US Supreme Court lets $2.46 billion Boy Scouts sex abuse settlement proceed

[February 23, 2024]  By Dietrich Knauth

(Reuters) -The U.S. Supreme Court on Thursday allowed the Boy Scouts of America's $2.46 billion settlement with sexual abuse victims to move forward, lifting a temporary pause imposed in response to an appeal by 144 former scouts who opposed the agreement.

The order supersedes one issued by Justice Samuel Alito on Feb. 16 that froze the settlement to give the full court more time to consider a Feb. 9 request by abuse claimants who sought to stop the settlement from moving forward while they pursue appeals.

The Boy Scouts of America (BSA) filed for bankruptcy in 2020 after several U.S. states enacted laws letting accusers sue over decades-old abuse allegations. The organization ultimately reached a settlement, approved in court in 2022, that would pay abuse victims amounts ranging from $3,500 to $2.7 million.

The settlement involves more than 82,000 men who have said they were abused as children by troop leaders while in the Boy Scouts. More than 86% of abuse survivors voted to support the agreement in bankruptcy court.

The 144 abuse claimants contend the settlement unlawfully stops them from pursuing lawsuits against organizations that are not bankrupt, such as churches that ran scouting programs, local Boy Scouts councils and insurers that provided coverage to the Boy Scouts organization.

Adam Slater, a lawyer representing claimants who supported the settlement, expressed gratitude that the Supreme Court did not further delay the Boy Scouts organization's efforts to pay abuse victims.

"With more than 12,400 survivors in this case over the age of 70 and more than 2,200 over the age of 80, these brave individuals deserve to receive compensation in their lifetimes," Slater said.

Gilion Dumas, a lawyer representing 67 of the men who have appealed, said that "the longer this (legal process) goes on, the harder it gets to reverse" the settlement.

"Getting a Supreme Court stay in a civil case was always a long shot," Dumas said. "But we wanted to try everything possible to preserve our appeal."

Their appeal is due to be heard by the Philadelphia-based 3rd U.S. Circuit Court of Appeals on April 9.

A view of the U.S. Supreme Court building on the first day of the court's new term in Washington, U.S. October 3, 2022. REUTERS/Jonathan Ernst/File Photo

The men who have appealed the settlement argued that the Boy Scouts case should remain on hold until the Supreme Court decides whether U.S. bankruptcy courts can wipe away legal claims against non-bankrupt people and organizations, an issue the justices are considering in a case involving OxyContin maker Purdue Pharma's bankruptcy.

The Supreme Court will decide whether Purdue Pharma's owners, members of the wealthy Sackler family, can receive immunity in exchange for paying up to $6 billion to settle thousands of lawsuits over the company's allegedly misleading marketing of its powerful pain medication.

The trustee in charge of administering the Boy Scouts settlement, retired bankruptcy judge Barbara Houser, said following the Supreme Court's action that she "resumed all operations, including the evaluation and payment of claims." The settlement trust already has paid nearly $8 million to more than 3,000 abuse claimants.

The Boy Scouts welcomed the Supreme Court's go-ahead.

"This decision allows the trustee to resume her important work compensating survivors, and it provides a path for the BSA to continue its mission delivering scouting to more than a million young men and women across the country," the organization said in a statement.

Douglas Kennedy, an abuse survivor who co-led the official committee representing abuse claimants in the bankruptcy, called the Supreme Court's quick turnaround good news, but said it still presented "another emotionally wrenching twist" in the years-long quest by survivors for closure.

"We are still on pins and needles waiting to see what the final resolution will be in Purdue," Kennedy said.

(Reporting by Dietrich Knauth and Andrew Chung in New York; Editing by Will Dunham)

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