Appeals Court Signals Support for Boy Scouts' $2.46 Billion Sex Abuse Settlement

Third Circuit Panel Examines Survivor Rights vs. Settlement Stability

A federal appeals court panel in Philadelphia indicated on November 6, 2024, that it would maintain the Boy Scouts of America’s $2.46 billion settlement addressing sexual abuse claims. During oral arguments, the three-judge panel of the 3rd U.S. Circuit Court of Appeals tackled whether non-bankrupt entities can receive lawsuit immunity through the bankruptcy process. The deal shields local councils and churches that ran scouting programs from future lawsuits despite these organizations not declaring bankruptcy themselves. Judge Marjorie Rendell stated that overturning the settlement would cause it to “implode,” disrupting compensation already flowing to survivors.

5 Key Points

• The settlement addresses 82,500 individual claims of childhood sexual abuse by Boy Scout troop leaders.
• A group of 144 survivors seeks to preserve lawsuit rights against local scouting organizations.
• The Boy Scouts entered bankruptcy in February 2020 as states eliminated time limits on abuse claims.
• Dismantling the deal would require survivors to return compensation payments already received.
• Local councils contributed property and assets in exchange for legal protection.

Purdue Pharma Ruling Sets Stage for Challenge

Attorney Delia Lujan Wolff, representing 75 abuse survivors, cited the Supreme Court’s Purdue Pharma decision as precedent against shielding non-bankrupt entities. Wolff highlighted organizations like the Catholic Archdiocese of Agana in Guam that would receive immunity without declaring bankruptcy. “Nobody can bargain away my clients’ claims without their consent, not even other survivors,” Wolff stated, underlining survivors’ rights to pursue individual legal action.

Bankruptcy Process Forces Survivors to Relive Trauma

Attorney Evan Smola, representing survivors backing the agreement, revealed the personal cost of seeking compensation. Survivors faced hours of questioning about their abuse experiences, with bankruptcy professionals scrutinizing each claim. “These survivors tore away the scar tissue and faced their abuse head on,” Smola told the court. The Boy Scouts organization noted that local councils sold real estate and assets to fund the settlement trust.

Get a free legal case review today

Did you develop any of the following injuries after being exposed to Fire Fighting Foam (AFFF)? * Choose one Ulcerative Colitis Kidney Cancer Pancreatic Cancer Testicular Cancer Prostate Cancer Bladder Cancer Thyroid Disease Liver Cancer Non-Hodgkin's Lymphoma None of the above Were you exposed to Fire Fighting Foam (AFFF)? *

YesNo

Which medication(s) did you take during your pregnancy? * Choose one Tylenol Acetaminophen Alka-Seltzer Coricidin Dayquil Excedrin FluTherapy Midol Mucinex Nyquil Panadol Robitussin Sinex Sudafed Theraflu Other Medication(s) Was your child diagnosed with Autism, ADHD or another condition? * Choose one Autism/Autism Spectrum Disorder (ASD) Attention Deficit Hyperactivity Disorder (ADHD) Asperger’s Syndrome Kanner’s Syndrome Childhood Disintegrative Disorder Pervasive Developmental Disorder Other Medical Condition How old was your child at the time of diagnosis? *

Under 18 years old18+ years old

Did the accident occur within the last 2 years? *

YesNo

First Name *

Last Name *

Email Address *

ZIP Code *

Phone Number *

What is your case type? * Choose one -------------------- Asbestos Baby Formula Camp Lejeune Clergy Abuse CPAP Elmiron Exactech Firefighting Foam FTX Exchange Hair Relaxer Hernia Mesh Paraquat PFAS Roundup Sex Abuse Social Media Talcum Powder Tepezza Tylenol -------------------- Birth Injury Car Accident FELA Medical Malpractice Motorcycle Accident Slip and Fall Trucking Accident Uber & Lyft Rideshare Workplace Injury Weight Loss Wrongful Death -------------------- Something Else

Human Verification *

I understand and agree that (a) submitting this form does not create an attorney-client relationship, (b) I am not already represented by an attorney for this matter, (c) the information I submit will be shared with a law firm, and (d) I have read and accepted the terms and conditions of the Privacy Policy, Terms of Service and Legal Disclaimer. Further, I consent to being contacted by a law firm or its agent after submitting this request.

Thank you! Your submission has been received!

Oops! Something went wrong while submitting the form.

State Law Changes Triggered BSA Bankruptcy

The Boy Scouts filed for Chapter 11 protection in February 2020 after multiple states removed statutes of limitations on abuse claims. The 2022 bankruptcy court created a $2.46 billion trust, combining cash, property, and insurance settlements. The Third Circuit appeal, case number 23-1664, now tests whether non-bankrupt entities can shield themselves through another organization’s bankruptcy.

Settlement Distribution Creates Legal Hurdles

The appeals court faces a concrete problem: compensation payments have started flowing to survivors. Attorneys defending the deal point to the “equitable mootness” doctrine, which blocks courts from undoing bankruptcy settlements when reversal would harm beneficiaries. The Boy Scouts have begun liquidating assets and distributing funds, making any attempt to unwind the deal legally complex.

Mass Tort Bankruptcy Precedent Hangs in Balance

The Third Circuit’s ruling will shape how courts handle third-party releases in large-scale abuse cases. The similarities to Purdue Pharma raise questions about using bankruptcy to resolve institutional abuse claims. This settlement structure could affect future instances in which multiple organizations share responsibility for past misconduct.