Siegel v. Fitzgerald (21-441)

argument 21-441

Siegel v. Fitzgerald

Supreme Court of the United States 1h 15m 8 speakers 8 chapters transcribed 5 days ago official recording ↗

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What is the petitioner's main argument about the bankruptcy fee uniformity?

Mr. Geyser 0:00

We will hear argument next in case 21441, Siegel versus Fitzgerald. Mr. Geyser. Thank you, Mr. Chief Justice, and may it please the court. The 2017 Act's quarterly fee increase presents a clear and obvious violation of the bankruptcy clause's uniformity requirement. Congress arbitrarily divided the country into two different groups and then authorized different fees for identically situated debtors because their bankruptcy is not a very important thing. Bankruptcies happen to arise in different states. There are no regional differences, distinct local conditions, or industry-specific problems justifying this non-uniform treatment. The division is entirely artificial. There is nothing unique about North Carolina or Alabama that justifies a separate bankruptcy system with its own special lower fees.

Mr. Geyser 0:46

Congress has simply decided to treat the same class of debtors differently. Because her bankruptcies arose in, say, Virginia instead of North Carolina. The Constitution requires uniform bankruptcy laws, and a bifurcated system that imposes different charges on indistinguishable debtors is not uniform under any ordinary definition. Because the twenty seventeen law is not uniform on its face, it violates the Constitution, and this Court should reverse. I welcome the Court's questions.

Clarence Thomas 1:15

Uh Mr Geyser, is the real problem here uh as to lack of uniformity the uh fees, the differential fees, or the original uh car uh division of the country into two different types of districts.

Mr. Geyser 1:32

I I think it's both, Your Honor. I think that Congress has artificially bifurcated the country into two different systems and now it's charging debtors different fees based on that original bifurcation. Either way though, Congress is treating an identically situated debtor class. Debtors that look alike in every material respect. There's nothing about them that justifies different treatment, and yet they're paying more for their bankruptcies based entirely on where they happen to file.

Clarence Thomas 1:55

But wouldn't you have a problem if you accept uh the fact that if if you say that the division is uh legitimate, then it would seem to follow that the differential fees would uh be uh ge based on geography.

Mr. Geyser 2:10

Well, uh no, Your Honor, because again, the the original division is in fact based on geography, and Section five eighty one makes this clear. The trustee system is divided into forty eight states, and then there are two holdout districts for Alabama and North Carolina. And there there's really no way to cut it other than a geographic distinction. There's no reason that Congress would treat debtors who look exactly the same, who are electronic retailers any differently because they're bankruptcies in Virginia as opposed to somewhere else. But

John G. Roberts 2:38

I I think uh One answer, ready answer, is well they're treating them differently because they're different systems. Now that only makes sense if there's a reason that they're different systems, and I have not been able to figure out what that reason is. What is that reason? Why are there two different systems? Th

Mr. Geyser 2:56

there is no reason, Your Honor. It's entirely arbitrary.

John G. Roberts 2:58

I know, but some there must be some reason that it happened. I mean they just didn't pull out the map and suddenly say let's pick out two States and map them a whole separate system. And if there's a reason for it, then I think it's a very strong case on the other side that, well, the fees in one can be one and the fees in the other can be different, and it's because there's a reason to have two different systems. So what is

Mr. Geyser 3:19

it? The the only reason that we've seen, Your Honor, is politics and local preferences.

John G. Roberts 3:24

What do you mean politics?

Mr. Geyser 3:25

I the the bankruptcy judges and the bankruptcy bar in North Carolina and Alabama liked the system the way it was. So they lobbied their their congressmen who included exceptions in the statute for those two states. The the General Accounting Office looked at this in nineteen ninety two and said there is no reason to have two different systems. In fact, the and the government has conceded in the lower courts, there's nothing unique about the bankruptcy system in North Carolina.