- Summary
- Challenge was made by a group of 75 abuse survivors
- Settlement was reached in bankruptcy court in 2022
Jan 12 (Reuters) – The U.S. Supreme Court declined on Monday to hear a challenge to the Boy Scouts of America’s landmark $2.46 billion settlement of sex abuse claims in a case involving a group of abuse survivors who wanted to pursue lawsuits against churches and other organizations that ran scouting programs where abuse occurred.
The Boy Scouts organization, now called Scouting America, said after the court’s action on Monday that it can now continue compensating abuse survivors and improving its scouting programs without the cloud of bankruptcy and litigation.
“When you’re in bankruptcy, you don’t do a lot of investment in anything but getting out of bankruptcy,” Scouting America CEO Roger Krone said in an interview.
The Supreme Court turned away an appeal by 75 plaintiffs of a lower court’s decision rejecting their claim that the bankruptcy deal improperly prevented them from suing other organizations that were partly liable for the abuse.
The settlement already has paid about $300 million to abuse survivors, and work will resume on claims evaluation and payment now that the appeals are over, Krone said. Scouting America’s settlement trustee, Barbara Houser, is working to add more funds to the total settlement by suing insurers and selling assets belonging to the organization that include paintings by Norman Rockwell and Joseph Csatari.
“For the survivors who are worried about there being adequate funds, there are significantly more funds that will be available to the trustee than the $2.46 billion that she has today,” Krone said.
Outside of bankruptcy, Scouting America also has worked to modernize its scouting programs and improve safety for the digital age by taking steps such as updating its training to prevent online predation and introducing more modern reporting tools such as an anonymous text hotline for abuse allegations, Krone said.
Joshua Schwartz, a lawyer whose law firm Eisenberg, Rothweiler, Winkler, Eisenberg & Jeck is co-counsel to more than 9,500 Boy Scouts abuse survivors, said the Supreme Court’s decision will allow the settlement trust to access $1.65 billion in funds that had been held in escrow during the appeal.
“Now that the appeals process is over, the plan of reorganization that was voted on and approved by survivors is no longer in jeopardy,” Schwartz said.
An attorney representing the 75 petitioning abuse survivors did not immediately respond to a request for comment.
The settlement, reached in 2022 in bankruptcy court in Delaware, granted immunity from lawsuits to those organizations in exchange for contributions to the Boy Scouts bankruptcy settlement. The Supreme Court later ruled that bankruptcy courts lacked the power to wipe away lawsuits against organizations that contributed to settlements but did not file for bankruptcy themselves, but its decision did not apply retroactively to older cases like the Boy Scouts bankruptcy.
After a federal judge ruled against the plaintiffs, the Philadelphia-based 3rd U.S. Circuit Court of Appeals upheld that decision.
Scouting America, as well as insurers and abuse survivors who support the deal, had urged the Supreme Court not to take the case, arguing that upending the settlement would have devastating emotional and financial consequences.
The appeal was supported by other abuse survivors who did not join the petition to the Supreme Court. A group that said it represented 1,000 former Boy Scouts had urged the Supreme Court to take up the case and allow abuse survivors to have their day in court.
The Boy Scouts filed for bankruptcy in 2020 after several U.S. states enacted laws allowing accusers to sue over decades-old abuse allegations, which led to a flood of new lawsuits.
The Supreme Court previously declined to halt the settlement in 2024, instead allowing the deal to move forward while the appeals proceeded in lower courts.
