DOJ Bankruptcy Fee Hike Ruled Invalid, Adding to Circuit Split

A temporary geographical disparity in how much Chapter 11 debtors had to pay in quarterly bankruptcy oversight fees was unconstitutional, the Tenth Circuit held.

A fee hike for the 48 states monitored by the Justice Department’s U.S. Trustee Program—from $30,000 to a maximum $250,000—didn’t match the fees required of debtors in Alabama and North Carolina for the first three quarters of 2018. Those two states are governed by bankruptcy administrators appointed by the U.S. Judicial Conference.

That difference in fees violated the Constitution’s Bankruptcy Clause, which requires that federal bankruptcy rules be uniform, a 2-1 panel of the U.S. Court ...