SCOTUS Leaves Multibillion-Dollar Boy Scouts Bankruptcy Settlement In Place

The U.S. Supreme Court on Monday refused to examine a $2.4 billion bankruptcy settlement for the Boy Scouts of America, dismissing an appeal from a cohort of childhood sexual abuse victims who contended that the agreement unlawfully impeded their ability to sue organizations that operated local scouting programs.

A cohort of 75 victims, among over 82,000 claimants against the Boy Scouts, contended that the justices ought to have revisited the settlement following their ruling last year in a comparable legal matter concerning Purdue Pharma, the manufacturer of the opioid analgesic OxyContin.

A 5-4 majority dismissed a bankruptcy settlement that would have protected the Sackler family from future litigation, despite their wealth being derived from operating the company.

In the Boy Scouts case, certain victims seek the ability to litigate against independent councils managing local scouting programs and third-party entities, including churches and civic organizations, that endorsed these programs.

Third-party entities contributed billions of dollars to a settlement trust for victims and, pursuant to the agreement, are protected from future civil litigation.

Critics of these arrangements assert that courts typically lack the authority to impede such lawsuits. Proponents argue that without safeguards for third-party entities, significant bankruptcy agreements, such as those involving Purdue and the Boy Scouts, would fail to be implemented.

The Boy Scouts of America declared bankruptcy in 2020 following expenditures exceeding $150 million to resolve numerous abuse lawsuits from 2017 to 2019, as per court documents. In 2022, a federal bankruptcy court in Delaware sanctioned the reorganization plan, facilitating the Boy Scouts of America’s resurgence and establishing a fund to compensate victims.

The lower courts, including the Third Circuit Court of Appeals, affirmed the settlement agreement. The Lujan claimants petitioned the Supreme Court in October. In early 2024, the Supreme Court denied an emergency appeal from the identical group of victims.

Although the Supreme Court did not elucidate its rationale, the ruling upholds an appellate court decision that determined the Boy Scouts’ organizational structure predominantly insulated it from appellate scrutiny.

The nation’s highest court has been busy already this week.

The U.S. Supreme Court will hear a closely watched legal dispute over transgender athletes in public schools, with oral arguments scheduled for Tuesday.

The issue has fueled debate in nearly 30 states with similar laws, as courts and communities grapple with how to balance competitive fairness in sports with protections under federal law, including Title IX.

The justices will consider two cases from Idaho and West Virginia challenging state laws that prohibit transgender and nonbinary students from competing on female-only sports teams in public schools and colleges. Lower courts have previously blocked those laws from taking effect.

Idaho was the first state to enact a law restricting transgender students from participating on girls’ sports teams, passing the Fairness in Women’s Sports Act in 2020.

West Virginia followed in 2021 with its Save Women’s Sports Act. In 2023, the Supreme Court temporarily blocked enforcement of West Virginia’s law while legal challenges continued.

The lawsuits were brought by Lindsay Hecox in Idaho and Becky Pepper-Jackson in West Virginia. Hecox, a 24-year-old senior at Boise State University, has moved to dismiss her case as she approaches graduation in spring 2026 and no longer plans to compete in women’s sports in Idaho.

Pepper-Jackson, a 15-year-old who has identified as female since third grade, is continuing her legal challenge and has sought to compete on girls’ teams, placing third in the discus and eighth in the shot put at a state track meet.

Both students have faced harassment related to their cases. In West Virginia, two students alleged that Pepper-Jackson harassed them while seeking to participate in girls’ sports, a report said.

The Supreme Court’s decision, expected by late June 2026, could have implications beyond school athletics, potentially influencing policies affecting LGBTQ+ rights in workplaces, public accommodations, and access to government benefits.

The Justice Department under the Trump administration supports the state laws and is expected to argue their broader federal implications during the hearing.