United States Trustee v. John Q. Hammons Fall 2006, LLC

The United States Supreme Court ruled on June 14, 2024, that debtors who paid higher quarterly fees to the United States Trustee before the Court's 2022 decision in Siegel v. Fitzgerald are not entitled to refunds. John Q. Hammons Fall 2006, LLC, a Kansas hotel debtor, sought recovery of fees paid under a fee schedule later held unconstitutional because it differed between U.S. Trustee districts and bankruptcy administrator districts. The Tenth Circuit had ordered refunds, but the Supreme Court reversed 6-3, holding that the proper remedy was prospective only. Writing for the majority, Justice Brett Kavanaugh reasoned that Congress imposed fees under a then-valid statute and retroactive refunds would cause significant fiscal disruption. Justice Neil Gorsuch dissented. The decision limits retroactive monetary relief for constitutional violations in bankruptcy fee collection.

The Supreme Court reversed the Tenth Circuit and held that debtors are not entitled to refunds of fees paid before the Siegel decision; prospective relief only.

Whether the proper remedy for the unconstitutional disparity in bankruptcy quarterly fees includes retroactive refunds to debtors who overpaid before Siegel v. Fitzgerald.

The ruling curtails retroactive refund claims across bankruptcy cases, preserves the financial stability of the United States Trustee System, and clarifies that a declaration of unconstitutionality does not automatically require monetary restitution for past payments.