Bloomberg Law
May 24, 2021, 4:07 PMUpdated: May 24, 2021, 9:03 PM

DOJ Program’s Bankruptcy Fee Hike Unconstitutional: 2d Cir. (1)

Daniel Gill
Daniel Gill

Congress’ temporary increase in fees to cover the costs of a Justice Department bankruptcy watchdog program is unconstitutional because it wasn’t applied uniformly, the Second Circuit ruled.

That fee increase, implemented through a 2017 amendment to a law governing bankruptcy fees, improperly charged higher amounts to Chapter 11 debtors in districts overseen by the DOJ’s U.S. Trustee Program, the U.S. Court of Appeals for the Second Circuit held Monday. The change didn’t apply to districts in two states governed by judicially-appointed bankruptcy administrators.

The appeals court’s invalidation of the 2017 fee change puts the court at odds with the Fourth ...