| Abstrakt: |
Circuit City Stores, Inc., filed a petition for financial relief under Chapter 11 of the U.S. Bankruptcy Code in the Eastern District of Virginia in 2008. The Eastern District of Virginia is a "Trustee district" that follows the U.S. Trustee Program for bankruptcy proceedings (as opposed to "Administrative districts," which do not). In 2010, the bankruptcy court confirmed Circuit City's joint-liquidation plan, in which the Circuit City debtors were required to pay quarterly fees to the U.S. Trustee until the completion of the proceedings. Circuit City's bankruptcy cases were still pending when the 2017 amendment to 28 U.S.C. 1930(a)(6)(B) went into effect. Following the amendment, petitioner claimed its quarterly fees increased by about $575,600. Recognizing the unequal quarterly fees assessed to Chapter 11 debtors in Trustee districts, petitioner argued that the 2017 amendment was impermissible because it was retroactive and that it violated the uniformity clauses in the U.S. Constitution. The bankruptcy court rejected the petitioner's retroactivity argument, but also found that the amendment "was unconstitutional under the Bankruptcy Clause." The Fourth Circuit, in keeping with a Fifth Circuit holding, reversed the bankruptcy court and found the 2017 amendment was not unconstitutional. Meanwhile, the Second and Tenth Circuits, by contrast, found the amendment unconstitutional and concluded the debtors who paid higher quarterly fees are entitled to monetary relief. Both petitioner and respondent filed briefs urging the Supreme Court to resolve the issue. [ABSTRACT FROM AUTHOR] |
