U.S. Supreme Court Justice Samuel Alito intervened on Friday by temporarily halting the Boy Scouts of America’s $2.46 billion settlement regarding decades of sex abuse claims. This move came in response to an appeal filed by a group of 144 abuse claimants who are contesting the settlement.
Alito’s decision to freeze the settlement allows the court more time to consider the request made by the abuse claimants on February 9th to block the settlement’s progression. Their argument centers on the contention that the settlement unfairly prevents them from pursuing legal action against entities that are not bankrupt, including churches that administered scouting programs, local Boy Scouts councils, and insurers that provided coverage to the Boy Scouts organization.
This development adds another layer to an ongoing legal debate about the authority of U.S. bankruptcy courts to discharge legal claims against non-bankrupt individuals and organizations. This debate is underscored by a separate case involving Purdue Pharma, the manufacturer of OxyContin.
In the Purdue Pharma case, the Supreme Court is deliberating whether the company’s owners, members of the affluent Sackler family, can be granted immunity from legal claims in exchange for agreeing to pay up to $6 billion to settle numerous lawsuits related to the company’s alleged deceptive marketing practices of its potent painkiller.
Alito’s intervention in the Boy Scouts settlement highlights the complex legal terrain surrounding bankruptcy proceedings and their implications for holding non-bankrupt parties accountable in civil litigation.
