(Slip Opinion) OCTOBER TERM, 2008 1 

Syllabus 

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is

being done in connection with this case, at the time the opinion is issued.

The syllabus constitutes no part of the opinion of the Court but has been

prepared by the Reporter of Decisions for the convenience of the reader. 

See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337. 

SUPREME COURT OF THE UNITED STATES 

Syllabus 

TRAVELERS INDEMNITY CO. ET AL. v. BAILEY ET AL. 

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR 

THE SECOND CIRCUIT 

No. 08–295. Argued March 30, 2009—Decided June 18, 2009* 

As part of the 1986 reorganization plan of the Johns-Manville Corporation (Manville), an asbestos supplier and manufacturer of asbestoscontaining products, the Bankruptcy Court approved a settlement 

providing that Manville’s insurers, including The Travelers Indemnity Company and related companies (Travelers), would contribute to 

the corpus of the Manville Personal Injury Settlement Trust (Trust), 

and releasing those insurers from any “Policy Claims,” which were

channeled to the Trust. “Policy Claims” include, as relevant here, 

“claims” and “allegations” against the insurers “based upon, arising 

out of or relating to” the Manville insurance policies. The settlement 

agreement and reorganization plan were approved by the Bankruptcy 

Court (1986 Orders) and were affirmed by the District Court and the 

Second Circuit. Over a decade later plaintiffs began filing asbestos

actions against Travelers in state courts (Direct Actions), often seeking to recover from Travelers not for Manville’s wrongdoing but for 

Travelers’ own alleged violations of state consumer-protection statutes or of common law duties. Invoking the 1986 Orders, Travelers 

asked the Bankruptcy Court to enjoin 26 Direct Actions. Ultimately,

a settlement was reached, in which Travelers agreed to make payments to compensate the Direct Action claimants, contingent on the 

court’s order clarifying that the Direct Actions were, and remained,

prohibited by the 1986 Orders. The court made extensive factual 

findings, uncontested here, concluding that Travelers derived its 

knowledge of asbestos from its insurance relationship with Manville

and that the Direct Actions are based on acts or omissions by Travel-

—————— 

*Together with No. 08–307, Common Law Settlement Counsel v. Bailey et al., also on certiorari to the same court. 
2 TRAVELERS INDEMNITY CO. v. BAILEY 

Syllabus 

ers arising from or related to the insurance policies. It then approved

the settlement and entered an order (Clarifying Order), which provided that the 1986 Orders barred the pending Direct Actions and

various other claims. Objectors to the settlement (respondents here) 

appealed. The District Court affirmed, but the Second Circuit reversed. Agreeing that the Bankruptcy Court had jurisdiction to interpret and enforce the 1986 Orders, the Circuit nevertheless held

that the Bankruptcy Court lacked jurisdiction to enjoin the Direct Actions because those actions sought not to recover based on Manville’s

conduct, but to recover directly from Travelers for its own conduct. 

Held: The terms of the injunction bar the Direct Actions against Travelers, and the finality of the Bankruptcy Court’s 1986 Orders generally stands in the way of challenging their enforceability. Pp. 9–18.

(a) The Direct Actions are “Policy Claims” enjoined as against

Travelers by the 1986 Orders, which covered, inter alia, “claims” and 

“allegations” “relating to” Travelers’ insurance coverage of Manville. 

In a statute, “[t]he phrase ‘in relation to’ is expansive,” Smith v. 

United States, 508 U. S. 223, 237, and so is its reach here. While it 

would be possible to suggest that a “claim” only relates to Travelers’

insurance coverage if it seeks recovery based upon Travelers’ specific

contractual obligation to Manville, “allegations” is not amenable to

such a narrow construction and clearly reaches factual assertions 

that relate in a more comprehensive way to Travelers’ dealings with

Manville. The Bankruptcy Court’s detailed factual findings place the

Direct Actions within the terms of the 1986 Orders. Contrary to respondents’ argument, the 1986 Orders contain no language limiting

“Policy Claims” to claims derivative of Manville’s liability. Even if, 

before the entry of the 1986 Orders, Travelers understood the proposed injunction to bar only such derivative claims, where a court order’s plain terms unambiguously apply, as they do here, they are entitled to their effect. If it is black-letter law that an unambiguous

private contract’s terms must be enforced irrespective of the parties’ 

subjective intent, it is also clear that a court, such as the Bankruptcy 

Court here, should enforce a court order, a public governmental act,

according to its unambiguous terms. Pp. 10–13. 

(b) Because the 1986 Orders became final on direct review over two 

decades ago, whether the Bankruptcy Court had jurisdiction and authority to enter the injunction in 1986 was not properly before the 

Second Circuit in 2008 and is not properly before this Court. The 

Bankruptcy Court plainly had jurisdiction to interpret and enforce its 

own prior orders, see Local Loan Co. v. Hunt, 292 U. S. 234, 239, and 

it explicitly retained jurisdiction to enforce its injunctions when it issued the 1986 Orders. The Second Circuit erred in holding the 1986 

Orders unenforceable according to their terms on the ground that the 
Cite as: 557 U. S. ____ (2009) 3 

Syllabus 

Bankruptcy Court had exceeded its jurisdiction in 1986. On direct 

appeal of the 1986 Orders, any objector was free to argue that the 

Bankruptcy Court had exceeded its jurisdiction, and the District 

Court or Court of Appeals could have raised such concerns sua 

sponte. But once those orders became final on direct review, they became res judicata to the “ ‘parties and those in privity with them.’ ” 

Nevada v. United States, 463 U. S. 110, 130. So long as respondents

or those in privity with them were parties to Manville’s bankruptcy 

proceeding, and were given a fair chance to challenge the Bankruptcy 

Court’s subject-matter jurisdiction, they cannot challenge it now by 

resisting enforcement of the 1986 Orders. The Second Circuit’s willingness to entertain this collateral attack cannot be squared with res

judicata and the practical necessity served by that rule. Almost a 

quarter-century after the 1986 Orders were entered, the time to

prune them is over. Pp. 13–16.

(c) This holding in narrow. The Court neither resolves whether a 

bankruptcy court, in 1986 or today, could properly enjoin claims

against nondebtor insurers that are not derivative of the debtor’s 

wrongdoing, nor decides whether any particular respondent is bound 

by the 1986 Orders, which is a question that the Second Circuit did

not consider. Pp. 17–18. 

517 F. 3d 52, reversed and remanded. 

SOUTER, J., delivered the opinion of the Court, in which ROBERTS, 

C. J., and SCALIA, KENNEDY, THOMAS, BREYER, and ALITO, JJ., joined. 

STEVENS, J., filed a dissenting opinion, in which GINSBURG, J., joined. 
_________________ 

_________________ 

Cite as: 557 U. S. ____ (2009) 1 

Opinion of the Court 

NOTICE: This opinion is subject to formal revision before publication in the

preliminary print of the United States Reports. Readers are requested to

notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order

that corrections may be made before the preliminary print goes to press. 

SUPREME COURT OF THE UNITED STATES 

Nos. 08–295 and 08–307 

THE TRAVELERS INDEMNITY COMPANY, ET AL., 

PETITIONERS 

08–295 v. 

PEARLIE BAILEY ET AL. 

COMMON LAW SETTLEMENT COUNSEL, 

PETITIONER 

08–307 v. 

PEARLIE BAILEY ET AL. 

ON WRITS OF CERTIORARI TO THE UNITED STATES COURT OF 

APPEALS FOR THE SECOND CIRCUIT 

[June 18, 2009] 

JUSTICE SOUTER delivered the opinion of the Court. 

As an element of the 1986 reorganization plan of the 

Johns-Manville Corporation (Manville), the United States

Bankruptcy Court for the Southern District of New York

enjoined certain lawsuits against Manville’s insurers, 

including The Travelers Indemnity Company and its 

affiliates (Travelers). The question is whether the injunction bars state-law actions against Travelers based on 

allegations either of its own wrongdoing while acting as 

Manville’s insurer or of its misuse of information obtained 

from Manville as its insurer. We hold that the terms of 

the injunction bar the actions and that the finality of the 

Bankruptcy Court’s orders following the conclusion of 

direct review generally stands in the way of challenging 
2 TRAVELERS INDEMNITY CO. v. BAILEY 

Opinion of the Court 

the enforceability of the injunction. 

I 

From the 1920s to the 1970s, Manville was, by most

accounts, the largest supplier of raw asbestos and manufacturer of asbestos-containing products in the United

States, In re Johns-Manville Corp., 517 F. 3d 52, 55–56 

(CA2 2008), and for much of that time Travelers was

Manville’s primary liability insurer. In re Johns-Manville 

Corp., No. 82 B 11656 etc. (Bkrtcy. Ct. SDNY 2004), App.

to Pet. for Cert. in No. 08–295, pp. 111a–112a (hereinafter 

Bkrtcy. Ct. Op.). As studies began to link asbestos exposure to respiratory disease and thousands of lawsuits were

filed against Manville, Travelers, as the insurer, worked

closely with Manville to learn what its insured knew and 

to assess the dangers of asbestos exposure; it evaluated 

Manville’s potential liability and defenses, and paid Manville’s litigation costs. Id., at 114a–117a, 121a–122a. In 

1982, the prospect of overwhelming liability led Manville 

to file for bankruptcy protection in the Southern District of 

New York. 

It thus became incumbent on the Bankruptcy Court to

devise “a plan of reorganization for [Manville] which 

would provide for payment to holders of present or known 

asbestos health related claims . . . and [to] those persons

who had not yet manifested an injury but who would 

manifest symptoms of asbestos-related illnesses at some

future time.” In re Johns-Manville Corp., 97 B. R. 174, 

176 (Bkrtcy. Ct. SDNY 1989). The ensuing reorganization

plan created the Manville Personal Injury Settlement 

Trust (Trust) to pay all asbestos claims against Manville, 

which would be channeled to the Trust. See Kane v. 

Johns-Manville Corp., 843 F. 2d 636, 640–641 (CA2 1988); 

In re Johns-Manville Corp., 340 B. R. 49, 54 (SDNY 2006). 

The Trust has since paid out more than $3.2 billion to over 

600,000 claimants. Bkrtcy. Ct. Op. 136a–137a. 
Cite as: 557 U. S. ____ (2009) 3 

Opinion of the Court 

In the period leading up to the reorganization, Manville 

and its insurers litigated over the scope and limits of 

liability coverage, and Travelers faced suits by third parties, such as Manville factory workers and vendors of 

Manville products, seeking compensation under the insurance policies. There was also litigation among the insurers themselves, who brought various indemnity claims,

contribution claims, and cross-claims. Id., at 132a–134a. 

In a settlement described as the “cornerstone” of the Manville reorganization, the insurers agreed to provide most of 

the initial corpus of the Trust, with a payment of $770

million to the bankruptcy estate, $80 million of it from

Travelers. MacArthur Co. v. Johns-Manville Corp., 837 

F. 2d 89, 90 (CA2 1988); Bkrtcy. Ct. Op. 134a; In re JohnsManville Corp., 68 B. R. 618, 621 (Bkrtcy. Ct. SDNY 

1986).

There would have been no such payment without the

injunction at the heart of the present dispute. The December 18, 1986, order of the Bankruptcy Court approving

the insurance settlement agreements (Insurance Settlement Order) provides that, upon the insurers’ payment of

the settlement funds to the Trust, “all Persons are permanently restrained and enjoined from commencing and/or 

continuing any suit, arbitration or other proceeding of any

type or nature for Policy Claims against any or all members of the Settling Insurer Group.” App. to Pet. for Cert. 

in No. 08–295, at 446a. The Insurance Settlement Order 

goes on to provide that the insurers are “released from any 

and all Policy Claims,” which are to be channeled to the 

Trust. Ibid. The order defines “Policy Claims” as “any 

and all claims, demands, allegations, duties, liabilities and 

obligations (whether or not presently known) which have

been, or could have been, or might be, asserted by any 

Person against . . . any or all members of the Settling 

Insurer Group based upon, arising out of or relating to any

or all of the Policies.” Id., at 439a. The insurers were 
4 TRAVELERS INDEMNITY CO. v. BAILEY 

Opinion of the Court 

entitled “to terminate the settlements if the injunctive

orders [were] not issued or if they [were] set aside on

appeal.” MacArthur, supra, at 90. 

The Insurance Settlement Order was incorporated by

reference in the Bankruptcy Court’s December 22, 1986, 

order confirming Manville’s Second Amended and Restated Plan of Reorganization (Confirmation Order).1 App. 

to Pet. for Cert. in No. 08–295, at 271a–272a. Both the 

Confirmation Order and the Insurance Settlement Order 

(collectively, 1986 Orders) were affirmed by the District 

Court, see In re Johns-Manville Corp., 78 B. R. 407 (SDNY 

1987), and the Court of Appeals for the Second Circuit, see 

MacArthur, supra; Kane, supra. 

Nonetheless, over a decade later plaintiffs started filing 

asbestos actions against Travelers in various state courts,

cases that have been spoken of in this litigation as Direct 

Actions. They are of two sorts. The Statutory Direct 

Actions are brought under state consumer-protection

statutes, and allege that Travelers conspired with other 

insurers and with asbestos manufacturers to hide the 

dangers of asbestos and to raise a fraudulent “state of the 

art” (or “no duty to warn”) defense to personal injury 

claims. Bkrtcy. Ct. Op. 140a–143a. The Common Law 

Direct Actions claim that Travelers violated common law 

duties by failing to warn the public about the dangers of

asbestos or by acting to keep its knowledge of those dangers from the public. Id., at 143a–147a. It is undisputed 

that many of the plaintiffs seek to recover from Travelers, 

not indirectly for Manville’s wrongdoing, but for Travelers’ 

own alleged violations of state law. See 517 F. 3d, at 63.2 

—————— 

1The Confirmation Order itself contains an additional injunction 

barring certain claims against the settling insurance companies. 

Bkrtcy. Ct. Op. 286a–288a. That injunction does not bear on our

decision, and we do not consider it. 2A true “direct action” suit is “[a] lawsuit by a person claiming

against an insured but suing the insurer directly instead of pursuing 
Cite as: 557 U. S. ____ (2009) 5 

Opinion of the Court 

In 2002, Travelers invoked the terms of the 1986 Orders 

in moving the Bankruptcy Court to enjoin 26 Direct Actions pending in state courts. Id., at 58. The court issued 

a temporary restraining order, repeatedly extended, and 

referred the parties to mediation, which led to settlements

between Travelers and three sets of plaintiffs in both 

Statutory and Common Law Direct Actions. Bkrtcy. Ct. 

Op. 103a–104a. Under the settlement terms Travelers 

would pay more than $400 million to settlement funds to

compensate Direct Action claimants, contingent upon the 

entry of an order by the Bankruptcy Court clarifying that

the Direct Actions were, and remained, prohibited by the 

1986 Orders. Id., at 150a–152a. The settlement requires

claimants seeking payment from the settlement funds to 

grant Travelers a release from further liability, separate

and apart from Travelers’ protection under the 1986 Orders. Id., at 151a–152a. 

After notice of the settlement was given to potential

claimants, the Bankruptcy Court (the same judge who had 

issued the 1986 Orders) held an evidentiary hearing and

made extensive factual findings that are not challenged 

here. The court determined that “Travelers[’] knowledge 

of the hazards of asbestos was derived from its nearly 

three decade insurance relationship with Manville and the 

performance by Travelers of its obligations under the 

Policies, including through the underwriting, loss control 

activities, defense obligations and generally through its

lengthy and confidential insurance relationship under the 

—————— 

compensation indirectly through the insured.” Black’s Law Dictionary 

491 (8th ed. 2004). Because many of the suits at issue seek to hold

Travelers liable for independent wrongdoing rather than for a legal

wrong by Manville, they are not direct actions in the terms of strict 

usage. Nonetheless, because the suits are referred to as “direct actions” 

in the decisions of the Bankruptcy Court, the District Court, and the 

Court of Appeals, we call them that as well, in the interest of simplicity. 

See 517 F. 3d, at 55, n. 4. 
6 TRAVELERS INDEMNITY CO. v. BAILEY 

Opinion of the Court 

policies.” Id., at 128a–129a. In sum, the Bankruptcy

Court found that “Travelers learned virtually everything it

knew about asbestos from its relationship with Manville.” 

Id., at 131a. 

As for the Direct Actions, the court saw “[t]he gravamen

of the Statutory Direct Action Lawsuits” as “center[ing] on

Travelers[’] defense of Manville in asbestos-related 

claims.” Id., at 142a. The court read the “alleged factual

predicate” of the Common Law Direct Actions as being 

“essentially identical to the statutory actions: Travelers

. . . influence[d] Manville’s purported failure to disclose

knowledge about asbestos hazards; Travelers defended 

Manville; Travelers advanced the state of the art defense; 

and Travelers coordinated Manville’s national defense 

effort.” Id., at 147a (citations omitted). The court understood “the direct action claims against Travelers [to be] 

inextricably intertwined with Travelers[’] long relationship as Manville’s insurer,” id., at 169a, and found that 

“[a]fter the Court preliminarily enjoined prosecution of 

Direct Action Claims against Travelers pending final 

ruling on the merits, certain plaintiffs’ lawyers violated

the letter and the spirit of this Court’s rulings by simply

deleting the term ‘Manville’ from their complaints—but 

leaving the substance unchanged,” id., at 147a. 

Hence, the court’s conclusion that “[t]he evidence in this

proceeding establishes that the gravamen of Direct Action

Claims were acts or omissions by Travelers arising from or

relating to Travelers[’] insurance relationship with Manville.” Id., at 173a. Finding that the “claims against 

Travelers based on such actions or omissions necessarily

‘arise out of’ and [are] ‘related to’” the insurance policies, 

ibid., which compelled Travelers to defend Manville 

against asbestos-related claims, id., at 173a–176a, the 

Bankruptcy Court held that the Direct Actions “are—and

always have been—permanently barred” by the 1986

Orders, id., at 170a. 
Cite as: 557 U. S. ____ (2009) 7 

Opinion of the Court 

The settlement was accordingly approved and an order 

dated August 17, 2004 (Clarifying Order), was entered, 

providing that the 1986 Orders barred the pending Direct

Actions and “[t]he commencement or prosecution of all 

actions and proceedings against Travelers that directly or 

indirectly are based upon, arise out of or relate to Travelers[’] insurance relationship with Manville or Travelers[’] 

knowledge or alleged knowledge concerning the hazards of 

asbestos,” including claims for contribution or indemnification. Id., at 95a. The Clarifying Order does not, however, block “the commencement and prosecution of claims

against Travelers by policyholders other than Manville . . . 

for insurance proceeds or other obligations arising under 

any policy of insurance provided by Travelers to a policyholder other than Manville.” Id., at 96a. The Clarifying 

Order also separately disclaims that it enjoins bringing 

“claims arising from contractual obligations by Travelers to policyholders other than Manville, as long as

Travelers[’] alleged liability or the proof required to 

establish Travelers[’] alleged liability is unrelated to 

any knowledge Travelers gained from its insurance 

relationship with Manville or acts, errors, omissions

or evidence related to Travelers[’] insurance relationship with Manville.” Ibid. 

Some individual claimants and Chubb Indemnity Insurance Company (Chubb), respondents before this Court,

objected to the settlement and subsequently appealed.3 So 

far as it matters here, the District Court affirmed, but the 

Court of Appeals for the Second Circuit reversed. In 

presenting the case to the Second Circuit the objectors

argued that the Direct Actions fall outside the scope of the 

—————— 

3Chubb is a codefendant with Travelers in certain Common Law 

Direct Actions, and the Clarifying Order prevents it from bringing

contribution and indemnity claims against Travelers under certain 

circumstances. See Brief for Respondent Chubb 16. 
8 TRAVELERS INDEMNITY CO. v. BAILEY 

Opinion of the Court 

1986 Orders and that the Clarifying Order erroneously 

expands those orders to bar actions beyond the Bankruptcy Court’s subject-matter jurisdiction and statutory

authority. Travelers and the settling claimants responded

that the Clarifying Order is consistent with the terms of 

the 1986 Orders, that this reading of the 1986 Orders does 

not generate any jurisdictional or other statutory concerns, and that the Second Circuit’s prior rejection of a 

challenge to the Insurance Settlement Order in MacArthur, 837 F. 2d 89, is controlling. 

In its opinion explaining the judgment under review

here, the Second Circuit recognized that “[i]t is undisputed

that the bankruptcy court had continuing jurisdiction to 

interpret and enforce its own 1986 orders,” and that “there 

is no doubt that the bankruptcy court had jurisdiction to

clarify its prior orders.” 517 F. 3d, at 60–61. It also had 

“little doubt that, in a literal sense, the instant claims 

against Travelers ‘arise out of’ its provision of insurance

coverage to Manville,” id., at 67, and the court emphasized 

that “[t]he bankruptcy court’s extensive factual findings

regarding Manville’s all-encompassing presence in the 

asbestos industry and its extensive relationship with

Travelers support this notion” that the subjects of the

Clarifying Order fall within the scope of the 1986 Orders, 

ibid. The Circuit nevertheless held that the Bankruptcy 

Court could not, in enforcing the 1986 Orders, “enjoin

claims over which it had no jurisdiction,” id., at 61, and 

that “[t]he ancillary jurisdiction courts possess to enforce

their own orders is itself limited by the jurisdictional 

limits of the order sought to be enforced,” id., at 65, n. 22 

(internal quotation marks omitted). See also id., at 65 

(“The fact that our case involves a clarification of the 

bankruptcy court’s prior order does not alter the jurisdictional predicate necessary to enjoin third-party non-debtor

claims”).

The Court of Appeals found that “the jurisdictional 
Cite as: 557 U. S. ____ (2009) 9 

Opinion of the Court 

analysis by the lower courts falls short,” id., at 62, in 

failing to recognize the significance of the fact that the

Direct Actions “do not seek to collect on the basis of Manville’s conduct,” but rather “seek to recover directly from

Travelers, a non-debtor insurer, for its own alleged misconduct,” id., at 63. The Court of Appeals held that the

Bankruptcy Court mistook its jurisdiction when it enjoined “claims brought against a third-party non-debtor

solely on the basis of that third-party’s financial contribution to a debtor’s estate,” because “a bankruptcy court only

has jurisdiction to enjoin third-party non-debtor claims 

that directly affect the res of the bankruptcy estate.” Id., 

at 66. 

In reaching this result, the court explained that its prior

decision in MacArthur was not controlling, as there a 

Manville asbestos distributor had challenged the authority 

of the Bankruptcy Court to bar it from collecting out of

Manville’s own insurance coverage. 517 F. 3d, at 62. 

Here, by contrast, “Travelers candidly admits that both

the statutory and common law claims seek damages from 

Travelers that are unrelated to the policy proceeds.” Id., 

at 63. The Court of Appeals also considered the 1994

enactment of 11 U. S. C. §524(g), which provides explicit

statutory authority for a bankruptcy court to order the 

channeling of claims against a debtor’s insurers to the

bankruptcy estate, but the court understood §524(g) to be

“limited to situations where a third party has derivative

liability for the claims against the debtor” and “was not 

intended to reach non-derivative claims.” 517 F. 3d, at 68 

(ellipsis and internal quotation marks omitted). 

We granted certiorari, 555 U. S. ___ (2009) and now 

reverse. 

II 

The Bankruptcy Court correctly understood that the

Direct Actions fall within the scope of the 1986 Orders, as 
10 TRAVELERS INDEMNITY CO. v. BAILEY 

Opinion of the Court 

suits of this sort always have. The Court of Appeals, 

however, believed it was free to look beyond the terms of

the 1986 Orders and so treated the action as one “concern[ing] the outer reaches of a bankruptcy court’s jurisdiction.” 517 F. 3d, at 55. This, we think, was error. If 

this were a direct review of the 1986 Orders, the Court of 

Appeals would indeed have been duty bound to consider

whether the Bankruptcy Court had acted beyond its subject-matter jurisdiction. See Arbaugh v. Y & H Corp., 546 

U. S. 500, 514 (2006); Mansfield, C. & L. M. R. Co. v. 

Swan, 111 U. S. 379, 382 (1884). But the 1986 Orders 

became final on direct review over two decades ago, and

Travelers’ response to the Circuit’s jurisdictional ruling is

correct: whether the Bankruptcy Court had jurisdiction

and authority to enter the injunction in 1986 was not

properly before the Court of Appeals in 2008 and is not 

properly before us. 

A 

We begin at our point of agreement with the Second

Circuit, that the Direct Actions are “Policy Claims” enjoined as against Travelers by the language of the 1986 

Orders, which covered “claims, demands, allegations, 

duties, liabilities and obligations” against Travelers, 

known or unknown at the time, “based upon, arising out of 

or relating to” Travelers’ insurance coverage of Manville.

App. to Pet. for Cert. in No. 08–295, at 439a. In a statute, 

“[t]he phrase ‘in relation to’ is expansive,” Smith v. United 

States, 508 U. S. 223, 237 (1993), and so is its reach here, 

where “Policy Claims” covers not only “claims,” but even 

“allegations” relating to the insurance coverage. Although

it would be possible (albeit quite a stretch) to suggest that

a “claim” only relates to Travelers’ insurance coverage if it

seeks recovery based upon Travelers’ specific contractual 

obligation to Manville, “allegations” is not even remotely

amenable to such a narrow construction and clearly 
Cite as: 557 U. S. ____ (2009) 11 

Opinion of the Court 

reaches factual assertions that relate in a more comprehensive way to Travelers’ dealings with Manville. 

The Bankruptcy Court’s uncontested factual findings 

drive the point home. In substance, the Bankruptcy Court

found that the Direct Actions seek to recover against

Travelers either for supposed wrongdoing in its capacity

as Manville’s insurer or for improper use of information 

that Travelers obtained from Manville as its insurer. 

These actions so clearly involve “claims” (and, all the more

so, “allegations”) “based upon, arising out of or relating to” 

Travelers’ insurance coverage of Manville, that we have no 

need here to stake out the ultimate bounds of the injunction. There is, of course, a cutoff at some point, where the 

connection between the insurer’s action complained of and

the insurance coverage would be thin to the point of absurd. See California Div. of Labor Standards Enforcement 

v. Dillingham Constr., N. A., Inc., 519 U. S. 316, 335 

(1997) (SCALIA, J., concurring) (“[A]pplying the ‘relate to’ 

provision according to its terms was a project doomed to

failure, since, as many a curbstone philosopher has observed, everything is related to everything else”); New 

York State Conference of Blue Cross & Blue Shield Plans 

v. Travelers Ins. Co., 514 U. S. 645, 655 (1995). But the 

detailed findings of the Bankruptcy Court place the Direct

Actions within the terms of the 1986 Orders without 

pushing the limits.

Respondents argue that this is just revisionism perpetrated by the Clarifying Order, which they say improperly

expanded the scope of the 1986 Orders to enjoin the Direct 

Actions. Their position appears to be that the 1986 Orders 

only bar actions against insurers seeking to recover derivatively for Manville’s wrongdoing, but not actions to

recover for Travelers’ own misconduct, no matter what its 

relationship to Travelers’ coverage of Manville. But this 

simply is not what the 1986 Orders say. The definition of 

“Policy Claims” contains nothing limiting it to derivative 
12 TRAVELERS INDEMNITY CO. v. BAILEY 

Opinion of the Court 

actions, and there is language in the 1986 Orders directly 

to the contrary: The 1986 Orders not only enjoin bringing

expansively defined “Policy Claims” against the settling 

insurers, but they go on to provide that the injunction has

no application to a claim previously brought against a

settling insurer “seeking any and all damages (other than

or in addition to policy proceeds) for bad faith or other 

insurer misconduct alleged in connection with the handling or disposition of claims.” App. to Pet. for Cert. in No. 

08–295, at 446a. There is no doubt about the implication,

that this same sort of claim brought after the 1986 Orders

become final will be barred. There would have been no 

need for this exception if “Policy Claims” were limited to 

claims against Travelers for Manville’s wrongdoing.

Respondents seek further refuge in evidence that before 

entry of the 1986 Orders some parties to the Manville 

bankruptcy (including Travelers) understood the proposed

injunction to bar only claims derivative of Manville’s

liability. They may well be right about that: we are in no 

position to engage in factfinding on this point, but there

certainly are statements in the record that seem to support respondents’ contention. See App. for Respondent 

Chubb 1a–3a, 5a, 13a–14a. But be that as it may, where

the plain terms of a court order unambiguously apply, as

they do here, they are entitled to their effect. See, e.g., 

Negrón-Almeda v. Santiago, 528 F. 3d 15, 23 (CA1 2008)

(“[A] court must carry out and enforce an order that is

clear and unambiguous on its face”); United States v. 

Spallone, 399 F. 3d 415, 421 (CA2 2005) (“[I]f a judgment

is clear and unambiguous, a court must adopt, and give

effect to, the plain meaning of the judgment” (internal 

quotation marks omitted)). If it is black-letter law that 

the terms of an unambiguous private contract must be 

enforced irrespective of the parties’ subjective intent, see 

11 R. Lord, Williston on Contracts §30:4 (4th ed. 1999), it 

is all the clearer that a court should enforce a court order, 
Cite as: 557 U. S. ____ (2009) 13 

Opinion of the Court 

a public governmental act, according to its unambiguous 

terms.4 This is all the Bankruptcy Court did. 

B 

Given the Clarifying Order’s correct reading of the 1986

Orders, the only question left is whether the Bankruptcy

Court had subject-matter jurisdiction to enter the Clarifying Order. The answer here is easy: as the Second Circuit

recognized, and respondents do not dispute, the Bankruptcy Court plainly had jurisdiction to interpret and

enforce its own prior orders. See Local Loan Co. v. Hunt, 

292 U. S. 234, 239 (1934). What is more, when the Bankruptcy Court issued the 1986 Orders it explicitly retained 

jurisdiction to enforce its injunctions. See App. to Pet. for 

Cert. in No. 08–295, at 284a–286a. 

The Court of Appeals, however, went on to a different

jurisdictional enquiry. It held that the 1986 Orders could 

not be enforced according to their terms because, as the 

panel saw it, the Bankruptcy Court had exceeded its

jurisdiction when it issued the orders in 1986. We think, 

though, that it was error for the Court of Appeals to reevaluate the Bankruptcy Court’s exercise of jurisdiction in 

—————— 

4Even if we found the 1986 Orders to be ambiguous as applied to the

Direct Actions, and even if we concluded that it would be proper to look 

to the parties’ communications to resolve that ambiguity, it is far from

clear that respondents would be entitled to upset the Bankruptcy 

Court’s interpretation of the 1986 Orders. Numerous Courts of Appeals 

have held that a bankruptcy court’s interpretation of its own confirmation order is entitled to substantial deference. See In re Shenango 

Group Inc., 501 F. 3d 338, 346 (CA3 2007); In re Dow Corning Corp., 

456 F. 3d 668, 675 (CA6 2006); In re Optical Technologies, Inc., 425 

F. 3d 1294, 1300 (CA11 2005); In re Dial Business Forms, Inc., 341 

F. 3d 738, 744 (CA8 2003); In re National Gypsum Co., 219 F. 3d 478, 

484 (CA5 2000); In re Casse, 198 F. 3d 327, 333 (CA2 1999); In re 

Tomlin, 105 F. 3d 933, 941 (CA4 1997); Monarch Life Ins. Co. v. Ropes 

& Gray, 65 F. 3d 973, 983 (CA1 1995); In re Weber, 25 F. 3d 413, 416 

(CA7 1994). Because the 1986 Orders clearly cover the Direct Actions,

we need not determine the proper standard of review. 
14 TRAVELERS INDEMNITY CO. v. BAILEY 

Opinion of the Court 

1986. 

On direct appeal of the 1986 Orders, anyone who objected was free to argue that the Bankruptcy Court had

exceeded its jurisdiction, and the District Court or Court

of Appeals could have raised such concerns sua sponte. In 

fact, one objector argued just that. In MacArthur, a distributor of Manville asbestos claimed to be a coinsured 

under certain Manville insurance policies and argued that 

the 1986 Orders exceeded the Bankruptcy Court’s jurisdiction by preventing the distributor from recovering under

the policies; the Second Circuit disagreed, concluding that

the Bankruptcy Court had not stepped outside its jurisdiction or statutory authority.5 See 837 F. 2d, at 91–94. But 

once the 1986 Orders became final on direct review 

(whether or not proper exercises of bankruptcy court 

jurisdiction and power), they became res judicata to the

“‘parties and those in privity with them, not only as to 

every matter which was offered and received to sustain or 

defeat the claim or demand, but as to any other admissible 

matter which might have been offered for that purpose.’” 

Nevada v. United States, 463 U. S. 110, 130 (1983) (quoting Cromwell v. County of Sac, 94 U. S. 351, 352 (1877)).

Those orders are not any the less preclusive because the

attack is on the Bankruptcy Court’s conformity with its 

subject-matter jurisdiction, for “[e]ven subject-matter 

jurisdiction . . . may not be attacked collaterally.” Kon­

—————— 

5We agree with the Court of Appeals that MacArthur only resolved 

the narrow question whether the Bankruptcy Court could enjoin 

derivative claims against the insurers and did not address whether the 

1986 Orders, in their entirety, were proper. We note MacArthur merely

to illustrate the obvious: the 1986 Orders were subject to challenge, on 

jurisdictional grounds or otherwise, on direct review. The dissent 

suggests that MacArthur limited the scope of the 1986 Orders to 

derivative claims, see post, at 1, 7–9, but it did not. The question

whether the Bankruptcy Court had enjoined or could properly enjoin 

nonderivative claims was not at issue in MacArthur and the court did 

not answer it. 
Cite as: 557 U. S. ____ (2009) 15 

Opinion of the Court 

trick v. Ryan, 540 U. S. 443, 455, n. 9 (2004). See also 

Chicot County Drainage Dist. v. Baxter State Bank, 308 

U. S. 371, 376 (1940) (“[Federal courts] are courts with

authority, when parties are brought before them in accordance with the requirements of due process, to determine

whether or not they have jurisdiction to entertain the 

cause and for this purpose to construe and apply the statute under which they are asked to act. Their determinations of such questions, while open to direct review, may

not be assailed collaterally”). So long as respondents or

those in privity with them were parties to the Manville 

bankruptcy proceeding, and were given a fair chance to

challenge the Bankruptcy Court’s subject-matter jurisdiction, they cannot challenge it now by resisting enforcement of the 1986 Orders. See Insurance Corp. of Ireland 

v. Compagnie des Bauxites de Guinee, 456 U. S. 694, 702, 

n. 9 (1982) (“A party that has had an opportunity to litigate the question of subject-matter jurisdiction may not 

. . . reopen that question in a collateral attack upon an

adverse judgment”); Chicot County, supra, at 375 (“[T]hese

bondholders, having the opportunity to raise the question

of invalidity, were not the less bound by the decree because they failed to raise it”).6 

—————— 

6The rule is not absolute, and we have recognized rare situations in

which subject-matter jurisdiction is subject to collateral attack. See, 

e.g., United States v. United States Fidelity & Guaranty Co., 309 U. S. 

506, 514 (1940) (a collateral attack on subject-matter jurisdiction is

permissible “where the issue is the waiver of [sovereign] immunity”); 

Kalb v. Feuerstein, 308 U. S. 433, 439–440, 444 (1940) (where debtor’s 

petition for relief was pending in bankruptcy court and federal statute 

affirmatively divested other courts of jurisdiction to continue foreclosure proceedings, state-court foreclosure judgment was subject to

collateral attack). More broadly, the Restatement (Second) of Judgments §12, p. 115 (1980), describes three exceptional circumstances in

which a collateral attack on subject-matter jurisdiction is permitted: 

“(1) The subject matter of the action was so plainly beyond the court’s

jurisdiction that its entertaining the action was a manifest abuse of 
16 TRAVELERS INDEMNITY CO. v. BAILEY 

Opinion of the Court 

The willingness of the Court of Appeals to entertain this

sort of collateral attack cannot be squared with res judicata and the practical necessity served by that rule. “It is 

just as important that there should be a place to end as

that there should be a place to begin litigation,” Stoll v. 

Gottlieb, 305 U. S. 165, 172 (1938), and the need for finality forbids a court called upon to enforce a final order to 

“tunnel back . . . for the purpose of reassessing prior jurisdiction de novo,” In re Optical Technologies, Inc., 425 F. 3d 

1294, 1308 (CA11 2005). If the law were otherwise, and 

“courts could evaluate the jurisdiction that they may or

may not have had to issue a final judgment, the rules of 

res judicata . . . would be entirely short-circuited.” Id., at 

1307; see Willy v. Coastal Corp., 503 U. S. 131, 137 (1992)

(“[T]he practical concern with providing an end to litigation justifies a rule preventing collateral attack on subjectmatter jurisdiction”). Almost a quarter-century after the 

1986 Orders were entered, the time to prune them is over.7 

—————— 

authority; or

“(2) Allowing the judgment to stand would substantially infringe the

authority of another tribunal or agency of government; or

“(3) The judgment was rendered by a court lacking capability to make

an adequately informed determination of a question concerning its own 

jurisdiction and as a matter of procedural fairness the party seeking to

avoid the judgment should have opportunity belatedly to attack the 

court’s subject matter jurisdiction.” 

This is no occasion to address whether we adopt all of these exceptions.

Respondents do not claim any of them, and we do not see how any

would apply here. This is not a situation, for example, in which a 

bankruptcy court decided to conduct a criminal trial, or to resolve a

custody dispute, matters “so plainly beyond the court’s jurisdiction” 

that a different result might be called for. 7Respondents point out that it is Travelers, not they, who moved the 

Bankruptcy Court to enforce the 1986 Orders. But who began the 

present proceedings has no bearing on the application of res judicata; to

the extent respondents argue that the 1986 Orders should not be 

enforced according to their terms because of a jurisdictional flaw in

1986, this argument is an impermissible collateral attack. And to the 

extent respondents disclaim any initial intent to mount such an attack, 
Cite as: 557 U. S. ____ (2009) 17 

Opinion of the Court 

III 

Our holding is narrow. We do not resolve whether a 

bankruptcy court, in 1986 or today, could properly enjoin

claims against nondebtor insurers that are not derivative

of the debtor’s wrongdoing. As the Court of Appeals noted,

in 1994 Congress explicitly authorized bankruptcy courts, 

in some circumstances, to enjoin actions against a nondebtor “alleged to be directly or indirectly liable for the 

conduct of, claims against, or demands on the debtor to the 

extent such alleged liability . . . arises by reason of . . . the 

third party’s provision of insurance to the debtor or a 

related party,” and to channel those claims to a trust for 

payments to asbestos claimants. 11 U. S. C. §524

(g)(4)(A)(ii). On direct review today, a channeling injunction of the sort issued by the Bankruptcy Court in 1986 

would have to be measured against the requirements of 

§524 (to begin with, at least). But owing to the posture of

this litigation, we do not address the scope of an injunction 

authorized by that section.8 

Nor do we decide whether any particular respondent is

bound by the 1986 Orders. We have assumed that respondents are bound, but the Court of Appeals did not 

consider this question. Chubb, in fact, relying on Amchem 

Products, Inc. v. Windsor, 521 U. S. 591 (1997), and Ortiz 

v. Fibreboard Corp., 527 U. S. 815 (1999), has maintained 

that it was not given constitutionally sufficient notice of 

the 1986 Orders, so that due process absolves it from

following them, whatever their scope. See 340 B. R., at 68. 

The District Court rejected this argument, id., at 68–69, 

but the Court of Appeals did not reach it, 517 F. 3d, at 60, 

—————— 

this too is irrelevant, since the decision of the Court of Appeals is what 

we review and find at odds with finality. 8Section 524(h) provides that under some circumstances §524(g) operates retroactively to validate an injunction. We need not decide 

whether those circumstances are present here. 
18 TRAVELERS INDEMNITY CO. v. BAILEY 

Opinion of the Court 

n. 17. On remand, the Court of Appeals can take up this

objection and any others that respondents have preserved. 

IV 

We reverse the judgment of the Court of Appeals and 

remand for further proceedings consistent with this 

opinion. 

It is so ordered. 
_________________ 

_________________ 

Cite as: 557 U. S. ____ (2009) 1 

STEVENS, J., dissenting 

SUPREME COURT OF THE UNITED STATES 

Nos. 08–295 and 08–307 

THE TRAVELERS INDEMNITY COMPANY, ET AL., 

PETITIONERS 

08–295 v. 

PEARLIE BAILEY ET AL. 

COMMON LAW SETTLEMENT COUNSEL, 

PETITIONER 

08–307 v. 

PEARLIE BAILEY ET AL. 

ON WRITS OF CERTIORARI TO THE UNITED STATES COURT OF 

APPEALS FOR THE SECOND CIRCUIT 

[June 18, 2009] 

JUSTICE STEVENS, with whom JUSTICE GINSBURG joins,

dissenting. 

The Court holds that the plain terms of an injunction

entered by the Bankruptcy Court as part of the 1986

reorganization of Johns-Manville Corporation (Manville) 

bar actions against Manville’s insurers for their own 

wrongdoing. I disagree. In my view, the injunction bars 

only those claims against Manville’s insurers seeking to

recover from the bankruptcy estate for Manville’s misconduct, not those claims seeking to recover against the insurers for their own misconduct. This interpretation

respects the limits of the Bankruptcy Court’s power; it is

consistent with the Court of Appeals’ understanding when

it upheld the 1986 injunction on direct review and with 

Congress’ codification of the Manville bankruptcy approach for future asbestos proceedings in 11 U. S. C. 

§524(g); and it makes sense of Travelers’ payment of $445 
2 TRAVELERS INDEMNITY CO. v. BAILEY 

STEVENS, J., dissenting 

million in 2004 in exchange for a Bankruptcy Court order 

that supposedly “clarified” an unambiguous injunction.

Because the 1986 injunction has never meant what the

Court today assumes, respondents’ challenge is not an 

impermissible collateral attack. The Court of Appeals 

correctly concluded that the Bankruptcy Court’s 2004 

order improperly enjoined the state-law claims at issue in

this proceeding. 

I 

At the heart of the dispute in this litigation is the distinction between two types of lawsuits seeking recovery

from Manville’s primary insurer, The Travelers Indemnity

Company, and its affiliates (together, Travelers). The first 

class, which I shall call “insurer actions,” comprises suits

in which the plaintiff is asserting that Travelers, as an

insurer of Manville, has a duty to satisfy the plaintiff’s

claim against Manville. Plaintiffs in that class include not 

only members of the public exposed to asbestos but also

Manville factory workers and vendors of Manville products. The second class, which I shall call “independent

actions,” comprises suits in which the plaintiff is asserting 

that Travelers is liable for its own misconduct. The plaintiffs in these suits have alleged both violations of state

consumer-protection laws and breaches of common-law 

duties. See ante, at 4. 

Suits that are called “direct actions” in the proceedings

below and in the Court’s opinion may fall in either category, but as the Court acknowledges the “true” definition 

of that term describes only insurer actions. Ante, at 4–5, 

n. 2; see Black’s Law Dictionary 491 (8th ed. 2004). True 

direct actions are lawsuits in which a plaintiff claims that 

she was injured by Manville and seeks recovery directly 

from its insurer without first obtaining a judgment

against Manville. The global settlement that made the

1986 reorganization of Manville possible clearly encom-
Cite as: 557 U. S. ____ (2009) 3 

STEVENS, J., dissenting 

passed all such direct actions; Manville’s insurers paid 

$770 million, including $80 million from Travelers, into

the Manville Personal Injury Settlement Trust (Manville 

Trust) to which these actions would be channeled. But 

many of the claims that gave rise to the instant litigation 

allege no breach of duty by Manville and seek no recovery

from the Manville Trust. See ante, at 4–5, n. 2. They are

claims against Travelers based on its own alleged violations of state statutes and common-law rules. Thus, even 

though the Court calls these claims “direct actions,” they

are nothing of the sort. They are independent actions.

Some of the independent actions are based on facts

concerning Travelers’ insurance relationship with Manville. A number of suits, for example, allege that Travelers acquired information about asbestos-related hazards 

from Manville that it had a duty to disclose to third parties.1 This sort of factual nexus does not, however, transform an independent action into an insurer action. Instead, the question remains whether a suit seeks to 

recover from Travelers for Manville’s wrongdoing or instead seeks to recover from Travelers for its own wrongdoing, making no claim on Manville’s insurance policy proceeds or other assets of the Manville bankruptcy estate. 

Recognizing the distinction between insurer actions and

independent actions, the Court of Appeals held that the 

Bankruptcy Court had improperly enjoined the latter in 

its 2004 order.2 Without ruling on the extent of the Bankruptcy Court’s power, see ante, at 17, the Court today 

—————— 

1The theories asserted in many of the state-law actions are novel, 

and, as the Court of Appeals noted, these claims “have met with almost

universal failure in the state courts.” In re Johns-Manville Corp., 517 

F. 3d 52, 68 (CA2 2008). 2The Court of Appeals noted that the Bankruptcy Court had not considered whether the various actions at issue were properly classified as 

insurer actions or independent actions, and it remanded for the Bankruptcy Court to undertake this assessment. 
4 TRAVELERS INDEMNITY CO. v. BAILEY 

STEVENS, J., dissenting 

concludes that the 1986 injunction unambiguously barred 

independent actions and that the Bankruptcy Court’s 2004

order simply clarified, and did not enlarge, the scope of 

that injunction. Based on that premise, the Court holds

that respondents are challenging the Bankruptcy Court’s 

authority to have issued the injunction in 1986, and it

deems the challenge an impermissible collateral attack. I 

disagree with both the Court’s understanding of the 1986 

injunction and its attendant res judicata analysis. 

II 

The 1986 order of the Bankruptcy Court approving the

insurance settlement agreements (Insurance Settlement

Order), which was incorporated by reference in the order 

confirming Manville’s plan of reorganization, includes

three related protections for Manville’s insurers, each 

focused on the company’s insurance policies. It releases 

the insurers from all “Policy Claims,” channels these

claims to the Manville Trust, and permanently enjoins all

persons from commencing or continuing a proceeding for

“Policy Claims” against a settling insurer. App. to Pet. for

Cert. 445a–446a. The Insurance Settlement Order defines 

“Policy Claims” as: 

“any and all claims, demands, allegations, duties, liabilities and obligations (whether or not presently 

known) which have been, or could have been, or might 

be, asserted by any Person against any or all members 

of the [Manville] Group or against any or all members 

of the Settling Insurer Group based upon, arising out 

of or relating to any or all of the Policies.” Id., at 439a 

(emphasis added).3 

—————— 

3As the Court notes, the order confirming Manville’s reorganization 

plan contains an additional injunction barring claims against the 

settling insurance companies. Ante, at 4, n. 1. The language in that 

order enjoins only insurer actions. See App. to Pet. for Cert. 286a–288a 
Cite as: 557 U. S. ____ (2009) 5 

STEVENS, J., dissenting 

Focusing on the italicized phrase, and particularly the

term “relating to,” the Court declares that this language

“is not even remotely amenable” to a construction that

excludes independent actions and “clearly reaches factual

assertions that relate in a more comprehensive way to

Travelers’ dealings with Manville.” Ante, at 10–11. Thus, 

it concludes that “the plain terms of [the] court order 

unambiguously” bar independent actions. Ante, at 12. 

The Court doth protest too much. Indeed, despite its

insistence that the definition of “Policy Claims” is unambiguous, the Court quickly concludes that it cannot apply 

the “based upon, arising out of or relating to” language

literally because there is a “cutoff at some point, where the

connection between the insurer’s action complained of and

the insurance coverage would be thin to the point of absurd.” Ante, at 11. Presumably, for instance, the Court

would not deem enjoined a state-law claim for personal 

injuries caused by a Travelers’ agent’s reckless driving 

while en route to the courthouse to defend Manville even 

though, in a literal sense, this suit relates to (perhaps

even arises out of) Travelers’ performance of its policy 

obligations to Manville. The Court determines that it 

need not “stake out the ultimate bounds of the injunction”

because it can rely on the Bankruptcy Court’s “uncontested factual findings” that the particular independent

actions at issue fall within the category that it had intended to enjoin. Ibid. 

If the definition of the term “Policy Claims” is not amenable to a purely literal construction and the Court must

look beyond the four corners of the Insurance Settlement 

—————— 

(enjoining actions against settling insurance companies seeking,

directly or indirectly, to recover on or with respect to a “Claim, Interest,

or Other Asbestos Obligation”); id., at 56a, n. 6 (defining “Other Asbestos Obligation” as an obligation arising directly or indirectly from acts

or omissions of a debtor). The parties accordingly focus on whether the 

Insurance Settlement Agreement enjoins independent actions. 
6 TRAVELERS INDEMNITY CO. v. BAILEY 

STEVENS, J., dissenting 

Order to ascertain its meaning, however, the Bankruptcy

Court’s factual findings in 2004 are not the best guide. I 

would instead construe the order with reference to the 

limits of the Bankruptcy Court’s authority—limits that 

were well understood by the insurers during the original

settlement negotiations—and with reference to the Court 

of Appeals’ interpretation of the Insurance Settlement 

Order when it upheld it against a jurisdictional challenge

in 1988. 

We should not lightly assume that the Bankruptcy 

Court entered an order that exceeded its authority. When 

a bankruptcy proceeding is commenced, the bankruptcy 

court acquires control of the debtor’s assets and the power

to discharge its debts. A bankruptcy court has no authority, however, to adjudicate, settle, or enjoin claims against 

nondebtors that do not affect the debtor’s estate. Because 

Travelers’ insurance policies were a significant asset of the 

Manville bankruptcy estate, the Bankruptcy Court had 

the power to channel claims to the insurance proceeds to

the Manville Trust. But this by no means gave it the

power to enjoin claims against nondebtors like Travelers

that had no impact on the bankruptcy estate. Thus, even 

accepting the Bankruptcy Court’s representation in 2004

that it had “meant to provide the broadest protection

possible” to the settling insurers, App. to Pet. for Cert. 

172a, such relief could not include protection from independent actions.

That the Bankruptcy Court was without authority to

enjoin independent actions was well understood by both 

Manville and Travelers during their settlement negotiations. In Manville’s memorandum in support of the Insurance Settlement Agreement, it clarified that it did “not

seek to have [the Bankruptcy] Court release its Settling

Insurers from claims by third parties based on the Insurer’s own tortious misconduct towards the third party” 

but rather sought only to release the insurers “from the 
Cite as: 557 U. S. ____ (2009) 7 

STEVENS, J., dissenting 

rights Manville might itself have against them or rights

derivative of Manville’s rights under the policies being 

compromised and settled.” App. for Respondent Chubb 

Indemnity Insurance Co. 5a. This understanding reflected 

not only the basic fact that the settlement was between 

Manville and its insurers (and not third parties), but also

the parties’ knowledge that the “Second Circuit [had held] 

that the bankruptcy courts lack power to discharge ‘independent’ claims of third parties against nondebtors.” Id., 

at 5a–6a. 

Travelers similarly acknowledged the limits of the 

Bankruptcy Court’s power. Noting that “[t]he court has in 

rem jurisdiction over the Policies and thus the power to

enter appropriate orders to protect that jurisdiction,” it

stated that “the injunction is intended only to restrain 

claims against the res (i.e., the Policies) which are or may

be asserted, against the Settling Insurers.” Id., at 13a– 

14a;4 see also id., at 10a (memorandum of the legal representative of the Bankruptcy Court noting that “[a]ll parties seem to agree that any injunction, channeling order 

and release is limited to this Court’s jurisdiction over the 

res”). In short, it was apparent to the settling parties, and

no doubt also to the Bankruptcy Court, that the court 

lacked the power to enjoin third-party claims against 

nondebtors that did not affect the debtor’s estate. 

When the Court of Appeals upheld the injunction barring the assertion of “Policy Claims” against Manville’s

insurers it, too, understood these limits of the Bankruptcy 

Court’s authority. MacArthur Corporation, a Manville

asbestos distributor, claimed to be a coinsured under 

Manville’s insurance policies by virtue of “vendor en-

—————— 

4This statement of Travelers’ intent belies the Bankruptcy Court’s

suggestion that enjoining independent actions was a necessary condition of Travelers’ contribution to the Manville estate. See App. to Pet. 

for Cert. 170a–173a. 
8 TRAVELERS INDEMNITY CO. v. BAILEY 

STEVENS, J., dissenting 

dorsements” in those policies entitling distributors to

insurance coverage for claims arising from their sale of 

Manville products. MacArthur argued that the Bankruptcy Court lacked authority to issue the Insurance 

Settlement Order, which prevented it from suing the

insurers, because this order constituted a de facto discharge in bankruptcy of nondebtor parties not entitled to

Chapter 11 protection. In rejecting MacArthur’s argument, the Court of Appeals did not hold that the Bankruptcy Court possessed the authority to enjoin all actions 

against the insurers bearing some factual connection to 

Manville. Rather, it held that MacArthur had misconstrued the scope of the Bankruptcy Court’s order, which 

precluded “only those suits against the settling insurers

that arise out of or relate to Manville’s insurance policies.” 

MacArthur Co. v. Johns-Manville Corp., 837 F. 2d 89, 91 

(CA2 1988).

The Court of Appeals reasoned that this language enjoined MacArthur’s claims because “MacArthur’s rights as 

an insured vendor are completely derivative of Manville’s

rights as the primary insured.” Id., at 92. Just as asbestos victims were “barred from asserting direct actions

against the insurers,” so too was MacArthur barred because “in both instances, third parties seek to collect out of 

the proceeds of Manville’s insurance policies on the basis of 

Manville’s conduct.” Id., at 92–93 (emphasis added). The 

Court of Appeals further held that, because Manville’s

policies were property of the bankruptcy estate, the Bankruptcy Court had “properly issued the orders pursuant to

its equitable and statutory powers to dispose of the 

debtor’s property free and clear of third-party interests 

and to channel those interests to the proceeds thereby 

created.” Id., at 91. 

As the Court of Appeals recognized in the instant proceedings, its earlier interpretation of the Insurance Settlement Order in MacArthur did not and does not extend 
Cite as: 557 U. S. ____ (2009) 9 

STEVENS, J., dissenting 

to the independent actions at issue in the instant suit:

“Travelers candidly admits that both the statutory and 

common law claims seek damages from Travelers that are 

unrelated to the policy proceeds, quite unlike the claims in 

MacArthur . . . where plaintiffs sought indemnification or 

compensation for the tortious wrongs of Manville to be

paid out of the proceeds of Manville’s insurance policies.” 

In re Johns-Manville Corp., 517 F. 3d 52, 63 (CA2 2008). 

Also in contrast to MacArthur, “the claims at issue here do 

not seek to collect on the basis of Manville’s conduct. . . . 

Instead, the Plaintiffs seek to recover directly from Travelers, a non-debtor insurer, for its own alleged misconduct.” Ibid. 

The Court of Appeals’ interpretation of the 1986 Insurance Settlement Order as enjoining only insurer actions

and not independent actions is further supported by a

statutory provision patterned after the Manville settlement. In the Bankruptcy Reform Act of 1994, Congress 

adopted 11 U. S. C. §524(g) to expressly authorize the 

approach of the Manville bankruptcy in future asbestosrelated bankruptcies. In granting bankruptcy courts the 

power to provide injunctive relief to nondebtors, Congress

stated that courts may bar an action directed against a

third party who “is alleged to be directly or indirectly 

liable for the conduct of, claims against, or demands on the 

debtor to the extent such alleged liability of such third

party arises by reason of . . . the third party’s provision of 

insurance to the debtor or a related party.”

§524(g)(4)(A)(ii) (emphasis added). As the italicized language makes clear, the statute permits a bankruptcy court 

to enjoin actions seeking to proceed against a nondebtor 

insurer for a debtor’s wrongdoing, but it does not confer 

power to enjoin independent actions arising out of the

insurer’s own wrongdoing. See generally In re Combustion 

Engineering, Inc., 391 F. 3d 190, 235, n. 47 (CA3 2004) 

(explaining that §524(g), like the Manville injunction, is 
10 TRAVELERS INDEMNITY CO. v. BAILEY 

STEVENS, J., dissenting 

limited to insurer actions). Had Congress interpreted 

“Policy Claims” in the manner the Court does today, and 

had it sought to codify that definition, it would have used 

broader language.

Finally, it is worth asking why Travelers paid more 

than $400 million in 2004 to three new settlement funds 

in exchange for the Bankruptcy Court’s order “clarifying” 

that the independent actions “are—and always have

been—permanently barred” by the 1986 injunction. App.

to Pet. for Cert. 170a. If the 1986 injunction were as clear 

as the Court assumes, surely Travelers would not have

paid $445 million—more than five times the amount of its

initial contribution to the Manville Trust—to obtain a 

redundant piece of paper. 

In sum, I believe the 1986 Insurance Settlement Order 

did not enjoin independent actions of the sort giving rise to 

these proceedings. A contrary conclusion ignores the

limits of the Bankruptcy Court’s authority, the Court of

Appeals’ interpretation of the order upheld on direct review in 1988, Congress’ approval of the Manville reorganization, and Travelers’ own conduct during both the 1986

and 2004 settlement negotiations. 

III 

The Court’s holding that respondents’ challenge is an

impermissible collateral attack is predicated on its determination that the 1986 Insurance Settlement Order 

plainly enjoined their independent actions. See ante, at 

13–14. Because I disagree with this premise, I also disagree with the Court’s preclusion analysis. In challenging 

the Bankruptcy Court’s 2004 order “clarifying” the scope of 

the Insurance Settlement Order, respondents were in fact

timely appealing an order that rewrote the scope of the 

1986 injunctions. Their objection could not have been

raised on direct appeal of the 1986 order because it was 

not an objection to anything in that order. And, of course, 
Cite as: 557 U. S. ____ (2009) 11 

STEVENS, J., dissenting 

the Court of Appeals did not rule on a challenge to the 

enjoining of independent actions during direct review, as

the Court acknowledges. See ante, at 14, n. 5. To the 

contrary, it interpreted the 1986 order as reaching only 

insurer actions. Thus, there neither was nor reasonably

could have been a prior challenge that the 1986 order 

impermissibly enjoined independent actions.

Because the Court regards respondents’ challenge as a

collateral attack, it brushes aside their jurisdictional 

objection to the Bankruptcy Court’s 2004 order on the 

ground that “the Bankruptcy Court plainly had jurisdiction to interpret and enforce its own prior orders.” Ante, 

at 13. But neither respondents nor the Court of Appeals 

contested that point. Rather, respondents argued that the 

Bankruptcy Court was not merely interpreting and enforcing its prior orders and that it had no jurisdiction to enjoin 

the independent actions when it approved the 2004 settlements. The Court of Appeals accordingly examined

whether the 2004 order improperly expanded the scope of 

the 1986 injunction and concluded that it did, thereby 

enjoining claims that were beyond the Bankruptcy Court’s 

power to enjoin.

In my view, the judgment of the Court of Appeals was 

correct. The 1986 Insurance Settlement Order did not bar 

independent actions, and the Bankruptcy Court lacked 

any basis for enjoining those actions in 2004. The independent actions have no effect on the bankruptcy estate,

and “bankruptcy courts have no jurisdiction over proceedings that have no effect on the debtor.” Celotex Corp. v. 

Edwards, 514 U. S. 300, 309, n. 6 (1995). The Court of 

Appeals thus correctly concluded that the Bankruptcy

Court had impermissibly enjoined “claims against Travelers that were predicated, as a matter of state law, on

Travelers’ own alleged misconduct and were unrelated to 

Manville’s insurance policy proceeds and the res of the 

Manville estate.” 517 F. 3d, at 68. 
12 TRAVELERS INDEMNITY CO. v. BAILEY 

STEVENS, J., dissenting 

IV 

Because I am persuaded that the 1986 Insurance Settlement Order did not encompass independent actions and

that that Bankruptcy Court improperly enjoined such 

actions in 2004, I respectfully dissent.