LITIGATION TRENDS 2024 | 23 T O C E M P A N T I I P C A P R O W C C O N T A C T I N T A P P P A T C C L S E C 22 | Weil, Gotshal & Manges LLP of fraud claims in bankruptcy, the Supreme Court is set to tackle several important bankruptcy cases in the 20232024 Term. The first, Harrington v. Purdue Pharma L.P., No. 23-124 (argued December 4, 2023), arises out the opioid-related bankruptcy of Purdue Pharma. Although only Purdue Pharma and its associated corporate entities declared bankruptcy, members of the Sackler family (who controlled the company) agreed to contribute over $5 billion to the bankruptcy estate in exchange for a release of liability for claims that could have been brought against them in their personal capacities. The Supreme Court will decide whether the Bankruptcy Code’s general language allowing bankruptcy courts to confirm plans of reorganization including any “appropriate provision not inconsistent with” the Code, 11 U.S.C. § 1123(b)(6), and to issue “necessary or appropriate” orders, id. § 105(a), authorizes such “third-party releases.” The Court’s decision will have major implications for parties’ abilities to use the bankruptcy process in cases arising from mass tort liability. Next, in Truck Insurance Exchange v. Kaiser Gypsum Co., No. 22-1079 (argued March 19, 2024), the Court will clarify when a party has statutory standing as a “party in interest” to object to a chapter 11 reorganization plan. The debtor, Kaiser Gypsum, negotiated a plan that imposed certain fraud-prevention measures with respect to asbestosrelated claims that could be made against the bankruptcy trust for which the debtor lacked insurance. But the plan required no such measures for claims that were insured. The Fourth Circuit ruled that Kaiser Gypsum’s insurer, Truck Insurance Exchange, could not object to the Plan. The Fourth Circuit reasoned that, because the bankruptcy plan did not leave Truck Insurance worse off than it was before, Truck Insurance was not a “party in interest” and therefore lacked standing to object. The Supreme Court is set to assess Fourth Circuit’s construction of “party in interest” in a decision that will likely have broad implications for who may object to a reorganization plan. Together, these decisions have the potential to make the 2023-2024 Term one of the most significant terms for bankruptcy law in recent Supreme Court history. The Supreme Court Punts (For Now) On Communications Decency Act and Tester Standing The Supreme Court’s docket has been shrinking: The Court issued just 58 decisions during the 2022-2023 Term – the lowest total in recent history (see nearby chart illustrating ten years’ worth of opinions). Exacerbating this trend, the Court has shown a willingness to avoid ruling on several issues of significance to the business community even in the few cases it chooses to hear. Two recent decisions – Gonzalez v. Google, 598 U.S. 617 (2023), and Acheson Hotels v. Laufer, 601 U.S. 1 (2023) – exemplify this trend. In Gonzalez, a case highlighted in Weil’s 2023 Litigation Trends Report, the Supreme Court granted certiorari to decide whether an internet platform is immune from liability under Section 230 of the Communications Decency Act when it provides algorithmic recommendations of allegedly tortious third-party content. But the Court avoided that question, holding instead that the complaint failed on other grounds. The Court, however, may have little choice but to confront the issue in the near future, as circuit judges continue to call on the Court to pare back immunity under Section 230. Notably, in a recent dissent from denial of rehearing en banc, a nearmajority of the Fifth Circuit criticized the circuit’s broad interpretation of Section 230 as deviating from the statute’s text and called on “our nation’s highest court to properly interpret the statutory language enacted by Congress.” In Laufer, the Court’s first decision of the 2023-2024 Term, the Supreme A P P Appeals and Strategic Counseling CROSS-PRACTICE FOCUS
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