Court Opinion

ID: 6347224
Source: CourtListenerOpinion
Date Created: 2022-06-06 15:00:53.15076+00
Date Added: 2024-06-11T13:26:02.297141
License: Public Domain

(Slip Opinion)              OCTOBER TERM, 2021                                       1

                                       Syllabus

         NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
       being done in connection with this case, at the time the opinion is issued.
       The syllabus constitutes no part of the opinion of the Court but has been
       prepared by the Reporter of Decisions for the convenience of the reader.
       See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

                                       Syllabus

  SIEGEL, TRUSTEE OF THE CIRCUIT CITY STORES,
 INC. LIQUIDATING TRUST v. FITZGERALD, ACTING
      UNITED STATES TRUSTEE FOR REGION 4

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
                 THE FOURTH CIRCUIT

       No. 21–441.      Argued April 18, 2022—Decided June 6, 2022
Congress created the United States Trustee Program (Trustee Program)
  as a mechanism to transfer administrative functions previously han-
  dled by bankruptcy judges to U. S. Trustees, a component of the De-
  partment of Justice. Congress permitted the six judicial districts in
  North Carolina and Alabama to opt out of the Trustee Program. In
  these six districts, bankruptcy courts continue to appoint bankruptcy
  administrators under a system called the Administrator Program. The
  Trustee Program and the Administrator Program handle the same
  core administrative functions, but have different funding sources.
  Congress requires that the Trustee Program be funded in its entirety
  by user fees paid to the United States Trustee System Fund (UST
  Fund), largely paid by debtors who file cases under Chapter 11 of the
  Bankruptcy Code. 28 U. S. C. §589a(b)(5). Those debtors pay a fee in
  each quarter of the year that their case remains pending at a rate set
  by Congress and determined by the amount of disbursements the
  debtor’s estate made that quarter. See §1930(a). In contrast, the Ad-
  ministrator Program is funded by the Judiciary’s general budget.
  While initially Congress did not require Administrator Program dis-
  trict debtors to pay user fees at all, Congress permitted the Judicial
  Conference of the United States to require Chapter 11 debtors in Ad-
  ministrator Program districts to pay fees equal to those imposed in
  Trustee Program districts. See §1930(a)(7). Pursuant to a 2001 stand-
  ing order of the Judicial Conference, from 2001 to 2017 all districts
  nationwide charged similarly situated debtors uniform fees.
     In 2017, Congress enacted a temporary increase in the fee rates ap-
  plicable to large Chapter 11 cases to address a shortfall in the UST
2                       SIEGEL v. FITZGERALD

                                 Syllabus

 Fund. See 131 Stat. 1229 (2017 Act). The 2017 Act provided that the
 fee raise would become effective in the first quarter of 2018, would last
 only through 2022, and would be applicable to currently pending and
 newly filed cases. The Judicial Conference adopted the 2017 fee in-
 crease for the six Administrator Program districts, effective October 1,
 2018, and applicable only to newly filed cases.
    In 2008, Circuit City Stores, Inc., filed for Chapter 11 bankruptcy in
 the Eastern District of Virginia, a Trustee Program district. In 2010,
 the Bankruptcy Court confirmed a joint-liquidation plan, overseen by
 a trustee (petitioner here), to collect, administer, distribute, and liqui-
 date all of Circuit City’s assets. The liquidation plan required peti-
 tioner to pay quarterly fees to the U. S. Trustee while the Chapter 11
 case was pending. Circuit City’s bankruptcy was still pending when
 Congress increased the fees for Chapter 11 debtors in Trustee Program
 districts through the 2017 Act. Across the first three quarters of 2018,
 petitioner paid $632,542 in total fees, significantly more than the
 $56,400 petitioner would have paid absent the fee increase in the 2017
 Act. Petitioner filed for relief against the Acting U. S. Trustee for Re-
 gion 4 (respondent here) contending that the fee increase was nonuni-
 form across Trustee Program districts and Administrator Program dis-
 tricts, in violation of the Constitution’s Bankruptcy Clause. The
 Bankruptcy Court agreed, and directed that for the fees due from Jan-
 uary 1, 2018, onward, the Circuit City trustee pay the rate in effect
 prior to the 2017 Act. The Bankruptcy Court reserved the question
 whether the trustee could recover any “overpayments” made under the
 2017 Act. The Fourth Circuit reversed, holding that the fee increase
 did not violate the uniformity requirement of the Bankruptcy Clause
 because the increase applied only to debtors in Trustee Program dis-
 tricts in order to bolster the dwindling UST Fund, which funded the
 Trustee Program alone.
Held: Congress’ enactment of a significant fee increase that exempted
 debtors in two States violated the uniformity requirement of the Bank-
 ruptcy Clause. Pp. 7–15.
    (a) The Bankruptcy Clause’s uniformity requirement—which em-
 powers Congress to establish “uniform Laws on the subject of Bank-
 ruptcies throughout the United States,” U. S. Const., Art. I, §8, cl. 4—
 applies to the 2017 Act. Respondent contends that the 2017 Act was
 not a law “on the subject of Bankruptcies” to which the uniformity re-
 quirement applies, but instead a law enacted pursuant to the Neces-
 sary and Proper Clause, U. S. Const., Art. I, §8, cl. 18, meant to help
 administer substantive bankruptcy law. Nothing in the language of
 the Bankruptcy Clause suggests a distinction between substantive and
 administrative laws, however, and this Court has repeatedly empha-
 sized that the Bankruptcy Clause’s language, embracing “laws on the
                   Cite as: 596 U. S. ____ (2022)                     3

                              Syllabus

subject of Bankruptcies,” is broad. This Court has never distinguished
between substantive and administrative bankruptcy laws or suggested
that the uniformity requirement would not apply to both. Further, the
Court has never suggested that all administrative bankruptcy laws are
enacted pursuant to the Necessary and Proper Clause, nor that the
Necessary and Proper Clause permits Congress to circumvent the lim-
itations set by the Bankruptcy Clause. To the contrary, Congress can-
not evade the “affirmative limitation” of the uniformity requirement
by enacting legislation pursuant to other grants of authority. See Rail-
way Labor Executives’ Assn. v. Gibbons, 455 U. S. 457, 468–469. In
any event, the 2017 fee provision fits comfortably under the scope of
the Bankruptcy Clause: The provision amended a statute titled “Bank-
ruptcy fees,” §1930, and the only “subject” of the 2017 Act is bank-
ruptcy. Moreover, the 2017 Act does affect the “substance of debtor-
creditor relations” because increasing mandatory fees paid out of the
debtor’s estate decreases the funds available for payment to creditors.
Respondent points to purported historic analogues to argue that the
uniformity requirement does not apply where Congress sets different
fee structures with different funding mechanisms for debtors in differ-
ent bankruptcy districts. But the fee increase at issue here is materi-
ally different from the examples cited by respondent. Unlike respond-
ent’s examples, the 2017 Act does not confer discretion on bankruptcy
districts to set regional policies based on regional needs. Rather, Con-
gress exempted debtors in only 2 States from a fee increase that ap-
plied to debtors in 48 States, without identifying any material differ-
ence between debtors across those States. Pp. 7–10.
   (b) The 2017 Act violated the uniformity requirement of the Bank-
ruptcy Clause. The Bankruptcy Clause confers broad authority on
Congress with the limitation that the laws enacted be “uniform.” The
Court’s three decisions addressing the uniformity requirement to-
gether stand for the proposition that the Bankruptcy Clause does not
permit arbitrary geographically disparate treatment of debtors. In
Moyses v. Hanover Nat’l Bank, 186 U. S. 181, the Court rejected a chal-
lenge to the constitutionality of the Bankruptcy Act of 1898, which per-
mitted individual debtor exemptions under different state laws, ex-
plaining that the “general operation of the law is uniform although it
may result in certain particulars differently in different States.” Id.,
at 190. In the Regional Rail Reorganization Act Cases, 419 U. S. 102,
the Court affirmed the constitutionality of legislation which applied
only to rail carriers operating within a defined region of the country,
noting the “flexibility inherent” in the Bankruptcy Clause, id., at 158,
permits Congress to enact geographically limited bankruptcy laws con-
sistent with the uniformity requirement in response to a geograph-
ically limited problem. In Gibbons, 455 U. S. 457, the Court struck
4                        SIEGEL v. FITZGERALD

                                  Syllabus

    down legislation in which Congress altered the priority of claimants in
    a single railroad’s bankruptcy proceedings, holding that “[t]o survive
    scrutiny under the Bankruptcy Clause, a law must at least apply uni-
    formly to a defined class of debtors.” Id., at 473.
       Here, all agree that the 2017 Act’s fee increase was not geograph-
    ically uniform because the fee increase applied differently to Chapter
    11 debtors in different regions. That geographical disparity meant
    that petitioner paid over $500,000 more in fees compared to an identi-
    cal debtor in North Carolina or Alabama. While respondent contends
    that such disparities were a permissible effort to solve the budgetary
    shortfall in the UST Fund, an arguably geographical problem, that
    shortfall stemmed not from an external and geographically isolated
    need, but from Congress’ creation of a dual bankruptcy system which
    allowed certain districts to opt into a system more favorable for debt-
    ors. The Clause does not permit Congress to treat identical debtors
    differently based on artificial distinctions Congress itself created.
    Pp. 10–14.
       (c) The Court remands for the Fourth Circuit to consider in the first
    instance the proper remedy. Pp. 14–15.
996 F. 3d 156, reversed and remanded.

    SOTOMAYOR, J., delivered the opinion for a unanimous Court.
                        Cite as: 596 U. S. ____ (2022)                                 1

                              Opinion of the Court

     NOTICE: This opinion is subject to formal revision before publication in the
     preliminary print of the United States Reports. Readers are requested to
     notify the Reporter of Decisions, Supreme Court of the United States, Wash-
     ington, D. C. 20543, of any typographical or other formal errors, in order that
     corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES
                                    _________________

                                     No. 21–441
                                    _________________

ALFRED H. SIEGEL, TRUSTEE OF THE CIRCUIT CITY
STORES, INC. LIQUIDATING TRUST, PETITIONER v.
    JOHN P. FITZGERALD, III, ACTING UNITED
        STATES TRUSTEE FOR REGION 4
 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
           APPEALS FOR THE FOURTH CIRCUIT
                                   [June 6, 2022]

   JUSTICE SOTOMAYOR delivered the opinion of the Court.
   The Bankruptcy Clause empowers Congress to establish
“uniform Laws on the subject of Bankruptcies throughout
the United States.” U. S. Const., Art. I, §8, cl. 4. The
Clause’s requirement that bankruptcy laws be “uniform” is
not a straitjacket: Congress retains flexibility to craft legis-
lation that responds to different regional circumstances
that arise in the bankruptcy system. Nor, however, is this
uniformity requirement toothless. The question in this case
is whether Congress’ enactment of a significant fee increase
that exempted debtors in two States violated the uniformity
requirement. Here, it did.
                              I
                             A
  Bankruptcy cases involve both traditional judicial re-
sponsibilities and extensive administrative ones. Until
1978, bankruptcy judges handled both. This meant that, in
addition to their traditional judicial function of ruling on
disputed matters in adversarial proceedings, bankruptcy
2                  SIEGEL v. FITZGERALD

                     Opinion of the Court

judges dealt with an array of administrative tasks, such as
appointing private trustees where appropriate; organizing
creditors’ committees; supervising the filing of required re-
ports, schedules, and taxes; and monitoring cases for signs
of abuse and fraud. See H. R. Rep. No. 99–764, p. 17 (1986).
   Concerned that these dual roles were overloading bank-
ruptcy judges and creating an appearance of bias, particu-
larly because judges were responsible for supervising trus-
tees that they themselves had appointed, Congress in 1978
piloted the United States Trustee Program (Trustee Pro-
gram) in 18 of the 94 federal judicial districts. See id.,
at 17–18; Bankruptcy Reform Act of 1978, 92 Stat. 2549. To
“rende[r] the separation of administrative and judicial func-
tions complete,” the pilot program transferred the adminis-
trative functions previously handled by the bankruptcy
courts to newly created U. S. Trustees, housed within the
Department of Justice rather than the Administrative Of-
fice of the U. S. Courts. H. R. Rep. No. 95–595, p. 115
(1977).
   In 1986, Congress sought to make the pilot Trustee Pro-
gram permanent and to expand it nationwide, but met re-
sistance from stakeholders in North Carolina and Alabama.
See The United States Trustee System: Hearing on S. 1961
before the Subcommittee on Courts of the Senate Commit-
tee on the Judiciary, 99th Cong., 2d Sess., 129 (1986). As a
result, Congress opted to expand mandatorily the Trustee
Program to all federal judicial districts except for the six
judicial districts in North Carolina and Alabama. Congress
permitted only those six districts to continue judicial ap-
pointment of bankruptcy administrators, referring to that
system as the Administrator Program.              §§111–115,
302(d)(3), 100 Stat. 3090–3095, 3121–3123. The Adminis-
trator Program was scheduled to phase out in 1992, but
Congress extended it by 10 years. §317(a), 104 Stat. 5115.
At the end of those 10 years, however, Congress did not
                  Cite as: 596 U. S. ____ (2022)            3

                      Opinion of the Court

phase out the Administrator Program. Instead, it elimi-
nated the sunset period and permanently exempted the six
districts from the requirement to transition to the Trustee
Program, while providing that each district could individu-
ally elect to do so. §501, 114 Stat. 2421–2422 (2000 Act);
§302(d)(3), 100 Stat. 3121–3123. Each of the six districts
continues to participate in the Administrator Program.
   The Trustee Program and the Administrator Program
handle the same core administrative functions, but have
different funding sources. Congress requires that the Trus-
tee Program be funded in its entirety by user fees paid to
the United States Trustee System Fund (UST Fund), the
bulk of which are paid by debtors who file cases under
Chapter 11 of the Bankruptcy Code.                28 U. S. C.
§589a(b)(5). Those debtors pay a fee in each quarter of the
year that their case remains pending at a rate set by Con-
gress. The fee varies according to the amount of funds paid
out (“disbursed”) from the bankruptcy estate to creditors,
suppliers, and other parties during that quarter. See
§1930(a).
   In contrast, Congress does not require the Administrator
Program to fund itself. Instead, the Administrator Pro-
gram is funded by the Judiciary’s general budget. In re Cir-
cuit City Stores, Inc., 996 F. 3d 156, 160 (CA4 2021). Ini-
tially, Congress did not require Administrator Program
district debtors to pay user fees at all. After the Ninth Cir-
cuit held that system unconstitutional, see St. Angelo v.
Victoria Farms, Inc., 38 F. 3d 1525, 1532–1533 (1994),
amended, 46 F. 3d 969 (1995), Congress provided that “ ‘the
Judicial Conference of the United States may require the
debtor in a case under chapter 11 [filed in an Administrator
Program district] to pay fees equal to those imposed’ ” in
Trustee Program districts, 2000 Act §105, 114 Stat. 2412
(enacting 28 U. S. C. §1930(a)(7)). Congress directed that
any such fees be deposited into a fund that offsets appropri-
4                  SIEGEL v. FITZGERALD

                      Opinion of the Court

ations to the Judicial Branch. Ibid. The Judicial Confer-
ence adopted a standing order in 2001 directing Adminis-
trator Program districts to charge fees “in the amounts
specified in 28 U. S. C. §1930, as those amounts may be
amended from time to time.” Report of the Proceedings of
the Judicial Conference of the United States 46 (Sept./Oct.
2001). Under this standing order, for the next 17 years, the
Judicial Conference matched all Trustee Program fee in-
creases with equivalent Administrator Program fee in-
creases, meaning that all districts nationwide charged sim-
ilarly situated debtors uniform fees.
   In 2017, concerned with a shortfall in the UST Fund,
Congress enacted a temporary, but significant, increase in
the fee rates applicable to large Chapter 11 cases. See Pub.
L. 115–72, Div. B, 131 Stat. 1229 (2017 Act). The increase
was set to take effect only if the UST Fund balance dropped
below $200 million as of September 30 of the most recent
fiscal year. If that condition was met, the increase applied
on a quarterly basis to any debtors with a disbursement of
$1 million or more during that quarter, regardless of
whether their case was newly filed or already pending when
the increase took effect. For those debtors, the maximum
fee was increased from $30,000 a quarter to $250,000 a
quarter. §1004(a), id., at 1232. The statute provided that
the fee raise would become effective in the first quarter of
2018 and would last only through 2022.
   Despite the Judicial Conference’s standing order, and un-
like with previous fee increases, the six districts in the two
States participating in the Administrator Program did not
immediately adopt the 2017 fee increase. Only in Septem-
ber 2018 did the Judicial Conference order Administrator
Program districts to implement the amended fee schedule.
Even then, however, two key differences remained between
the fee increase faced by debtors in Trustee Program dis-
tricts as opposed to those faced by debtors in Administrator
Program districts. First, the fee increase took effect for the
                  Cite as: 596 U. S. ____ (2022)             5

                      Opinion of the Court

six Administrator Program districts as of October 1, 2018,
while the increase took effect for the Trustee Program dis-
tricts as of the first quarter of 2018. Second, in Adminis-
trator Program districts, the fee increase applied only to
newly filed cases, while in Trustee Program districts, the
increase applied to all pending cases.
   In 2021, Congress amended the statute governing parity
of fees between Trustee Program and Administrator Pro-
gram districts, §1930(a)(7), to replace the word “may” with
“shall.” See Pub. L. 116–325, 134 Stat. 5088. As a result,
the statute now provides that the Judicial Conference “shall
require” imposition of fees in Administrator Program dis-
tricts that are equal to those imposed in Trustee Program
districts.   §1930(a)(7). This change “confirm[ed] the
longstanding intention of Congress that quarterly fee re-
quirements remain consistent across all Federal judicial
districts.” Id., at 5086.
                               B
   In 2008, Circuit City Stores, Inc., filed for Chapter 11
bankruptcy in the Eastern District of Virginia, a Trustee
Program district. In 2010, the Bankruptcy Court confirmed
a joint-liquidation plan, overseen by a trustee (petitioner
here), to collect, administer, distribute, and liquidate all of
Circuit City’s assets. The liquidation plan required peti-
tioner to “ ‘pay quarterly fees to the U. S. Trustee until the
Chapter 11 Cases are closed or converted.’ ” In re Circuit
City Stores, 606 B. R. 260, 263 (2019). In 2010, when the
plan was confirmed, the maximum quarterly fee was
$30,000.
   Circuit City’s bankruptcy was still pending when Con-
gress raised the fees for Chapter 11 debtors in Trustee Pro-
gram districts through the 2017 Act. Across the first three
quarters after the fee increase took effect, petitioner paid
$632,542 in total fees. Id., at 267, n. 20. Had Congress not
increased fees, petitioner would have paid $56,400 over that
6                   SIEGEL v. FITZGERALD

                      Opinion of the Court

same period. Ibid.
   Petitioner filed for relief against the Acting U. S. Trustee
for Region 4 (respondent here, represented by the Solicitor
General) in the Bankruptcy Court of the Eastern District of
Virginia. Petitioner objected that the fee increase under the
2017 Act was nonuniform across Trustee Program districts
and Administrator Program districts, in violation of the
Constitution’s Bankruptcy Clause. The Bankruptcy Court
agreed, and directed that for the fees due from January 1,
2018, onward, the trustee pay the rate in effect prior to the
2017 Act. Id., at 270–271. The court reserved the question
whether the trustee could recover any “overpayments”
made under the 2017 Act. Ibid.
   A divided panel of the Fourth Circuit reversed. The court
agreed that the uniformity requirement of the Bankruptcy
Clause applied to the 2017 Act, but it interpreted the
Clause as forbidding “only ‘arbitrary’ geographic differ-
ences.” 996 F. 3d, at 166. In the court’s view, the fee in-
crease permissibly applied only to Trustee Program dis-
tricts because the UST Fund, which funded that program
alone, was dwindling. Therefore, the court reasoned, Con-
gress’ effort to remedy that problem was not arbitrary.
Judge Quattlebaum dissented in relevant part, interpreting
the Bankruptcy Clause to preclude disparate treatment of
bankruptcy districts unless the treatment was “aimed at
addressing issues that are geographical in nature.” Id., at
175. In Judge Quattlebaum’s view, the difference between
Trustee Program districts and Administrator Program dis-
tricts was arbitrary, as there was nothing “geographically
distinct about Alabama or North Carolina that justified a
different approach in those states.” Ibid.
   This Court granted certiorari, 595 U. S. ___ (2022), to re-
solve a split that had developed in the lower courts over the
constitutionality of the 2017 Act.1
——————
 1 Compare In re John Q. Hammons Fall 2006, LLC, 15 F. 4th 1011
                     Cite as: 596 U. S. ____ (2022)                     7

                          Opinion of the Court

                               II
                                A
   The Bankruptcy Clause empowers Congress to establish
“uniform Laws on the subject of Bankruptcies throughout
the United States.” U. S. Const., Art. I, §8, cl. 4. The first
question before the Court is whether the 2017 Act is subject
to the Bankruptcy Clause’s uniformity requirement at all.
   Respondent contends that the 2017 Act was not a law “on
the subject of Bankruptcies” to which the uniformity re-
quirement applies, but, rather, a law meant to help admin-
ister substantive bankruptcy law. Respondent interprets
the Bankruptcy Clause as extending only to laws that “alter
the substance of debtor-creditor relations,” such as laws
that set priorities for claims or exempt property from an es-
tate. Brief for Respondent 25. In respondent’s view, the
Necessary and Proper Clause, U. S. Const., Art. I, §8, cl. 18,
supplies the authority for Congress to pass a law auxiliary
to a substantive bankruptcy law.
   Nothing in the language of the Bankruptcy Clause itself,
however, suggests a distinction between substantive and
administrative laws. This Court has repeatedly empha-
sized that the Bankruptcy Clause’s language, embracing
“laws on the subject of Bankruptcies,” is broad. For exam-
ple, the Court has recognized that the “subject of bankrupt-
cies is incapable of final definition,” and includes “nothing
less than ‘the subject of the relations between [a] debtor and
his creditors.’ ” Wright v. Union Central Life Ins. Co., 304
U. S. 502, 513–514 (1938). Without purporting to define the
full scope of the Clause, the Court has interpreted the
Clause to have “granted plenary power to Congress over the

——————
(CA10 2021) (2017 Act is unconstitutional); In re Clinton Nurseries, Inc.,
998 F. 3d 56 (CA2 2021) (same), with In re Mosaic Mgmt. Group, Inc., 22
F. 4th 1291 (CA11 2022) (2017 Act is constitutional); In re Circuit City
Stores, Inc., 996 F. 3d 156 (CA4 2021) (same); In re Buffets, LLC, 979
F. 3d 366 (CA5 2020) (same).
8                  SIEGEL v. FITZGERALD

                      Opinion of the Court

whole subject of ‘bankruptcies,’ ” and observed that the “lan-
guage used” did not “limit” the scope of Congress’ authority.
Hanover Nat. Bank v. Moyses, 186 U. S. 181, 187 (1902).
   Nor has this Court ever distinguished between substan-
tive and administrative bankruptcy laws or suggested that
the uniformity requirement would not apply to both. Re-
spondent argues that each of this Court’s prior cases on the
uniformity requirement has addressed what he terms “sub-
stantive bankruptcy laws,” Brief for Respondent 24, but
these cases do not establish that the uniformity require-
ment only applies to such “substantive” laws. This Court
has stated that “the powers of the general grant” of the Nec-
essary and Proper Clause must be added to the Bankruptcy
Clause’s “specific grant” of power to Congress to legislate on
the subject of bankruptcies. Wright, 304 U. S., at 513. The
Court has never suggested, however, that all “administra-
tive” bankruptcy laws, Brief for Respondent 13, are enacted
pursuant to the Necessary and Proper Clause, nor that the
Necessary and Proper Clause permits Congress to circum-
vent the limitations set by the Bankruptcy Clause. To the
contrary, the Court has held that Congress cannot evade
the “affirmative limitation” of the uniformity requirement
by enacting legislation pursuant to other grants of author-
ity. Railway Labor Executives’ Assn. v. Gibbons, 455 U. S.
457, 468–469 (1982) (rejecting the contention that Congress
could “enact nonuniform bankruptcy laws pursuant to the
Commerce Clause,” because doing so “would eradicate from
the Constitution a limitation on the power of Congress to
enact bankruptcy laws”).
   Not surprisingly, all courts to have considered this ques-
tion to date (even those that have found the 2017 Act con-
stitutional) have accepted that the statute is subject to the
Bankruptcy Clause’s uniformity requirement. See In re
Clinton Nurseries, Inc., 998 F. 3d 56, 64, and n. 6 (CA2
2021) (collecting cases). The 2017 fee provision amended a
statute titled “Bankruptcy fees.” 28 U. S. C. §1930. The
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                      Opinion of the Court

provision’s effect is to set fees that must be paid by a bank-
ruptcy trustee from the debtor’s estate in a bankruptcy pro-
ceeding. The only “subject” of the 2017 Act is bankruptcy.
Moreover, and importantly, the 2017 Act does affect the
“substance of debtor-creditor relations”: Increasing manda-
tory fees paid out of the debtor’s estate decreases the funds
available for payment to creditors. As a result, the obliga-
tions between creditors and debtors are changed.
   Respondent also argues that historic and modern con-
gressional practice support the notion that bankruptcy fees
are wholly exempt from the uniformity requirement. This
argument glosses over the nature of the practices at issue.
The historic examples respondent cites concern uniform
federal laws allowing for local variation by delegating dis-
cretion to districts to establish their own procedures for cer-
tain bankruptcy matters, including fees, in view of local
needs and conditions. See An Act to Establish an Uniform
System of Bankruptcy Throughout the United States, §47,
2 Stat. 33 (1800) (providing “[t]hat the district judges, in
each district respectively, shall fix a rate of allowance to be
made to the commissioners of bankruptcy”); An Act to Es-
tablish a Uniform System of Bankruptcy Throughout the
United States, §6, 5 Stat. 446 (1841) (establishing that dis-
trict courts may “prescribe a tariff or table of fees and
charges”). Similarly, the contemporary laws respondent
cites are uniform laws allowing for local determination of
governing rules. See, e.g., 28 U. S. C. §§158(b)(1), (6)
(providing that district courts may, but need not, partici-
pate in the bankruptcy appellate panel for its circuit if the
circuit has created one). As discussed below, see infra, at
10–12, the uniformity requirement does not demand that
Congress forbid or eliminate such local variation or choice.
   The fee increase at issue here is materially different from
these laws. It does not confer discretion on bankruptcy dis-
tricts to set regional policies based on regional needs. Ra-
ther, Congress exempted debtors in only 2 States from a fee
10                 SIEGEL v. FITZGERALD

                      Opinion of the Court

increase that applied to debtors in 48 States, without iden-
tifying any material difference between debtors across
those States. The only difference between the States in
which the fee increase applied and the States in which it
was not required was the desire of those two States not to
participate in the Trustee Program. The historical record
therefore provides no support for respondent’s argument
that the uniformity requirement does not apply where Con-
gress sets different fee structures with different funding
mechanisms for debtors in different bankruptcy districts.
                           B
  Having determined that the 2017 Act falls within the am-
bit of the Bankruptcy Clause, the Court must now decide
whether the Act was a permissible exercise of that Clause.
                               1
   Although the Bankruptcy Clause confers broad authority
on Congress, the Clause also imposes a limitation on that
authority: the requirement that the laws enacted be “uni-
form.” The Court has addressed the uniformity require-
ment on three occasions. Taken together, they stand for the
proposition that the Bankruptcy Clause offers Congress
flexibility, but does not permit arbitrary geographically dis-
parate treatment of debtors.
   The Court first addressed the uniformity requirement in
rejecting a challenge to the constitutionality of the Bank-
ruptcy Act of 1898, which permitted individual debtor ex-
emptions, including homestead and wage exemptions under
state laws. Moyses, 186 U. S. 181. The Court in Moyses
held that the Bankruptcy Clause’s uniformity principle
does not require Congress to eliminate existing state ex-
emptions in bankruptcy laws. Id., at 188. The Court ex-
plained that the “general operation of the law is uniform
although it may result in certain particulars differently in
different States.” Id., at 190.
                  Cite as: 596 U. S. ____ (2022)           11

                      Opinion of the Court

  Next, in the Regional Rail Reorganization Act Cases, 419
U. S. 102 (1974), the Court affirmed the constitutionality of
the Regional Rail Reorganization Act of 1973, which applied
only to rail carriers operating within a defined region of the
country, where “[n]o railroad reorganization . . . was pend-
ing outside that defined region.” Id., at 159–160. The Court
described the “flexibility inherent” in the Bankruptcy
Clause, id., at 158, which “does not deny Congress power to
take into account differences that exist between different
parts of the country, and to fashion legislation to resolve
geographically isolated problems,” id., at 159. Because the
Regional Rail Reorganization Act “operate[d] uniformly
upon all bankrupt railroads then operating in the United
States,” it was consistent with the Bankruptcy Act’s uni-
formity principle. Id., at 160. Put simply, Congress may
enact geographically limited bankruptcy laws consistent
with the uniformity requirement if it is responding to a ge-
ographically limited problem.
  While the uniformity requirement allows Congress to ac-
count for “differences that exist between different parts of
the country,” id., at 159, it does not give Congress free rein
to subject similarly situated debtors in different States to
different fees because it chooses to pay the costs for some,
but not others. In Gibbons, 455 U. S. 457, the Court struck
down the Rock Island Railroad Transition and Employee
Assistance Act (RITA), in which Congress altered the order
of priority of claimants in a single railroad’s bankruptcy
proceedings. The Court recognized that the Bankruptcy
Clause “contains an affirmative limitation or restriction
upon Congress’ power,” namely, the uniformity require-
ment. Id., at 468. RITA exceeded this limitation, the Court
explained, because it singled out one railroad and did not
apply to other similarly situated railroads that were en-
gaged in bankruptcy proceedings. Id., at 470. The Court
reasoned that unlike the Regional Rail Reorganization Act,
RITA was “not a response either to the particular problems
12                  SIEGEL v. FITZGERALD

                      Opinion of the Court

of major railroad bankruptcies or to any geographically iso-
lated problem: it is a response to the problems caused by
the bankruptcy of one railroad.” Ibid. For that reason,
RITA “cannot be said to apply uniformly even to major rail-
roads in bankruptcy proceedings throughout the United
States.” Id., at 471. The Court emphasized that its “hold-
ing . . . does not impair Congress’ ability under the Bank-
ruptcy Clause to define classes of debtors and to structure
relief accordingly” and summarized that “[t]o survive scru-
tiny under the Bankruptcy Clause, a law must at least ap-
ply uniformly to a defined class of debtors.” Id., at 473.
   In sum, our precedent provides that the Bankruptcy
Clause offers Congress flexibility, but does not permit the
arbitrary, disparate treatment of similarly situated debtors
based on geography.
                               2
   Here, there is no dispute that the 2017 Act’s fee increase
was not geographically uniform. The only remaining ques-
tion is whether Congress permissibly imposed nonuniform
fees because it was responding to a funding deficit limited
to the Trustee Program districts. Under the specific cir-
cumstances present here, the nonuniform fee increase vio-
lated the uniformity requirement.
   All agree that the fee increase applied differently to
Chapter 11 debtors in different regions. Debtors in Ala-
bama and North Carolina, unlike debtors in the remainder
of the country, paid no fee increases for the first three quar-
ters of 2018. Moreover, the fee increase only applied to
newly filed cases, and not pending cases, in those two
States. That geographical disparity meant that petitioner
paid over $500,000 more in fees compared to an identical
debtor in North Carolina or Alabama.
   Recognizing that the 2017 Act caused such disparities,
respondent contends that those disparities were a permis-
sible effort to solve a particular geographical problem: the
                  Cite as: 596 U. S. ____ (2022)            13

                      Opinion of the Court

budgetary shortfall that befell the UST Fund, which sup-
ports the Trustee Program but not the Administrator Pro-
gram. Respondent argues that this problem justified Con-
gress’ imposition of fee increases specific to Trustee
Program districts in order to replenish the UST Fund’s cof-
fers. It is true that Congress’ stated goal in raising fees in
Trustee Program districts was to address this budgetary
shortfall. That shortfall, however, existed only because
Congress itself had arbitrarily separated the districts into
two different systems with different cost funding mecha-
nisms, requiring Trustee Program districts to fund the Pro-
gram through user fees while enabling Administrator Pro-
gram districts to draw on taxpayer funds by way of the
Judiciary’s general budget.
  The problem Congress sought to address here is thus dif-
ferent from the problem facing the debtors in the Regional
Rail Reorganization Act Cases. There, a “national rail
transportation crisis” prompted Congress to respond with
the Regional Rail Reorganization Act of 1973. 419 U. S., at
159. That crisis arose when eight major railroads located
in the Northeast and the Midwest entered reorganization
proceedings. Id., at 108. Congress responded accordingly
with legislation tailored to those regions. Id., at 108–109.
The problems prompting Congress’ disparate treatment in
this case, however, stem not from an external and geo-
graphically isolated need, but from Congress’ own decision
to create a dual bankruptcy system funded through differ-
ent mechanisms in which only districts in two States could
opt into the more favorable fee system for debtors.
  The Bankruptcy Clause affords Congress flexibility to
“fashion legislation to resolve geographically isolated prob-
lems,” id., at 159, but as precedent instructs, the Clause
does not permit Congress to treat identical debtors differ-
ently based on an artificial funding distinction that Con-
gress itself created. The Clause, after all, would clearly pro-
hibit Congress from arbitrarily dividing States into two
14                     SIEGEL v. FITZGERALD

                          Opinion of the Court

categories and charging different fees to States in different
categories unrelated to the needs of, or conditions in, those
States. The Clause does not allow Congress to accomplish
in two steps what it forbids in one.2
  A few observations on the limits of this decision are in
order. The Court does not today address the constitution-
ality of the dual scheme of the bankruptcy system itself,
only Congress’ decision to impose different fee arrange-
ments in those two systems. The Court’s holding today also
should not be understood to impair Congress’ authority to
structure relief differently for different classes of debtors or
to respond to geographically isolated problems. The Court
holds only that the uniformity requirement of the Bank-
ruptcy Clause prohibits Congress from arbitrarily burden-
ing only one set of debtors with a more onerous funding
mechanism than that which applies to debtors in other
States.
                              C
   The parties dispute the appropriate remedy. Petitioner
seeks a full refund of fees that it paid during the nonuni-
form period. Respondent argues that any remedy should
apply only prospectively, or should result in a fee increase
for debtors who paid less in the Administrator Program dis-
tricts. The parties raise a host of legal and administrative
concerns with each of the remedies proposed, including the
——————
   2 Respondent further argues that any uniformity violation should be

attributed to the Judicial Conference and not to Congress, because Con-
gress expected the Judicial Conference to implement the 2017 Act’s fee
increase in Administrator Program districts. As respondent sees it, it is
the Judicial Conference’s failure to implement the fee increase that is
responsible for the disparate fees, not the 2017 Act itself. Respondent
provides ample evidence that Congress likely understood, when it passed
the 2017 Act, that the Judicial Conference would impose the same fee
increase. That said, prior to the 2021 amendment, the fee statute did
not require the Judicial Conference to impose an equivalent increase. It
is that congressional decision that led to the disparities at issue here.
                  Cite as: 596 U. S. ____ (2022)                 15

                      Opinion of the Court

practicality, feasibility, and equities of each proposal; their
costs; and potential waivers by nonobjecting debtors. The
court below, however, has not yet had an opportunity to ad-
dress these issues or their relevancy to the proper remedy.
“[M]indful that we are a court of review, not of first view,”
Cutter v. Wilkinson, 544 U. S. 709, 718, n. 7 (2005), this
Court remands for the Fourth Circuit to consider these
questions in the first instance.
                         *    *     *
  For these reasons, the judgment of the Court of Appeals
for the Fourth Circuit is reversed, and the case is remanded
for further proceedings consistent with this opinion.

                                                   It is so ordered.