In an 8-1 opinion, the Supreme Court holds that the waiver of sovereign immunity under Section 106(a) does not extend to suits brought by a trustee under state law standing in the shoes of an actual creditor.

Saying that the constitutional infirmity was “small” and “short-lived,” the majority decided that prospective relief was enough because Congress subsequently enacted a law mandating uniformity in the future with regard to fees for U.S. Trustees and Bankruptcy Administrators

Although there was no split of circuits, the Supreme Court decided that Congress provided a sufficient remedy by requiring uniform fees going forward.

The Supreme Court resolved a split of circuits in an opinion that could give support to the notion that arbitration agreements are not enforceable in bankruptcy.

The Supreme Court’s MOAC decision contains language casting doubt on the validity of the doctrine of equitable mootness.