Summary:
In split decision, the Fourth Circuit (following the similarly split decision from the 5th Circuit) held that the 2018 increase in fees paid by chapter 11 debtors to the U.S. Trustee Program applies to pending cases and violates neither due process nor the "uniform bankruptcy" clause of the U.S. Constitution.
Judge Quattlebaum, in dissent, however, would have found that because the U.S. Trustee program and the Bankruptcy Administrators in North Carolina and Alabama are “candidly and unapologetically nonuniform" in violation of the Constitution.
Commentary:
While this decision leaves the Bankruptcy Administrators in place here in North Carolina and there is no current circuit split that could lead the Supreme Court to tackle this issue, this question is pending in the 9th Circuit in USA Sales Inc. v. Office of the U.S. Trustee, 19-02133, 2021 BL 121542 (C.D. Cal. April 1, 2021). To read ABI’s report, click here. A decision there that the split systems were unconstitutional could lead to a grant of certiorari, but reviewing the question of "uniform Laws on the subject of Bankruptcies" could be a can of worms that would lead to challenges to state based exemptions, varying means test standards, ad nauseum.
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