Amicus Curiae Brief — Office of the United States Trustee, Petitioner v. John Q. Hammons Fall 2006, LLC, et al.

No. 22-1238

In the Supreme Court of the United States

OFFICE OF THE UNITED STATES TRUSTEE, PETITIONER,

v.

JOHN Q. HAMMONS FALL 2006, LLC, ET AL.,

RESPONDENTS.

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

BRIEF OF AMICUS CURIAE THE CHAMBER OF

COMMERCE OF THE UNITED STATES OF AMERICA

IN SUPPORT OF RESPONDENTS

Jennifer B. Dickey

Jonathan D. Urick

U.S. C HAMBER

L ITIGATION C ENTER

1615 H Street, NW

Washington, DC 20062

Steven P. Lehotsky

Counsel of Record

LEHOTSKY KELLER

COHN LLP

200 Massachusetts Ave., NW

Washington, DC 20001

(512) 693-8350

steve@lkcfirm.com

Andrew B. Davis

Michael C. Cotton

LEHOTSKY KELLER

COHN LLP

408 W. 11th Street, 5th Floor

Austin, TX 78701

T AB LE O F C O N TE N T S

TABLE OF AUTHORITIES ................................................... ii

INTEREST OF AMICUS CURIAE ......................................... 1

SUMMARY OF ARGUMENT ................................................. 1

ARGUMENT ........................................................................ 3

I. The Appropriate Remedy Must Include

Retrospective Relief to Respondents and Other

Businesses Who Paid Unconstitutional Fees. ..... 3

A. This Court’s precedents require equalizing

treatment, which can only be accomplished

through retrospective relief. ........................... 3

B. Cases where there is no monetary injury

cannot support a purely prospective remedy

in a case about the payment of

unconstitutional fees. ....................................... 7

C. Supposed congressional intent does not

dislodge this Court’s precedents outlining

permissible remedial solutions. ...................... 9

II. Retrospectively Raising Fees on Debtors in BA

Districts Would Be Unlawful and Practically

Impossible to Achieve. ........................................ 11

A. This Court has consistently employed levelup remedies to relieve past economic harm. 12

B. Collecting fees would cause serious harm to

debtors and creditors. ................................... 15

CONCLUSION ........................................................... 17

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ii

T AB LE O F A U TH O R I TIE S

Page(s)

Cases

Allegheny Pittsburgh Coal Co. v. Cnty.

Comm’n of Webster Cnty.,

488 U.S. 336 (1989) .................................................... 13

Barr v. Am. Ass’n of Pol. Consultants, Inc.,

140 S. Ct. 2335 (2020) ............................ 8, 9, 10, 12, 14

In re Buffets LLC.,

979 F.3d 366 (5th Cir. 2020) ..................................... 16

Butz v. Economou,

438 U.S. 478 (1978) ...................................................... 7

Califano v. Goldfarb,

430 U.S. 199 (1977) .................................................... 13

Califano v. Westcott,

433 U.S. 76 (1979) ................................................ 12, 13

Carpenter v. Shaw,

280 U.S. 363 (1930) ................................................ 6, 10

In re Circuit City Stores, Inc.,

996 F.3d 156 (4th Cir. 2021) ..................................... 16

Dep’t of Agric. v. Moreno,

413 U.S. 528 (1973) .................................................... 13

Frontiero v. Richardson,

411 U.S. 677 (1973) .................................................... 13

iii

Heckler v. Matthews,

465 U.S. 728 (1984) ...................................................... 4

Hillsborough Twp. v. Cromwell,

326 U.S. 620 (1946) .................................................... 13

Iowa-Des Moines Nat’l Bank v. Bennett,

284 U.S. 239 (1931) .................3, 4, 5, 11, 12, 14, 15, 16

Jimenez v. Weinberger,

417 U.S. 628 (1974) .................................................... 13

In re John Q. Hammons Fall 2006,

15 F.4th 1011 (10th Cir. 2021) .................................. 16

Levin v. Com. Energy, Inc.

560 U.S. 413 (2010) .................................................... 13

Lucia v. SEC,

138 S. Ct. 2044 (2018) ................................................ 11

McKesson Corp. v. Div. of Alcoholic Beverages

& Tobacco, Dep’t of Bus. Regul. of Fla.,

496 U.S. 18 (1990) ................................ 4, 5, 6, 9, 10, 12

Mont. Nat’l Bank v. Yellowstone Cnty,

276 U.S. 499 (1928) ...................................... 4, 5, 11, 12

Newsweek, Inc. v. Fla. Dep’t of Revenue,

522 U.S. 442 (1998) ...................................................... 6

Nixon v. Fitzgerald,

457 U.S. 731 (1982) ...................................................... 7

Reich v. Collins,

513 U.S. 106 (1994) ............................................ 5, 6, 10

iv

Sessions v. Morales-Santana,

582 U.S. 47 (2017) .........................7, 8, 9, 10, 12, 13, 14

Siegel v. Fitzgerald,

596 U.S. 464 (2022) ...................................................... 2

Stern v. Marshall,

564 U.S. 462 (2011) .................................................... 10

Welsh v. United States,

398 U.S. 333 (1970) .................................................... 14

Statutes

Bankruptcy Judgeship Act of 2017 (2017 Act),

Pub. L. No. 115-72, Div. B, 131 Stat. 1229 ................ 2

Other Authorities

Elizabeth Warren & Jay L. Westbrook, The

Success of Chapter 11: A Challenge to the

Critics, 107 Mich. L. Rev. 603 (2009) ........................ 2

I N TE R E S T O F A M IC US C UR I AE

The Chamber of Commerce of the United States of

America is the world’s largest business federation.1 It represents approximately 300,000 direct members and indirectly represents the interests of more than three million

companies and professional organizations of every size, in

every industry sector, and from every region of the country. An important function of the Chamber is to represent

the interests of its members in matters before Congress,

the Executive Branch, and the courts. To that end, the

Chamber regularly files amicus briefs in cases, like this

one, that raise issues of concern to the Nation’s business

community.

The Chamber has a strong interest in this case, as

businesses across industries are routinely involved in

bankruptcies—both as debtors and creditors. America’s

bankruptcy system plays a vital role in maintaining the

long-term health of the Nation’s economy. And when businesses are subject to unconstitutional laws that cause

monetary harm, it is essential that courts supply remedies

that comport with the Constitution and this Court’s precedents, thereby providing stability and predictability for

the Nation’s business community.

S UM M AR Y O F A R G U M E N T

The bankruptcy system is essential to American businesses and to the workers and communities that rely on

those businesses to provide jobs and opportunity. This is

especially true of Chapter 11, which allows failing businesses to reorganize into once-again successful

Pursuant to this Court’s Rule 37.6, amicus curiae affirms that

no counsel for a party authored this brief in whole or in part or made

a monetary contribution intended to fund the preparation or submission of this brief, and that no person other than amicus curiae,

its members, and its counsel made such a monetary contribution.

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companies. Chapter 11 “create[s] value for a business’s

creditors, workers, investors, and communities.” Elizabeth Warren & Jay L. Westbrook, The Success of Chapter 11: A Challenge to the Critics, 107 Mich. L. Rev. 603,

604 (2009). The American business community accordingly depends on Congress to establish uniform bankruptcy laws that treat businesses fairly and equally.

This Court has already held that the Bankruptcy

Judgeship Act of 2017 did not treat businesses fairly and

equally. That Act violated the Bankruptcy Clause of the

Constitution because debtors in the United States Trustee (“Trustee”) Program were charged higher fees than

debtors in the Bankruptcy Administrator (“BA”) Program. Siegel v. Fitzgerald, 596 U.S. 464, 468 (2022).

The question now is: what is the remedy for that past

constitutional violation? The only sound, workable, and

constitutionally permissible remedy is the remedy that

every court to have considered this question has chosen:

a full refund of all unconstitutional fees. Specifically, Respondents should have been charged fees under the fee

statute in place before the Bankruptcy Judgeship Act of

2017, rather than under the unconstitutional fee structure introduced in that Act. Thus, for businesses, like Respondents, that have already paid the unconstitutional

fees, the United States should issue a refund for the difference between what was actually paid and what was

constitutionally owed.

The Government resists this straightforward remedy

in favor of two other proposed remedies—a purely prospective remedy that is no remedy at all, and a fallback

remedy that is highly unworkable at best. The Government’s preferred remedy is for this Court to ignore the

unequal treatment already inflicted on American businesses and merely “mandate [] equal, increased fees in

[Trustee] and BA districts going forward.” Petitioner’s

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Br. 11 (emphasis added). That prospective remedy does

nothing to equalize the treatment of Chapter 11 debtors

in Trustee and BA districts who have already paid their

fees. It instead leaves debtors with no relief for excessive, non-uniform fees that this Court has already held

violate the Bankruptcy Clause of the Constitution. In

short, it is a remedy in name only and has no basis in this

Court’s precedent.

Alternatively, the Government argues that if backward-looking relief is needed (and it is), Respondents’ fees

should remain in the Government’s coffers, and fees in BA

districts should be retrospectively raised on non-parties.

But that remedy would sow utter chaos into America’s

bankruptcy courts. It would entail retroactively increasing fees on non-parties—Chapter 11 debtors in BA districts—many of whose cases are now permanently closed.

Reopening closed cases to collect enormous fees from

debtors (and potentially creditors) would be wildly impractical, if not impossible. It would introduce confusion

and disorder into bankruptcy courts in BA districts—affecting debtors and creditors alike—and leave debtors in

Trustee districts, like Respondents here, with no relief

from the Government’s unconstitutional fees.

A R G UM E N T

I. The Appropriate Remedy Must Include Retrospective Relief to Respondents and Other Businesses Who Paid Unconstitutional Fees.

A. This Court’s precedents require equalizing

treatment, which can only be accomplished

through retrospective relief.

This Court has repeatedly held that the only way to

remedy claims of unequal treatment in violation of the

Constitution is to equalize treatment. See, e.g., Iowa-Des

Moines Nat’l Bank v. Bennett, 284 U.S. 239, 247 (1931).

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This “can be accomplished by withdrawal of benefits

from the favored class as well as by extension of benefits

to the excluded class.” Heckler v. Matthews, 465 U.S.

728, 740 (1984). But the lodestar is fashioning a remedy

that comports with due process and actually equalizes

treatment. McKesson Corp. v. Div. of Alcoholic Beverages & Tobacco, Dep’t of Bus. Regul. of Fla., 496 U.S. 18,

39-40 (1990). When the harm has occurred in the past and

resulted in the deprivation of property—such as unlawful collection of taxes—this Court has therefore consistently chosen to remedy that violation with retrospective

relief in the form of a refund. See, e.g., id. at 22; Mont.

Nat’l Bank v. Yellowstone Cnty, 276 U.S. 499, 504-05

(1928); Bennett, 284 U.S. at 247.

McKesson exemplifies this Court’s remedial approach when entities have paid money to the government

in violation of the Constitution. In McKesson, the Florida

Supreme Court had held that Florida’s liquor excise tax

violated the Commerce Clause of the U.S. Constitution

but denied the petitioner a tax refund—instead awarding

purely prospective relief in the form of enjoining the

State from giving effect to its unconstitutional tax preferences in the future. 496 U.S. at 25-26. This Court reversed. It held that the State was obligated “to provide

meaningful backward-looking relief to rectify any unconstitutional deprivation.” Id. at 31 (emphasis added). That

could be accomplished in one of two ways: Either the

State could issue a tax refund to the petitioner, or “the

State may assess and collect back taxes from petitioner’s

competitors who benefited from the rate reductions during the contested tax period, calibrating the retroactive

assessment to create in hindsight a nondiscriminatory

scheme.” Id. at 40 (emphasis added). And McKesson is

no anomaly. That decision relied on a series of earlier

cases, including Montana National Bank and Bennett,

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both of which required retrospective relief, and its holding requiring retrospective relief has been repeatedly affirmed in the years since. See, e.g., Reich v. Collins, 513

U.S. 106, 113-14 (1994).

The Government’s only response is to argue that

McKesson is essentially cabined to its facts—that its

core principle is applicable only when a pre-deprivation

hearing is unavailable. Petitioner’s Br. at 31. That attempted distinction has no basis in any of this Court’s

decisions. Tellingly, neither Bennett nor Montana National Bank, upon which McKesson relied, suggested

that the existence of a pre-deprivation remedy would

have anything to do with the remedial analysis. See Bennett, 284 U.S. at 247; Mont. Nat’l Bank, 276 U.S. at 504505. Indeed, McKesson itself characterized Montana

National Bank’s core holding this way: “one forced to

pay a discriminatorily high tax in violation of federal law

is entitled, in addition to prospective relief, to a refund of

the excess tax paid—at least unless the disparity is removed in some other manner.” McKesson, 496 U.S. at 35.

And it characterized the core remedial holding and rationale in Bennett in precisely the same way. Id. at 36.

Neither of these decisions so much as hint at the remedial question turning on the opportunity for pre-deprivation review.

And post-McKesson cases firmly establish that any

remedy for an economic injury cannot be purely prospective, as the Government proposes. For example, in Reich,

this Court held that “meaningful backward-looking relief” was required even where the tax scheme in question

did provide a pre-deprivation remedy procedure. 513

U.S. at 113-14. The point is that the availability of retrospective relief does not turn on the existence of a predeprivation remedy because “a denial … of a recovery of

taxes exacted in violation of the laws or Constitution of

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the United States by compulsion is itself in contravention

of the Fourteenth Amendment.” Reich, 513 U.S. at 109

(quoting Carpenter v. Shaw, 280 U.S. 363, 369 (1930));

McKesson, 496 U.S. at 34 (same).

This Court’s later cases further confirm this remedial

point. In Newsweek, Inc. v. Florida Department of Revenue, this Court soundly rejected the very interpretation

of McKesson that the Government advances here. 522

U.S. 442, 443 (1998). There, Newsweek sought a refund

for unconstitutionally collected taxes, relying on

McKesson. Id. The Florida District Court of Appeal rejected Newsweek’s argument, holding that “McKesson is

distinguishable because that holding was expressly predicated upon the fact that the taxpayer had no meaningful

predeprivation remedy.” Id. This Court reversed, explaining that the Florida court’s decision “failed to consider our decision in Reich.” Id. This Court further explained that a state cannot provide a taxpayer with a

means to dispute taxes post-deprivation, “and then declare, only after the disputed taxes have been paid, that

no such remedy exists.” Id. (quoting Reich, 513 U.S. at

111).

In short, this Court has time and again made clear

that mere declaratory relief is not enough to remedy an

unconstitutional economic deprivation. The Government

has not cited a single case where this Court has approved

mere prospective relief for unconstitutionally collected

taxes or fees on the grounds that a pre-deprivation remedy was available. Nor has the Government cited a single

case supporting a purely prospective remedy for any

economic injury. This Court has only ever sanctioned

meaningful backward-looking relief as a remedy for unconstitutionally collected taxes or fees. And that makes

sense, as “[i]njunctive or declaratory relief is useless to

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a person who has already been injured.” Butz v. Economou, 438 U.S. 478, 504 (1978).

B. Cases where there is no monetary injury cannot support a purely prospective remedy in a

case about the payment of unconstitutional

fees.

The Government would deny businesses across the

country a refund for millions of dollars paid in unconstitutional fees because, according to the Government, “it is

not true that [this Court’s] jurisprudence ordinarily supplies a remedy in civil damages for every legal wrong.”

Petitioner’s Br. at 21 (citing Nixon v. Fitzgerald, 457 U.S.

731, 754 n.37 (1982)). That is neither here nor there. No

one doubts that some constitutional wrongs are remedied

without monetary awards. But the fact that some constitutional violations do not require a monetary remedy does

not mean that this violation should be left without a monetary remedy. Tellingly, the Government cannot cite a

single case denying a retrospective monetary award

where, as here, there is a cause of action and the asserted

wrong involves a past deprivation of property in violation

of the Constitution.

Without any cases involving monetary injuries supporting its position, the Government relies heavily on two

recent cases that imposed purely prospective remedies on

very different facts. First, the Government relies on Sessions v. Morales-Santana, 582 U.S. 47 (2017). There, the

respondent challenged, on equal-protection grounds, the

Immigration and Nationality Act, which provides a framework for obtaining U.S. citizenship for a child born

abroad, when only one parent is a U.S. citizen. Id. at 5152. The Act required the U.S.-citizen parent to have ten

years of physical presence in the United States prior to

the child’s birth, but Congress created an exception for

unwed U.S.-citizen mothers, whose citizenship could be

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transmitted to the child if the mother had lived in the

United States for only one year before the child’s birth.

The remedy that Morales-Santana sought was prospective in nature: U.S. citizenship. But the Court denied that

remedy and instead removed the exception granted to unwed mothers and imposed the general 10-year-presence

rule on all parents. Id. at 72.

Unlike here, however, prospective injunctive relief

made perfect sense in Morales-Santana because the respondent himself was only requesting forward-looking relief. He wanted to become a U.S. citizen. The Court did

not order the remedy that Morales-Santana wanted, but

everyone agreed that the appropriate remedy was prospective in nature—indeed, it had to be given the nature

of the claim, which is not amenable to monetary damages

or a refund. Moreover, the remedy corrected the sexbased unequal treatment moving forward. Here, by contrast, the Government’s preferred remedy would have absolutely no effect on the unequal treatment and would fly

in the face of Respondents’ request for retrospective relief

consistent with the case law set forth in section I.A.

Second, the Government relies on Barr v. American

Association of Political Consultants, Inc., 140 S. Ct. 2335,

2343 (2020) (plurality opinion). But that case also does not

support purely prospective relief that would leave American businesses without a meaningful remedy for the payment of unconstitutional fees. Barr held that a narrow

content-based exception to an otherwise blanket prohibition on “robocalls” for “robocalls that are made to collect

debts owed to or guaranteed by the Federal Government”

violated the First Amendment. Id. The case did not involve monetary payments, monetary damages, or unconstitutional fees, and, as in Morales-Santana, the requested remedy was drastic and largely prospective: invalidating wholesale a federal law that had been on the

books for nearly three decades. The Court accordingly

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chose to remedy the constitutional violation by invalidating the exception for robocalls made to collect debts owed

to the federal government. Id. at 2356.

As in Morales-Santana, prospective relief made sense

in Barr because the plaintiff in that case reasonably

sought only forward-looking relief. The American Association of Political Consultants wanted to be able to make

robocalls for their own political and business purposes

given that others could make robocalls for the purpose of

collecting debts. Id. at 2343. There was no meaningful retrospective remedy to be had because there was no direct

monetary injury (as there is with the payment of unconstitutional fees).

The fact that in some cases involving the violation of

constitutional rights the remedy is purely prospective

does not mean that this Court is free to abandon retrospective relief when such relief is requested, available,

and would equalize past unconstitutional treatment.

There is no basis to depart from the McKesson line of

cases requiring retrospective relief in cases involving the

payment of funds demanded by a state actor in violation

of the Constitution in favor of cases that are so factually

far afield that even the plaintiffs in those cases did not request retrospective remedies.

C. Supposed congressional intent does not dislodge this Court’s precedents outlining permissible remedial solutions.

The Government’s insistence that this Court depart

from its precedent and leave American businesses without a meaningful remedy is largely driven by its argument that this is what Congress wanted. Petitioner’s Br.

at 14-19. But even assuming that Congressional intent

were the dispositive factor here, the Government’s argument is incorrect. In assessing congressional intent,

what counts is “the legislature’s intent, as revealed by the

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statute at hand,” not what Congress has done since passing the statute. Br. in Opposition at 22 (quoting MoralesSantana, 582 U.S. at 73 (emphasis added)). Section

1930(a)(6) reveals no congressional intent regarding BA

districts because it does not mention BA districts. It likewise provides no insight into how to remedy constitutional harm inflicted on debtors in Trustee districts—unless a congressional desire to charge those debtors more

(in violation of the Constitution) is evidence that the Constitution provides those same debtors no remedy for

Congress’s actions. “The simple reality, as [this Court]

assess[es] the legislative developments, is that Congress

has competing interests,” Barr, 140 S. Ct. at 2348 (plurality opinion), and there is no reason to believe that

Congress intended to weigh those competing interests in

a way that would require American businesses to pay

millions of dollars in unconstitutional fees.

Even if Congress had intended that result, Congress

may not establish remedies that run afoul of the Constitution or this Court’s precedents. See id. at 2354 (explaining that “there can be due process, fair notice, or other

independent constitutional barriers to extension of benefits or burdens”). Due process does not allow the Government to collect unconstitutional fees and then block

Respondents from receiving meaningful backward-looking relief, as this Court has stressed repeatedly in the tax

context. See Reich, 513 U.S. at 111; McKesson, 496 U.S.

at 33-34; Carpenter, 280 U.S. at 377-79. It is not enough

for the Government to say that Congress would prefer to

spend less money to solve the problem. See Stern v. Marshall, 564 U.S. 462, 501 (2011) (“[T]he fact that a given

law or procedure is efficient, convenient, and useful in facilitating functions of government, standing alone, will

not save it if it is contrary to the Constitution.” (citation

omitted)). Congress might often prefer to spend less

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money to fix a problem. But mere declaratory relief

“does not cure the mischief” of Congress’s unconstitutional fee structure. See Mont. Nat’l Bank, 276 U.S. at

504. When the Government violates the Constitution,

supposed congressional hesitancy to fund a remedy cannot serve as a get-out-of-jail free card for the Government.

In any event, in emphasizing congressional intent as

the appropriate remedial analysis, the Government ignores the most analogous cases to this dispute—cases involving the past collection of unconstitutional taxes and

fees—wherein congressional intent is not mentioned in

this Court’s remedial analyses. See, e.g., id. at 504-05;

Bennett, 284 U.S. at 247. It is not necessary to ascertain

congressional intent to remedy the deprivation of property, when the simple and obvious solution is to return

what was taken. The Government likewise ignores the

fact that courts generally choose remedies that “create

incentives to raise [constitutional] challenges.” Lucia v.

SEC, 138 S. Ct. 2044, 2055 n.5 (2018) (cleaned up). Here,

the Government’s preferred remedy offers no such incentive whatsoever, as the Government’s so-called remedy does not even alter the status quo moving forward.

II. Retrospectively Raising Fees on Debtors in BA

Districts Would Be Unlawful and Practically Impossible to Achieve.

Not only do this Court’s precedents instruct that

there must be a retrospective remedy, but they instruct

that the appropriate remedy is to level up. That is, the

remedy should equalize treatment between debtors in

Trustee districts and debtors in BA districts by refunding all unconstitutional fees paid by debtors in Trustee

districts.

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The Government disagrees. It argues that, if retrospective relief is required, this Court should level down

by ordering the Judicial Conference to retrospectively

increase fees on debtors in BA districts—fees that have

long been paid—even though some of those debtors may

no longer exist. This is contrary to precedent, unworkable, and would violate due process.

A. This Court has consistently employed level-up

remedies to relieve past economic harm.

Even as this Court has instructed that both level-up

or level-down remedies are generally available to remedy unequal treatment, it has repeatedly emphasized its

strong preference for level-up remedies. Morales-Santana, 582 U.S. at 74 (“Ordinarily, we have reiterated,

‘extension, rather than nullification, is the proper

course.’” (quoting Califano v. Westcott, 433 U.S. 76, 89

(1979))); Barr, 140 S. Ct. at 2354 (plurality opinion)

(same). This is especially true when the dispute involves

a harm imposed in the past in the form of deprivation of

property or the collection of unconstitutional fees or

taxes. See McKesson, 496 U.S. at 22; Bennett, 284 U.S.

at 247; Mont. Nat’l Bank, 276 U.S. at 504.

In that context, this Court has repeatedly held that a

level-down remedy is appropriate—assuming it comports

with other constitutional restrictions—only if the Government has taken the onus to raise the taxes or fees in question to equalize treatment. See Bennett, 284 U.S. at 247

(explaining that “all ground for a claim for refund would

have fallen if the state, promptly upon discovery of the

discrimination, had removed it by collecting the additional

taxes from the favored competitors,” but “it is well settled” that a taxpayer subjected to discriminatory taxation

“cannot be required himself to assume the burden of seeking an increase of the taxes which the others should have

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paid”); Hillsborough Twp. v. Cromwell, 326 U.S. 620, 623

(1946) (same); Allegheny Pittsburgh Coal Co. v. Cnty.

Comm’n of Webster Cnty., 488 U.S. 336, 346 (1989) (“A

taxpayer in this situation may not be remitted by the

State to the remedy of seeking to have the assessments of

the undervalued property raised.”).

Leveling up has also been the Court’s clear preference

when federal financial assistance benefits are at stake—

another context where the unequal treatment results in

economic harm and the appropriate remedy is monetary

in nature. Morales-Santana, 582 U.S. at 74 (noting that

federal financial benefits cases “[i]llustrat[e]” that “[o]rdinarily” leveling up “is the proper course”) (quoting

Westcott, 433 U.S. at 89) (citing Califano v. Goldfarb, 430

U.S. 199, 202-04, 213-17 (1977) (plurality opinion) (survivors’ benefits); Jimenez v. Weinberger, 417 U.S. 628, 63031 & n.2, 637-38 (1974) (disability benefits); Dep’t of Agric.

v. Moreno, 413 U.S. 528, 529-30, 538 (1973) (food stamps);

and Frontiero v. Richardson, 411 U.S. 677, 678-79 & n.2,

691 & n.25 (1973) (plurality opinion) (military spousal benefits))). The Government has not offered a single case

where this Court has ordered a level-down remedy for a

monetary injury that occurred in the past.2

The Government’s cases are simply inapposite. In Morales-Santana, the Court stressed that “[a]lthough the

preferred rule in the typical case is to extend favorable

There have been several cases involving monetary harm in

which this Court has declined to choose a remedy, as this Court typically defers to state courts on remedial questions that implicate

state law. Levin v. Com. Energy, Inc. 560 U.S. 413, 427 (2010) (collecting cases). This may be true where this Court reviews state

court judgments on the constitutionality of state tax measures. See

id. But the case at hand does not implicate any state law or interest.

Moreover, in each of these cases, a level-down remedy was theoretically viable. Not so here.

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treatment, this is hardly the typical case.” Id. at 77 (emphasis added) (citation omitted). Morales-Santana was

not “typical,” because leveling up—the extension of favorable treatment—would have turned “special treatment”

into “the general rule, no longer an exception.” Id. In

Barr, this Court reiterated its “preference for extension

rather than nullification,” but the Court simply severed

the government-debt exception because it was “a relatively narrow exception to the broad robocall restriction.”

Barr, 140 S. Ct. at 2354-55 (plurality opinion). That narrow exception was a recently enacted amendment to a

statute that had been on the books for decades.

Here, in contrast, there is no general rule and no exception. No class receives the benefit of an exemption

from general rules that others must follow. The Act in

question—the 2017 Amendment of Section 1930(a)(6)—

did not confer any benefits at all. The Act raised fees on

chapter 11 debtors in the Trustee program and did nothing to the BA program. Section 1930(a)(6) creates no exception—only a general rule. It is absurd to speak of a

statute creating a “benefit” for a favored class when the

statute is utterly silent as to that class.

Here, it is “not material” that “the [Government]

may still have power to equalize the treatment” by ordering that debtors in BA districts to pay higher fees,

because the Government has not done so. Bennett, 284

U.S. at 247.3 The Respondents’ “rights were violated,

and the cause[] of action arose,” when the Government

In Welsh v. United States, Justice Harlan noted in his concurrence that the preference for leveling up in Bennett was “[b]ased on

the impracticality” of the only level-down remedy available. 398 U.S.

333, 362 n.15 (1970) (Harlan, J., concurring). This concern is far

more pronounced in the context of bankruptcy fees, as the bankrupt

entity may no longer exist, and even if it does, it may no longer be

under the supervision of the bankruptcy court.

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collected substantially lower fees from debtors in BA

districts. See id. Because the debtor “cannot be required himself to assume the burden of seeking an increase of the [fees] which the others should have paid,”

Respondents are entitled to a refund. See id.

B. Collecting fees would cause serious harm to

debtors and creditors.

Leveling down by ordering the Judicial Conference to

retrospectively raise fees that have already been paid

would sow chaos in bankruptcy courts—causing enormous harm to debtors and creditors. It would also entangle the Government in years of protracted and costly litigation. It would require reopening previously closed

Chapter 11 cases (for debtors who are no longer under the

supervision of the bankruptcy court) and imposing new,

substantially increased fees on former debtors’ estates.

But some, or possibly many, of those bankruptcies may

have failed, their cases being converted to Chapter 7 or

dismissed altogether. And even for the cases that remain

open, collecting fee increases of over 800% would cause

serious harm to businesses, their employees, and the communities that depend on them.

These debtors and creditors would have long devised

a reorganization plan that would have taken into account

fees owed to the Administrator. And many others besides

debtors and creditors—including lawyers, financial advisors, restructuring consultants, and investment bankers—would have relied on the known Administrator’s

fees, as those fees would factor into the feasibility of the

reorganization plan. Retrospectively recharging fees (increased over 800%) that have already been paid could be

catastrophic for these bankruptcies. It would potentially

derail Chapter 11 reorganizations into Chapter 7 liquidations, harming creditors and debtors, as well as anyone

who depends on the continued existence of the bankrupt

16

entity. This administrative quagmire would also instigate

endless litigation.4

The Government suggests that a level-up remedy

would somehow be even more difficult to achieve, as affected debtors in Trustee districts might likewise no

longer exist. But this is a red herring. If this Court orders

the level-up remedy of a refund, the Government will not

be tasked with identifying and tracking down all similarly

situated debtors in Trustee districts to hand out refunds.

Rather, any debtors still in existence and entitled to relief

would be able to move for relief themselves. Unlike with a

level-down remedy, with a level-up remedy there is a

built-in incentive for affected businesses to come forward

and be made whole. This incentive necessarily makes the

remedy orderly and negates any need to compel the Government or anyone else to “assume the burden of seeking

an increase of the [fees] which the others should have

paid.” Bennett, 284 U.S. at 247.

In sum, the Government’s proposed remedies are out

of step with this Court’s precedents and terrible for debtors and creditors alike. The Government’s first “remedy”

is for this Court to declare what Congress has already decreed—that is, to do nothing whatsoever. The Government’s second choice is for this Court to sow confusion and

disorder into bankruptcy proceedings. Neither course is

For example, several debtors mounted due process challenges

to the 2017 Amendment on retroactivity grounds, as the Amendment

imposed significant fee increases even after debtors’ plans were in

place. None of those challenges prevailed. In re John Q. Hammons

Fall 2006, 15 F.4th 1011, 1020 (10th Cir. 2021), vacated, 142 S. Ct.

2810; In re Circuit City Stores, Inc., 996 F.3d 156, 169 (4th Cir. 2021),

rev’d and remanded, 596 U.S. 464; In re Buffets LLC., 979 F.3d 366,

375 (5th Cir. 2020), abrogated by Siegel, 596 U.S. at 480. But here,

challengers would have much stronger due process arguments, as the

retroactively raised fees would have already been paid.

4

17

appropriate. The only sensible solution is to provide a real

remedy. Respectfully, the Government owes Respondents a refund.

CONCLUSION

The judgment of the Court of Appeals should be affirmed.

Respectfully submitted.

Jennifer B. Dickey

Jonathan D. Urick

U.S. C HAMBER

L ITIGATION C ENTER

1615 H Street, NW

Washington, DC

20062

Steven P. Lehotsky

Counsel of Record

LEHOTSKY KELLER

COHN LLP

200 Massachusetts Ave., NW

Washington, DC 20001

(512) 693-8350

steve@lkcfirm.com

Andrew B. Davis

Michael C. Cotton

LEHOTSKY KELLER

COHN LLP

408 W. 11th Street, 5th Floor

Austin, TX 78701

DECEMBER 2023