Lawyer Commentary Mondaq United States Supreme Court Alert: Supreme Court Finds U.S. Trustee Fee Increase Unconstitutional

Supreme Court Alert: Supreme Court Finds U.S. Trustee Fee Increase Unconstitutional

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In a decision rendered on June 6, 2022, Justice Sotomayor authored the Supreme Court's unanimous decision in the case Siegel v. Fitzgerald, holding that a statutory increase in United States Trustee's fees violated the 'uniformity' requirement of the Bankruptcy Clause set forth in Article I, ' 7, cl. 4 of the United States Constitution, which empowers Congress to establish 'uniform Laws on the subject of Bankruptcies throughout the United States.'1

As the Court explained, Congress implemented the United States Trustee Program, whereby the United States Trustee's Office monitors bankruptcy cases.2 Federal districts in North Carolina and Alabama, however, opted out of the program, each state choosing instead to have a state-wide bankruptcy administrator monitor bankruptcy cases (the 'Administrator Program').3 While the Trustee Program and the Administrator Program conduct the same core administrative functions, the two programs are funded differently. The Trustee Program is funded entirely by quarterly fees paid by debtors to the United States Trustee System Fund pursuant to 28 U.S.C. ' 1930(a); the Administrator Program is funded by the general judiciary budget of its relevant jurisdictions.4

In 2017, Congress amended 28 U.S.C. ' 1930(a) to impose a...

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