Article I, Section 8 of the United States Constitution empowers Congress, inter alia, “To establish . . . uniform Laws on the subject of Bankruptcies throughout the United States. . . .” In United States Trustee v. John Q. Hammons Fall 2006, decided on June 14, 2024, the Court ruled that the remedy for a Congressional violation of that provision was limited to the prospective relief of bringing the offending statute back into line with the Constitution. Retrospective relief, like damages, for parties injured by the violation, was not available according to the Court. The vote on the Court was 6-3, with Justices Gorsuch, Thomas, and Barrett dissenting.
Comment: The statute in question, 28 U.S.C. Section 1930(a)(7) (2017 ed.), unconstitutionally allowed the imposition of inequal fees on parties to Bankruptcy Cases across the country. By allowing the imposition of higher fees on some parties to Bankruptcy Cases, based solely on the geographic location of the Bankruptcy Court they were in, Congress exceeded its authority to enact “uniform” Bankruptcy Laws “throughout the United States.”[1] Recognizing that a damages remedy against the United States would cost the federal government a lot of money, the Court basically ruled that it could not impose that remedy on the taxpayers by its own fiat. That reasoning is entirely consistent with both the text and the spirit of the United States Constitution.[2]
Dan Rhea
[1] See Scott v. Fitzgerald, 596 U.S. 464 (2021).
[2] See, e.g., “The Appropriations Clause,” Art. I, § 9, U.S. Const; and the “Consent of the Governed Clause,” Declaration of Independence.
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