Supreme Court leaves multibillion-dollar Boy Scouts bankruptcy settlement in place

By John Fritze, CNN

(CNN) — The Supreme Court on Monday declined to review a $2.4 billion bankruptcy settlement for the Boy Scouts of America, rejecting an appeal from a group of childhood sex-abuse victims who said the deal unlawfully blocked them from suing groups that ran local scouting programs.

The group of victims – 75 people out of more than 82,000 who filed claims against the Boy Scouts – argued that the justices should have reopened the settlement in light of its decision last year in a similar legal dispute in involving Purdue Pharma, the maker of the opioid pain mediciation OxyContin. In that case, a 5-4 majority rejected a bankruptcy agreement that would have shielded the Sackler family from future lawsuits even though it made its fortune running the company.

In the Boy Scouts case, some of the victims want to be able to sue independent councils that ran local scouting programs and third-party organizations, such as churches and civic groups, that supported the programs. Those third-party groups contributed billions of dollars to a settlement trust for victims and, under the agreement, are shielded from future civil lawsuits.

Critics of such arrangements say courts are generally not authorized to block such lawsuits. Supporters say that without protections for third-party groups, major bankruptcy deals like the ones for Purdue and the Boy Scouts would never take effect.

The Boy Scouts of America filed for bankruptcy in 2020 after spending more than $150 million to settle hundreds of abuse lawsuits between 2017 and 2019, according to court records. In 2022, a federal bankruptcy court in Delaware approved the reorganization plan, clearing the way for the Boy Scouts of America to reemerge and creating a fund to pay victims.

Lower courts, including the 3rd US Circuit Court Appeals, upheld the settlement agreement. The Lujan claimants appealed to the Supreme Court in October. The Supreme Court in early 2024 rejected an emergency appeal from the same group of victims.

Though the Supreme Court did not explain its reasoning, the decision leaves in a place an appeals court decision that found that the way the Boy Scouts deal was structured largely shielded it from review by appellate courts.

The-CNN-Wire
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