Revisiting Scalia's 'What's It To You?' After Kaiser Ruling

The U.S. Supreme Court recently held in Truck Insurance Exchange v. Kaiser Gypsum Co. that an insurer with financial responsibility to pay claims filed against a debtor in its bankruptcy case is a "party in interest" under Section 1109(b) of the Bankruptcy Code and, accordingly, "may appear and be heard" in a Chapter 11 case, including for the purpose of objecting to a plan of reorganization.

Mere days after the ruling, insurers faced with mass tort liability argued in courts across the country that Kaiser grants them an unfettered right to conduct discovery, present evidence, and be heard on any and all issues in bankruptcy cases — including issues where they do not meet the requirements for Article III and prudential standing.