Available at: https://scholarlycommons.law.emory.edu/ebdj/vol40/iss2/3
Abstract:
The Bankruptcy Clause’s call for uniformity is one of the more mysterious and unstudied constitutional constraints on bankruptcy, yet it is an ever-present policy consideration. It is a flexible guidepost that functions as a minor constraint on bankruptcy law. However, courts have recently allowed this guidepost to bend too much. When the courts upheld a split bankruptcy administration system as constitutionally uniform, it set the stage for needless, avoidable litigation. The most recent examples of such needless litigation are the Supreme Court cases of Siegel v. Fitzgerald and Office of the United States Trustee v. John Q. Hammons Fall 2006, LLC.
This Comment analyzes the Bankruptcy Uniformity Clause’s history, the need for its enactment, and its evolution. It also analyzes the circuit split leading to Siegel and John Q. Hammons and the motivations behind the Siegel decision. Next, this Comment examines remedies in post-Siegel cases, and where the future of Bankruptcy Uniformity Clause jurisprudence may be headed.
Finally, this Comment argues that the existence of a dual-scheme United States Trustee and Bankruptcy Administrator system is unconstitutional. This Comment proposes that Alabama and North Carolina join the other forty-eight states in the U.S. Trustee system to avoid pointless litigation like Siegel and John Q. Hammons.
Commentary:
Being published shortly before the Supreme Court decision in UST v. John Q. Hammons, this law review note does not have the benefit seeing that it has become increasingly clear that while the Justices do seem to appreciate having a bankruptcy case or two on their docket every term, since it gives them the opportunity for collegial statutory analysis on a topic over which few outside the bankruptcy bar will get incensed, whatever appetite SCOTUS has for tackling constitutional issues related to bankruptcy have largely been sated.
The recommendation by this note that to cure any nonuniformity between the two parallel systems would be to eliminate the Bankruptcy Administrators in favor of the U.S. Trustee program, however, seem largely based on the fact that geographically one exists in 48 state (not counting territories) and the other exists in only 2. That discrepancy has over the last forty years become a reality, so the allowance of geographical non-uniformity by Supreme Court precedent could be an ex post facto basis for the continuation of the dual systems.
The note, which by its nature is not conducive to extended research, also does not delve into the actual "on the ground" differences between the U.S. Trustee and Bankruptcy Administrator systems or even speak with stakeholders and interested parties regarding this issue. Those issues include the greater susceptibility of the UST program to the shifting political winds, the conflicts that can arise in BA districts due to judicial oversight of Chapter 13 Trustees, or the discrepancy in resources between the BAs and the Department of Justice, which can be most apparent in large Chapter 11 cases. Also unconsidered is the remaining issue of whether either the US Trustee, being part of the executive branch, or the Bankruptcy Administrators, being part of the judicial branch, are constitutional or impinge on the separation of powers. Perhaps this topic merits further research.
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