, 2022 WL 89272 (U.S., Jan. 10, 2022)

Reversed by, Remanded by Siegel v. Fitzgerald, 142 S. Ct. 1770, 213 L. Ed. 2d 39, 2022 U.S. LEXIS 2681, 2022 WL 1914098 (U.S., June 6, 2022)

Decision reached on appeal by, Remanded by Ventoux Int'l, Inc. v. FitzGerald (In re Circuit City Stores, Inc.), 2022 U.S. App. LEXIS 20018 (4th Cir., July 20, 2022)

Prior History:  [**1] Appeals from the United States Bankruptcy Court for the Eastern District of Virginia, at Richmond. (3:08-bk-35653). Kevin R. Huennekens, Bankruptcy Judge.

In re Circuit City Stores, Inc., 606 B.R. 260, 2019 Bankr. LEXIS 2121, 2019 WL 3202203 (Bankr. E.D. Va., July 15, 2019)

Disposition: AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

CORE TERMS

quarterly, districts, bankruptcy court, retroactive, disbursements, cases, Liquidating, bankruptcy case, geographically, fee increase, funded, regional, bankruptcy law, increased fee, non-uniform, proceedings, appeals, effective date, courts, similarly situated, unconstitutionally, contravenes, court of appeals, required to pay, impermissibly, cross-appeal, quotation, marks, unsecured creditor, pay fees

Bankruptcy Law, Judicial Review, Standards of Review, Clear Error Review, De Novo Standard of Review, Constitutional Law, Congressional Duties & Powers, Bankruptcy Clause, Governments, Federal Government, US Congress, Fundamental Rights, Procedural Due Process, Scope of Protection, Legislation, Effect & Operation, Retrospective Operation, Bankruptcy, Case Administration, Filing Fees, Prospective Operation