Supreme Court of the United States

Travelers Indemnity Co. v. Bailey

June 18, 2009557 U.S. 137

Summary

Justice Souter, joined by Chief Justice Roberts and Justices Scalia, Kennedy, Thomas, Breyer, and Alito, held that the unambiguous terms of the 1986 bankruptcy injunction covered the state-law actions alleging Travelers’ own misconduct connected to its insurance relationship with Johns-Manville. The Bankruptcy Court had jurisdiction to interpret and enforce its prior orders, and parties bound by those final orders generally could not collaterally challenge the court’s original subject-matter jurisdiction. The Court reversed and remanded, leaving open whether particular respondents were bound by the orders, including whether notice satisfied due process. Justice Stevens, joined by Justice Ginsburg, dissented, reasoning that the original injunction covered only claims derivative of Manville’s liability and that the 2004 order improperly expanded it to reach independent claims beyond the Bankruptcy Court’s authority.

Holding

  • Whether the 1986 injunction covered the state-law actions against Travelers for its own alleged misconduct.. The actions fell within the injunction’s unambiguous definition of Policy Claims, which was not confined to claims derivative of Manville’s liability.
  • Whether the Bankruptcy Court had jurisdiction to enter the Clarifying Order.. The Bankruptcy Court had jurisdiction to interpret and enforce its prior orders through the Clarifying Order.
  • Whether the original jurisdictional basis for the final 1986 orders could be challenged during enforcement.. Respondents bound by the 1986 orders who had a fair opportunity to challenge subject-matter jurisdiction could not reopen that question through a collateral attack during enforcement.

Docket 08-295

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