SCOTUS Leaves Multibillion-Dollar Boy Scouts Bankruptcy Settlement In Place
The U.S. Supreme Court on Wednesday refused to examine a $2.4 billion bankruptcy settlement for the Boy Scouts of America.
Advertisement A cohort of 75 victims, among over 82,000 claimants against the Boy Scouts, contended that the justices ought to have revisited the settlement following their ruling last year in a comparable legal matter concerning Purdue Pharma, the manufacturer of the opioid analgesic OxyContin.
A 5-4 majority dismissed a bankruptcy settlement that would have protected the Sackler family from future litigation, despite their wealth being derived from operating the company.
In the Boy Scouts’ case, certain victims seek the ability to litigate against independent councils managing local scouting programs and third party entities, including churches and civic organizations, that endorsed these programs
Advertisement Third-party entities contributed billions of dollars to a settlement trust for victims and, pursuant to the agreement, are protected from future civil litigation.
Critics of these arrangements assert that courts typically do not have the authority to impede such lawsuits.
Advertisement Proponents argue that without safeguards for third party entities, significant bankruptcy agreements, such as those involving Purdue and the Boy Scouts, would not be implemented
Proponents argue that without safeguards for third-party entities, significant bankruptcy agreements, such as those involving Purdue and the Boy Scouts, would not be implemented.
The Boy Scouts of America declared bankruptcy in 2020 following expenditures exceeding $150 million to resolve numerous abuse lawsuits from 2017 to 2019, as per court documents.
In 2022, a federal bankruptcy court in Delaware sanctioned the reorganization plan, facilitating the Boy Scouts of America’s resurgence and establishing a fund to compensate victims.
The lower courts, including the Third Circuit Court of Appeals, affirmed the settlement agreement
The Lujan claimants petitioned the Supreme Court in October.
In early 2024, the Supreme Court denied an emergency appeal from the identical group of victims.
Although the Supreme Court did not elucidate its rationale, the ruling upholds an appellate court decision that determined the Boy Scouts’ organizational structure predominantly insulated it from appellate scrutiny
The nation’s highest court has been busy already this week.
The Supreme Court handed down two unanimous decisions that could reshape legal fights involving freight brokers, trucking crashes, and workplace arbitration agreements.
The broader ruling for the transportation industry came in Montgomery v
Caribe Transport II, LLC, where the court held that federal law does not automatically shield freight brokers from state negligent hiring lawsuits when they select unsafe trucking companies.
The case stems from a 2017 crash in Illinois in which a truck hit Shawn Montgomery’s tractor-trailer, badly injuring him.
His attorneys argued the broker ignored serious warning signs, including a prior careless driving citation involving the driver and at least three crashes involving the carrier over roughly five months.
Justice Amy Coney Barrett wrote the unanimous opinion that reversed that decision
Justice Brett Kavanaugh, joined by Justice Samuel Alito, wrote separately to clarify the limits of the decision.
He also called the legal question close, writing that “the conflicting contextual considerations make this a close case as we determine how to construe and where to draw the line on the statutory phrase ‘with respect to motor vehicles. ’”
Kavanaugh added that responsible brokers should still be able to defend themselves
The Transportation Intermediaries Association criticized the ruling.
Chris Burroughs, the group’s president and CEO, said TIA was “deeply disappointed” and warned the decision places an “impossible task on brokers. ”
The second ruling came in Jules v
Andre Balazs Properties, an arbitration case involving a former employee of the Chateau Marmont Hotel in Los Angeles.
The ruling provides clarity for employers and workers by confirming that a federal court that sends a case to arbitration may also handle the result afterward.
This article may contain commentary which reflects the author’s opinion.
