USA SALES INC v. OFFICE OF UNITED STATES TRUSTEE (2024)

ORDER

This matter is before our court following the U.S. Supreme Court's order granting certiorari, vacating our judgment, and remanding for further consideration in light of Office of the United States Trustee v. John Q. Hammons Fall 2006, LLC, ––– U.S. ––––, 144 S. Ct. 1588, ––– L.Ed.2d –––– (2024). See Off. of the U.S. Tr. v. USA Sales, Inc., ––– U.S. ––––, ––– S.Ct. ––––, ––––, ––– L.Ed.2d ––––, 2024 WL 3089472, at *1 (June 24, 2024).

This case concerns a provision of the Bankruptcy Judgeship Act of 2017 (“2017 Act”), which significantly increased the statutory fees for certain debtors in all but six judicial districts. USA Sales, Inc., a Chapter 11 debtor, sued for a refund of the increased fees, arguing that the 2017 Act (1) did not apply because USA Sales had filed for bankruptcy before the Act took effect; and (2) violated the uniformity requirement of the Bankruptcy Clause, U.S. Const. art I, § 8, cl. 4. The district court agreed with both arguments and ordered a refund. The Office of the United States Trustee (“UST”) timely appealed from the district court's summary judgment. We originally affirmed. See USA Sales, Inc. v. Off. of the U.S. Tr., 76 F.4th 1248, 1256 (9th Cir. 2023). On remand from the Supreme Court, we now reverse and remand.

1. As an initial matter, John Q. Hammons Fall 2006, LLC does not alter our original holding that the 2017 Act applied to USA Sales' bankruptcy proceeding even though its case was already pending when the Act took effect. See USA Sales, Inc., 76 F.4th at 1252-53.

2. In Siegel v. Fitzgerald, 596 U.S. 464, 480-81, 142 S.Ct. 1770, 213 L.Ed.2d 39 (2022), the Supreme Court held that the 2017 Act violated the uniformity requirement of the Bankruptcy Clause but left open the question of the appropriate remedy. In John Q. Hammons Fall 2006, LLC, the Supreme Court answered that question, holding that the appropriate remedy was prospective parity, not a refund for debtors who paid unconstitutional fees or retrospectively raising fees. See 144 S. Ct. at 1592, 1596. In light of John Q. Hammons Fall 2006, LLC, we reverse and remand the district court's determination that USA Sales is entitled to a refund.