The U.S. Supreme Court declined to review a challenge to the $2.4 billion bankruptcy settlement involving the Boy Scouts of America, leaving intact a controversial agreement that compensates victims of childhood sexual abuse while protecting many organizations affiliated with local scouting programs from future lawsuits. The decision marks another significant development in one of the largest sexual abuse settlements in U.S. history.
The appeal was brought by a group of 75 abuse survivors out of more than 82,000 claimants who filed claims against the Boy Scouts. These victims argued that the settlement unlawfully blocks them from pursuing lawsuits against independent local councils, churches, civic groups, and other organizations that sponsored scouting activities. They contended that the Supreme Court should reconsider the settlement in light of its 2024 decision involving Purdue Pharma, in which the Court struck down a bankruptcy agreement that would have shielded members of the Sackler family from future civil liability.
Under the Boy Scouts settlement, third-party organizations contributed billions of dollars to a trust established to compensate victims. In exchange, those entities received legal protection from future lawsuits related to abuse claims. Critics argue that bankruptcy courts generally lack authority to grant such broad immunity to parties that did not themselves file for bankruptcy. Supporters maintain that these protections were necessary to secure contributions and make the settlement possible.
The Boy Scouts filed for bankruptcy in 2020 after spending more than $150 million defending and settling abuse-related lawsuits between 2017 and 2019. In 2022, a federal bankruptcy court in Delaware approved a reorganization plan that allowed the organization to emerge from bankruptcy and create a compensation fund for survivors. The settlement was subsequently upheld by lower courts, including the United States Court of Appeals for the Third Circuit. The Supreme Court’s refusal to hear the appeal leaves those rulings in place.
The Court provided no explanation for its decision, which is common when it declines to hear a case. However, the outcome effectively ends one of the major remaining challenges to the Boy Scouts bankruptcy plan.
The Supreme Court also issued two unanimous decisions this week addressing transportation law and arbitration procedures. In Montgomery v. Caribe Transport II, LLC, the Court ruled that federal law does not automatically protect freight brokers from state-law negligent hiring lawsuits when they select unsafe trucking companies. The case arose from a 2017 Illinois crash that seriously injured Shawn Montgomery after a truck collided with his tractor-trailer.
Writing for the Court, Amy Coney Barrett concluded that federal transportation law does not broadly preempt such negligence claims. In a separate opinion, Brett Kavanaugh, joined by Samuel Alito, emphasized that the legal issue was close and noted that freight brokers still have opportunities to defend themselves in court. The ruling was criticized by the Transportation Intermediaries Association, which warned it could create significant challenges for brokers.
In another unanimous decision, Jules v. Andre Balazs Properties, involving a former employee of the Chateau Marmont, the Court clarified that federal courts may retain authority to oversee arbitration outcomes after directing disputes into arbitration. The ruling provides additional guidance for employers and employees regarding the interaction between arbitration agreements and federal court proceedings.
Together, the decisions reflect the Court’s ongoing role in shaping major issues involving bankruptcy law, corporate liability, transportation litigation, and workplace dispute resolution.
