TRAVELERS INDEMNITY CO. et al. v. BAILEY et al.

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137 OCTOBER TERM, 2008
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 Corpora
tion (Manville), an asbestos supplier and manufacturer of asbestos
containing products, the Bankruptcy Court approved a settlement pro
viding 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 chan
neled 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 Trav
elers 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 du
ties. 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 Di
rect 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 relation
ship with Manville and that the Direct Actions are based on acts or
omissions by Travelers 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 (re
spondents 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
*Together with No. 08–307, Common Law Settlement Counsel v. Bailey
et al., also on certiorari to the same court.

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138 TRAVELERS INDEMNITY CO. v. BAILEY
Syllabus
that the Bankruptcy Court lacked jurisdiction to enjoin the Direct Ac
tions 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 Travel
ers, and the finality of the Bankruptcy Court’s 1986 Orders generally
stands in the way of challenging their enforceability. Pp. 147–156.
(a) The Direct Actions are “Policy Claims” enjoined as against Trav
elers by the 1986 Orders, which covered, inter alia, “claims” and “alle
gations” “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 Bank
ruptcy 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 de
rivative 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 en
forced 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. 148–151.
(b) Because the 1986 Orders became final on direct review over two
decades ago, whether the Bankruptcy Court had jurisdiction and author
ity 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 unen
forceable according to their terms on the ground that the 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

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Syllabus
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 Or
ders. The Second Circuit’s willingness to entertain this collateral at
tack 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. 151–154.
(c) This holding is 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.
P. 155.
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. Ste
vens, J., filed a dissenting opinion, in which Ginsburg, J., joined, post,
p. 156.
Barry R. Ostrager argued the cause for petitioners in both
cases. With him on the briefs in No. 08–295 were Myer O.
Sigal, Jr., Andrew T. Frankel, Robert J. Pfister, and Eliza
beth A. Warren. Ronald Barliant, Kathryn A. Pamenter,
and Kenneth S. Ulr ich filed briefs for petitioner in
No. 08–307.
Samuel Issacharoff argued the cause for respondents Bai
ley et al. With him on the briefs were Samuel Estreicher,
Sander L. Esserman, and Jason R. Searcy. Jacob C. Cohn
argued the cause for respondent Chubb Indemnity Insurance
Co. With him on the brief was William P. Shelley.†
†Paul J. Watford filed a brief for Resolute Management, Inc., as amicus
curiae urging reversal in No. 08–295.
Richard Lieb filed a brief for Jagdeep S. Bhandari et al. as amici curiae
urging affirmance in both cases.
James L. Patton, Jr., and Rolin P. Bissell filed a brief for Future Claim
ants Representatives as amici curiae in both cases.

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140 TRAVELERS INDEMNITY CO. v. BAILEY
Opinion of the Court
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, includ
ing 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 in
surer 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 the enforceability of the
injunction.
I
From the 1920s to the 1970s, Manville was, by most ac
counts, the largest supplier of raw asbestos and manufac
turer 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 dis
ease 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 overwhelm
ing liability led Manville to file for bankruptcy protection in
the Southern District of New York.
It thus became incumbent on the Bankruptcy Court to de
vise “a plan of reorganization for [Manville] which would pro
vide for payment to holders of present or known asbestos

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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 Man
ville Personal Injury Settlement Trust (Trust) to pay all as
bestos 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.
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 in
surers agreed to provide most of the initial corpus of the
Trust, with a payment of $770 million to the bankruptcy es
tate, $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 Johns-Manville Corp., 68 B. R. 618, 621
(Bkrtcy. Ct. SDNY 1986).
There would have been no such payment without the in
junction at the heart of the present dispute. The December
18, 1986, order of the Bankruptcy Court approving the insur
ance 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 Pol
icy Claims against any or all members of the Settling Insurer

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142 TRAVELERS INDEMNITY CO. v. BAILEY
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Group.” App. to Pet. for Cert. in No. 08–295, at 446a. The
Insurance Settlement Order goes on to provide that the in
surers 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 re
lating to any or all of the Policies.” Id., at 439a. The insur
ers were entitled “to terminate the settlements if the injunc
tive orders [were] not issued or if they [were] set aside on
appeal.” MacArthur, supra, at 90.
The Insurance Settlement Order was incorporated by ref
erence 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 Ac
tions 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.
1 The Confirmation Order itself contains an additional injunction barring
certain claims against the settling insurance companies. App. to Pet. for
Cert. in No. 08–295, pp. 286a–288a. That injunction does not bear on our
decision, and we do not consider it.

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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 wrong
doing, but for Travelers’ own alleged violations of state law.
See 517 F. 3d, at 63.2
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 tem
porary 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’ protec
tion under the 1986 Orders. Id., at 151a–152a.
After notice of the settlement was given to potential claim
ants, the Bankruptcy Court (the same judge who had issued
the 1986 Orders) held an evidentiary hearing and made ex
tensive factual findings that are not challenged here. The
2 A true “direct action” suit is “[a] lawsuit by a person claiming against
an insured but suing the insurer directly instead of pursuing 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.

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144 TRAVELERS INDEMNITY CO. v. BAILEY
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court determined that “Travelers[’] knowledge of the haz
ards 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 ob
ligations and generally through its lengthy and confidential
insurance relationship under the 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 co
ordinated 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 en
joined 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,

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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.
The settlement was accordingly approved and an order
dated August 17, 2004 (Clarifying Order), was entered, pro
viding that the 1986 Orders barred the pending Direct Ac
tions 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[’] insur
ance relationship with Manville or Travelers[’] knowledge or
alleged knowledge concerning the hazards of asbestos,” in
cluding 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 pro
ceeds or other obligations arising under any policy of insur
ance provided by Travelers to a policyholder other than Man
ville.” Id., at 96a. The Clarifying Order also separately
disclaims that it enjoins bringing
“claims arising from contractual obligations by Travel
ers to policyholders other than Manville, as long as Trav
elers[’] alleged liability or the proof required to establish
Travelers[’] alleged liability is unrelated to any knowl
edge Travelers gained from its insurance relationship
with Manville or acts, errors, omissions or evidence re
lated to Travelers[’] insurance relationship with Man
ville.” Ibid.
Some individual claimants and Chubb Indemnity Insur
ance Company (Chubb), respondents before this Court, ob
jected to the settlement and subsequently appealed.3 So far
3 Chubb 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.

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146 TRAVELERS INDEMNITY CO. v. BAILEY
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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 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 set
tling claimants responded that the Clarifying Order is con
sistent 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 ex
tensive 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 Or
ders, “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”).

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The Court of Appeals found that “the jurisdictional analy
sis 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 Man
ville 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 con
trast, “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. 1083 (2009), and now
reverse.
II
The Bankruptcy Court correctly understood that the Di
rect Actions fall within the scope of the 1986 Orders, as suits

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148 TRAVELERS INDEMNITY CO. v. BAILEY
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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 di
rect review of the 1986 Orders, the Court of Appeals would
indeed have been dutybound to consider whether the Bank
ruptcy Court had acted beyond its subject-matter jurisdic
tion. 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 Cir
cuit’s jurisdictional ruling is correct: whether the Bank
ruptcy 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 Cir
cuit, 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 in
surance 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 reaches factual assertions that re

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late 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’ insur
ance 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 be
tween the insurer’s action complained of and the insurance
coverage would be thin to the point of absurd. See Califor
nia Div. of Labor Standards Enforcement v. Dillingham
Constr., N. A., Inc., 519 U. S. 316, 335 (1997) (Scalia, J., con
curring) (“[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 perpe
trated 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 deriva
tively for Manville’s wrongdoing, but not actions to recover
for Travelers’ own misconduct, no matter what its relation
ship 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 actions,

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150 TRAVELERS INDEMNITY CO. v. BAILEY
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and there is language in the 1986 Orders directly to the con
trary: 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 bank
ruptcy (including Travelers) understood the proposed injunc
tion 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., Negro´ n-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, a public

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Opinion of the Court
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 rec
ognized, 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 ju
risdictional 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 Bank
ruptcy Court’s exercise of jurisdiction in 1986.
4 Even 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.

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152 TRAVELERS INDEMNITY CO. v. BAILEY
Opinion of the Court
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 Sec
ond Circuit disagreed, concluding that the Bankruptcy Court
had not stepped outside its jurisdiction or statutory author
ity.5 See 837 F. 2d, at 91–94. But once the 1986 Orders
became final on direct review (whether or not proper exer
cises of bankruptcy court jurisdiction and power), they be
came 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 juris
diction . . . may not be attacked collaterally.” Kontrick v.
Ryan, 540 U. S. 443, 455, n. 9 (2004). See also Chicot County
5 We 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 Mac-
Arthur limited the scope of the 1986 Orders to derivative claims, see post,
at 156, 162–163 (opinion of Stevens, J.), but it did not. The question
whether the Bankruptcy Court had enjoined or could properly enjoin non
derivative claims was not at issue in MacArthur, and the court did not
answer it.

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Opinion of the Court
Drainage Dist. v. Baxter State Bank, 308 U. S. 371, 376
(1940) (“[Federal courts] are courts with authority, when par
ties are brought before them in accordance with the require
ments 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 en
forcement of the 1986 Orders. See Insurance Corp. of Ire
land 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 ad
verse 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
6 The 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), de
scribes 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 au
thority; or
“(2) Allowing the judgment to stand would substantially infringe the au
thority of another tribunal or agency of government; or

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154 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 pro
viding an end to litigation justifies a rule preventing col
lateral attack on subject-matter jurisdiction”). Almost a
quarter century after the 1986 Orders were entered, the
time to prune them is over.7
“(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.
7 Respondents point out that it is Travelers, not they, who moved the
Bankruptcy Court to enforce the 1986 Orders. But who began the pres
ent 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 argu
ment is an impermissible collateral attack. And to the extent respond
ents disclaim any initial intent to mount such an attack, this too is irrele
vant, since the decision of the Court of Appeals is what we review and
find at odds with finality.

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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 Bank
ruptcy 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 respond
ents 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 re
jected this argument, id., at 68–69, but the Court of Appeals
did not reach it, 517 F. 3d, at 60, n. 17. On remand, the
Court of Appeals can take up this objection and any others
that respondents have preserved.
8 Section 524(h) provides that under some circumstances § 524(g) oper
ates retroactively to validate an injunction. We need not decide whether
those circumstances are present here.

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156 TRAVELERS INDEMNITY CO. v. BAILEY
Stevens, J., dissenting
IV
We reverse the judgment of the Court of Appeals and re
mand the cases for further proceedings consistent with this
opinion.
It is so ordered.
Justice Stevens, with whom Justice Ginsburg joins,
dissenting.
The Court holds that the plain terms of an injunction en
tered by the Bankruptcy Court as part of the 1986 reor
ganization of Johns-Manville Corporation (Manville) bar ac
tions 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 Man
ville bankruptcy approach for future asbestos proceedings in
11 U. S. C. § 524(g); and it makes sense of Travelers’ payment
of $445 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 imper
missible collateral attack. The Court of Appeals correctly
concluded that the Bankruptcy Court’s 2004 order improp
erly enjoined the state-law claims at issue in this proceeding.
I
At the heart of the dispute in this litigation is the distinc
tion between two types of lawsuits seeking recovery from
Manville’s primary insurer, The Travelers Indemnity Com
pany, and its affiliates (together, Travelers). The first class,

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Stevens, J., dissenting
which I shall call “insurer actions,” comprises suits in which
the plaintiff is asserting that Travelers, as an insurer of Man
ville, has a duty to satisfy the plaintiff ’s claim against Man
ville. 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 lia
ble for its own misconduct. Plaintiffs in these suits have
alleged both violations of state consumer-protection laws
and breaches of common-law duties. See ante, at 142–143.
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 143, n. 2; see
Black’s Law Dictionary 491 (8th ed. 2004). True direct ac
tions are lawsuits in which a plaintiff claims that she was
injured by Manville and seeks recovery directly from its in
surer without first obtaining a judgment against Manville.
The global settlement that made the 1986 reorganization of
Manville possible clearly encompassed all such direct actions;
Manville’s insurers paid $770 million, including $80 million
from Travelers, into the Manville Personal Injury Settle
ment 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 143,
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 ac
tions,” they are nothing of the sort. They are independent
actions.
Some of the independent actions are based on facts con
cerning Travelers’ insurance relationship with Manville. A
number of suits, for example, allege that Travelers acquired

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158 TRAVELERS INDEMNITY CO. v. BAILEY
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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 Bank
ruptcy Court’s power, see ante, at 155, the Court today con
cludes that the 1986 injunction unambiguously barred inde
pendent actions and that the Bankruptcy Court’s 2004 order
simply clarified, and did not enlarge, the scope of that injunc
tion. Based on that premise, the Court holds that respond
ents are challenging the Bankruptcy Court’s authority to
have issued the injunction in 1986, and it deems the chal
lenge 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
1 The theories asserted in many of the state-law actions are novel, and,
as the Court of Appeals noted, these claims “have met with almost univer
sal failure in the state courts.” In re Johns-Manville Corp., 517 F. 3d 52,
68 (CA2 2008).
2 The Court of Appeals noted that the Bankruptcy Court had not consid
ered whether the various actions at issue were properly classified as in
surer actions or independent actions, and it remanded for the Bankruptcy
Court to undertake this assessment.

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Stevens, J., dissenting
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 Man
ville Trust, and permanently enjoins all persons from com
mencing or continuing a proceeding for “Policy Claims”
against a settling insurer. App. to Pet. for Cert. in
No. 08–295, pp. 445a– 446a. The Insurance Settlement
Order defines “Policy Claims” as:
“any and all claims, demands, allegations, duties, liabili
ties and obligations (whether or not presently known)
which have been, or could have been, or might be, as
serted 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 (em
phasis added).3
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’ deal
ings with Manville.” Ante, at 148–149. Thus, it concludes
that “the plain terms of [the] court order unambiguously”
bar independent actions. Ante, at 150.
3 As the Court notes, the order confirming Manville’s reorganization plan
contains an additional injunction barring claims against the settling insur
ance companies. Ante, at 142, n. 1. The language in that order enjoins
only insurer actions. See App. to Pet. for Cert. in No. 08–295, pp. 286a–
288a (enjoining actions against settling insurance companies seeking, di
rectly 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 In
surance Settlement Order enjoins independent actions.

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160 TRAVELERS INDEMNITY CO. v. BAILEY
Stevens, J., dissenting
The Court doth protest too much. Indeed, despite its in
sistence that the definition of “Policy Claims” is unambigu
ous, 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 connec
tion between the insurer’s action complained of and the in
surance coverage would be thin to the point of absurd.”
Ante, at 149. 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 independ
ent actions at issue fall within the category that it had in
tended to enjoin. Ibid.
If the definition of the term “Policy Claims” is not amena
ble to a purely literal construction and the Court must look
beyond the four corners of the Insurance Settlement Order
to ascertain its meaning, however, the Bankruptcy Court’s
factual findings in 2004 are not the best guide. I would in
stead construe the order with reference to the limits of the
Bankruptcy Court’s authority—limits that were well under
stood by the insurers during the original settlement negotia
tions—and with reference to the Court of Appeals’ interpre
tation 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 bank
ruptcy 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 non

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debtors 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. in No. 08–295, at
172a, such relief could not include protection from independ
ent actions.
That the Bankruptcy Court was without authority to en
join independent actions was well understood by both Man
ville and Travelers during their settlement negotiations. In
Manville’s memorandum in support of the Insurance Settle
ment Order, it clarified that it did “not seek to have [the
Bankruptcy] Court release its Settling Insurers from any
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 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 set
tlement 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 non
debtors.” Id., at 5a–6a.
Travelers similarly acknowledged the limits of the Bank
ruptcy 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 as

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162 TRAVELERS INDEMNITY CO. v. BAILEY
Stevens, J., dissenting
serted, 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 dis
tributor, claimed to be a coinsured under Manville’s insur
ance policies by virtue of “vendor endorsements” in those
policies entitling distributors to insurance coverage for
claims arising from their sale of Manville products. MacAr
thur 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 enti
tled to Chapter 11 protection. In rejecting MacArthur’s ar
gument, the Court of Appeals did not hold that the Bank
ruptcy Court possessed the authority to enjoin all actions
against the insurers bearing some factual connection to Man
ville. 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 in
4 This statement of Travelers’ intent belies the Bankruptcy Court’s sug
gestion that enjoining independent actions was a necessary condition of
Travelers’ contribution to the Manville estate. See App. to Pet. for Cert.
in No. 08–295, at 170a–173a.

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sured vendor are completely derivative of Manville’s rights
as the primary insured.” Id., at 92. Just as asbestos vic
tims 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 proceed
ings, its earlier interpretation of the Insurance Settlement
Order in MacArthur did not and does not extend to the inde
pendent actions at issue in the instant suit: “Travelers can
didly 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 tor
tious 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 al
leged 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 asbestos-related bankruptcies.
In granting bankruptcy courts the power to provide injunc

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164 TRAVELERS INDEMNITY CO. v. BAILEY
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tive 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 itali
cized language makes clear, the statute permits a bankruptcy
court to enjoin actions seeking to proceed against a non
debtor insurer for a debtor’s wrongdoing, but it does not con
fer 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) (ex
plaining that § 524(g), like the Manville injunction, is 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 ex
change for the Bankruptcy Court’s order “clarifying” that
the independent actions “are—and always have been—per
manently barred” by the 1986 injunction. App. to Pet. for
Cert. in No. 08–295, at 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 redun
dant 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 Trav
elers’ own conduct during both the 1986 and 2004 settle
ment negotiations.

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165 Cite as: 557 U. S. 137 (2009)
Stevens, J., dissenting
III
The Court’s holding that respondents’ challenge is an im
permissible collateral attack is predicated on its determi
nation that the 1986 Insurance Settlement Order plainly
enjoined their independent actions. See ante, at 149–151.
Because I disagree with this premise, I also disagree with
the Court’s preclusion analysis. In challenging the Bank
ruptcy Court’s 2004 order “clarifying” the scope of the Insur
ance 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 objec
tion to anything in that order. And, of course, the Court
of Appeals did not rule on a challenge to the enjoining of
independent actions during direct review, as the Court ac
knowledges. See ante, at 152, n. 5. To the contrary, it in
terpreted 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 col
lateral 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 151. 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 Ap
peals accordingly examined whether the 2004 order improp
erly 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

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166 TRAVELERS INDEMNITY CO. v. BAILEY
Stevens, J., dissenting
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 “bank
ruptcy courts have no jurisdiction over proceedings that
have no effect on the estate of 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 insur
ance policy proceeds and the res of the Manville estate.”
517 F. 3d, at 68.
IV
Because I am persuaded that the 1986 Insurance Settle
ment Order did not encompass independent actions and that
the Bankruptcy Court improperly enjoined such actions in
2004, I respectfully dissent.