Document Type
Research Memorandum
Publication Date
2025
Abstract
(Excerpt)
The United States Trustee Program comprises eighty-eight of the ninety-four Federal judicial districts. The U.S. Trustee Program is funded through the United States Trustee System Fund, a large portion from debtor trustee fees. U.S. Trustee districts are required to implement the trustee fee structure outlined by the Section 1930 fee statute, which is updated through congressional amendment. However, the Judicial Conference, which oversees the Bankruptcy Administrator Program, had discretion to impose trustee fees outlined in section 1930 on debtors within the remaining six Federal judicial districts under their administration.
In the backdrop of this legislative scheme is the Uniformity Requirement of the Bankruptcy Clause, which provides that Congress shall have the power "[t]o establish . . . uniform Laws on the subject of Bankruptcies throughout the United States." Trustee fees not imposed uniformly across all Federal judicial districts are an unconstitutional violation of the Uniformity Requirement. In 2021, to comply with the Uniformity Requirement, Congress amended the language of section 1930(a)(7) requiring the Judicial Conference to impose trustee fees set out under paragraph six of that section. However, for a while, the question remained whether debtors who were charged higher trustee fees under this statute were entitled to a monetary refund.
This article analyzes the development of the now-clarified rule that debtors who have been overcharged bankruptcy fees under unconstitutional fee statutes are entitled to only prospective relief–not retrospective relief. Part I discusses the previous treatment of the question as to whether debtors charged higher trustee fees under an unconstitutional trustee fee statute are entitled to a monetary refund. Part II discusses the Supreme Court’s long-standing rule that taxpayers charged nonuniform higher taxes are entitled to monetary relief and the extension of the principle by courts in the context of bankruptcy.