An Appeal to Reason: Appellate Court Signals Approval of Boy Scouts Settlement

An appellate court in the United States does not appear willing to question the $2.46 billion settlement of the Boy Scouts of America (BSA) regarding sexual abuse claims. This agreement was approved last year during a bankruptcy proceeding to address the claims of 82,500 men who were abused as children by troop leaders. A panel of three judges from the 3rd U.S. Circuit Court of Appeals in Philadelphia reviewed appeals filed against the 2022 ruling. The settlement is being challenged by 144 abuse survivors and some of the youth organization's insurers. They are seeking permission to hold organizations such as local Boy Scouts councils and churches involved in the programs legally accountable. These organizations were exempted from lawsuits in exchange for contributions to the bankruptcy settlement, even though they did not file for bankruptcy themselves. Attorney Delia Lujan Wolff, representing 75 survivors, argued that due to a U.S. Supreme Court ruling in a similar case (Purdue Pharma), the BSA should not be able to shield organizations like the Catholic Diocese of Agana in Guam from liability. Wolff contended the settlement could be overturned as only a fraction of the funds have been paid to the affected individuals. The judges inquired about the practical implications of reopening the bankruptcy case. U.S. Circuit Judge Marjorie Rendell expressed concerns about the consequences that the funds would have to be returned and numerous institutions could be sued, which according to the judges, could lead to chaos. The BSA argued that unraveling the settlement would have devastating emotional and financial consequences. Additionally, payments already begun to abuse victims could be reversed, and properties used to pay off assets belonging to local councils could not be reclaimed. The Boy Scouts received support from attorney Evan Smola, who argued that the collapse of the settlement would mean a renewed confrontation with the abuse for the victims. Supporters of the settlement argued that the Supreme Court's ruling in the Purdue case does not apply to concluded settlements like that of the Boy Scouts. The court could also uphold the deal under the judicial doctrine of “equitable mootness,” which prevents the unraveling of legal settlements when it would be inequitable. The case is titled: In re: Boy Scouts of America, at the U.S. Court of Appeals for the Third Circuit, Number 23-1664.