In re Technologies, Case No. 13-11482 (MFW)

• Citation: 611 B.R. 21
• Decision Date: 09 January 2020
• Docket Number: Case No. 13-11482 (MFW)
• Parties: IN RE: EXIDE TECHNOLOGIES, Reorganized Debtor.
• Court: U.S. Bankruptcy Court — District of Delaware

611 B.R. 21

IN RE: EXIDE TECHNOLOGIES, Reorganized Debtor.

Case No. 13-11482 (MFW)

United States Bankruptcy Court, D. Delaware.

Signed January 9, 2020

Lee S. Attanasio, James F. Conlan, Sidley Austin LLP, Maria A. Bove, Pachulski Stang Ziehl & Jones LLP, Carren Shulman, Shawn K. Watts, Sheppard Mullin Richter & Hampton LLP, Wendy Huang Waszmer, King & Spalding LLP, New York, NY, Terence G. Banich, Fox Rothschild LLP, Brandon M. Duncomb, James J. Mazza, Jr., Amy Van Gelder, Justin M. Winerman, Skadden Arps Slate Meagher & Flom LLP, Robert M. Fishman, Allen J. Guon, Allison B. Hudson, Christina M. Sanfelippo, Shaw Fishman Glantz & Towbin LLC, Jackson T. Garvey, Sidley Austin LLP, John W. Guzzardo, Horwood Marcus & Berk Chartered, Chicago, IL, Richard A. Barkasy, Stephen Della Penna, Schnader Harrison Segal & Lewis LLP, Johnna Darby, Fox Rothschild LLP, Laura Davis Jones, James E O'Neill, Pachulski Stang Ziehl & Jones LLP, Maris J. Kandestin, DLA Piper LLP, Jason M. Liberi, Skadden, Arps, Slate, Meagher & Flom LLP, Wilmington, DE, Richard W. Brunette, Jeffrey Parker, Randolph Visser, Sheppard, Mullin, Richter & Hampton, LLD, Alan J. Kornfeld, Jeremy V. Richards, Pachulski Stang Ziehl & Jones LLP, Samuel A Newman, Sidley Austin LLP, Los Angeles, CA, Patrick Scanlon, Law Offices of Patrick Scanlon, Milford, DE, Christine W. Kim, for Debtor.

Kara E. Casteel, ASK Financial LLP, Kendra K. Bader, Alex Govze, Joseph L. Steinfeld, Jr., Gary D. Underdahl, Ask, LLP, St. Paul, MN, Daniel B. Butz, Tamara K. Mann, Andrew John Roth-Moore, Eric D. Schwartz, Paige Noelle Topper, Morris, Nichols, Arsht & Tunnell LLP, Wilmington, DE, Brigette G. McGrath, Marianna Udem, ASK LLP, New York, NY, for Trustee.

Gerald C. Bender, Jeffrey Blumenfeld, Eric S Chafetz, R. Scott Thompson, Lowenstein Sandler LLP, Stieg D. Olson, Adam B. Wolfson, Quinn Emanuel Urquhart & Sullivan LLP, New York, NY, Matthew Boxer, Michael J. Hahn, Paul Kizel, Sharon L. Levine, Kenneth A. Rosen, Lowenstein Sandler LLP, Roseland, NJ, Ann C. Cordo, Delaware Department of Justice, Andrew R. Remming, Eric D. Schwartz, Robert J. Dehney, Morris, Nichols, Arsht & Tunnell LLP, Wilmington, DE, Eric Winston, Quinn Emanuel Urquhart & Sullivan, LLP, Los Angeles, CA, for Creditor Committee.

Erin R. Fay, Bayard, P.A., New York, NY, Robert J. Dehney, Morris, Nichols, Arsht & Tunnell LLP, Wilmington, DE, for Creditor Committee/Trustee.

OPINION ¹

Mary F. Walrath, United States Bankruptcy Judge Before the Court is the motion of Exide Technologies ("Exide") to reduce the quarterly fees owed by Exide to the United States Trustee ("UST") to the fees applicable at the time its Plan was confirmed. The UST opposes the motion procedurally, asserting that Exide's motion seeks declaratory relief that is only available in an adversary proceeding, and substantively, contending that the increased fees charged after 2017 are constitutionally permitted. The Court will deny Exide's motion because the increased quarterly fees are constitutional.²

I. BACKGROUND

On June 10, 2013, Exide filed a voluntary petition under chapter 11 of the Bankruptcy Code. Exide's plan of reorganization ("the Plan") was confirmed on March 27, 2015, and became effective on April 30, 2015. The Plan provided that "[t]he reorganized debtor shall continue to pay fees pursuant to section 1930 of title 28 of the United States Code until the Chapter 11 Case is closed by entry of the Final Decree." (D.I. 3409 at § 15.2.)

More than two years later, on October 26, 2017, Congress amended section 1930 to increase the quarterly fees that chapter 11 debtors pay to the UST (the "2017 Amendment"). Pursuant to the 2017 Amendment, Exide's quarterly fee increased from $30,000 to $250,000 per quarter.

On June 12, 2019, Exide filed its Motion, asserting that the amended fee schedules did not apply to Exide based on several statutory and constitutional arguments. On July 15, 2019, the UST responded opposing the motion and asserting that Exide's desired relief could only be obtained through an adversary proceeding. Additional briefs and replies were filed on August 5 and August 30, 2019. Oral argument was held on September 18, 2019. The matter is ripe for decision.

II. JURISDICTION

This Court has jurisdiction over this core matter which involves administration of the bankruptcy case. 28 U.S.C. §§ 1334(b) and 157(a) & (b).

III. DISCUSSION

A. Applicability of Amendment to Pending Cases

Exide maintains that the increased fees are inapplicable to it because there is no express language in the 2017 Amendment making the increase in fees applicable to pending chapter 11 cases. Exide contrasts the lack of express language for chapter 11 cases with the express language with respect to chapter 12 cases in that same Amendment.³ Exide observes that, "[w]here Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion." Refined Metals Corp. v. NL Indus., Inc., 937 F.3d 928, 932 (7th Cir. 2019) (quoting Russello v. United States, 464 U.S. 16, 23, 104 S.Ct. 296, 78 L.Ed.2d 17 (1983) ).

Further, Exide notes that the 1996 quarterly fee amendment contained express language making the new fees applicable to pending cases.⁴ Exide argues that the omission of any express language in the 2017 Amendment making it applicable to pending post-confirmation cases renders it inapplicable by negative inference. See, e.g., In re Life Partners Holdings, Inc., 606 B.R. 277, 285 (Bankr. N.D. Tex. 2019).

The UST asserts that the 2017 Amendment applied to all cases when it went into effect and did not exempt cases filed prior to fiscal year 2018. According to the UST, the conduct that triggers liability under section 1930(a)(6)(B) is the making of a disbursement of $1 million or more, not the commencement of the case.

In interpreting a statute, the Court must begin its analysis with the plain meaning of the statute. Lamie v. U.S. Trustee, 540 U.S. 526, 534, 124 S.Ct. 1023, 157 L.Ed.2d 1024 (2004). The plain meaning of a statutory provision "is determined by reference to the language itself, the specific context in which that language is used, and the broader context of the statute as a whole." Robinson v. Shell Oil Co., 519 U.S. 337, 341, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997). "[I]n matters of statutory interpretation, the plain meaning of statutory language is often illuminated by considering not only the particular statutory language at issue, but also the structure of the section in which the key language is found, and the design of the statute as a whole and its object." Pellegrino v. United States Transp. Sec. Admin., 896 F.3d 207, 216 n.10 (3d Cir. 2018) reh'g en banc granted, 904 F.3d 329 (3d Cir. 2018).

In this case, the 2017 Amendment changed section 1930(a)(6)(B) to read:

During the fiscal years 2018 through 2022, if the balance of the United States Trustee System Fund as of September 30 of the most recent full fiscal year is less than $200,000,000, the quarterly fee payable for a quarter in which disbursements equal or exceed $1,000,000 shall be the lesser of 1 percent of such disbursements or $250,000.

28 U.S.C. § 1930(a)(6)(B).

The language of the subsection indicates that the object of the amendment is not cases, but disbursements. As the UST correctly notes, the conduct that triggers liability under that section is the making of a disbursement of $1 million or more. Similarly, the temporal reach of the amendment is also expressly defined, not through case dates, but through fiscal years: 2018 through 2022. The application of the increased fees is not a function of when a case was filed or a plan confirmed; rather, the application of the increased fees is a function of the amount and timing of a disbursement and the health of the UST fund.

The legislative history supports this interpretation. "The amendments made by this section shall apply to quarterly fees payable under section 1930(a)(6) of title 28, United States Code, as amended by this section, for disbursements made in any calendar quarter that begins on or after the date of enactment of this Act." Pub. L. No. 115-72, § 1004(c) (uncodified). Thus, the Court concludes that the 2017 Amendment applies to cases pending at the time of its enactment as well as to cases filed thereafter through 2022.

The fact that the 2017 Amendment provides express language with respect to its application to chapter 12 cases supports this conclusion, rather than refutes it as Exide argues. The express language provides an exception (for chapter 12 cases) to the general rule that the Amendment's increased fees will apply to all pending cases including post-confirmation cases. In this regard, the 2017 Amendment states that "[t]he amendments ... shall apply to (1) any bankruptcy case that is pending on the date of this Act; in which the plan under chapter 12 of title 11, United States Code, has not been confirmed on the date of enactment of this Act ... and (2) any bankruptcy case that commences on or after the date of enactment of this Act." Pub. L. No. 115-72, § 1005, 131 Stat. 1224, 1232-34 (2017) (emphasis added). If the 2017 Amendment did not generally apply to pending, post-confirmation cases, as Exide asserts, there would have been no need for Congress to say that it did not apply to pending, post-confirmation chapter 12 cases.

This conclusion is bolstered by the introduction to section 1930 which states:

Except as provided in subparagraph (B), in addition to the filing fee paid to the clerk, a quarterly fee shall be paid to the United States Trustee, for deposit in the Treasury, in each case under chapter 11 of title 11 for each quarter until the case is converted or dismissed, whichever occurs first.

28 U.S.C. § 1930(a)(6)(A). The 2017 Amendment partially displaced the fee schedules contained in section 1930(a)(6) but did not amend the introductory sentence. Thus, the...