October 9, 2014 | By Greene Broillet & Wheeler
$1.2 billion: That’s the number reported by the Catholic News Agency (CNA) last year regarding a rash of sex abuse lawsuits against the Catholic Church in California. After the state legislature made a change to the statute of limitations in the 2000s, victims of sex abuse brought roughly 1,000 lawsuits that resulted in around $1.2 billion in damages.
This staggering number obviously hurts the church’s pocketbook, so it is no surprise that the report (“Calif. advances abuse bill that could bankrupt Catholic dioceses“) sounds the ominous note of bankruptcy and financial distress.
CNA quotes a representative of the California Catholic Conference: “In the case of one of our dioceses, the Diocese of Stockton, they’re worried they might have to file for bankruptcy.” As it turns out, the rep was right: the Diocese of Stockton did file for Chapter 11 bankruptcy in January 2014, and according to the Wall Street Journal, it was the 10th diocese to do so at the time.
Stockton appears to be the most recent diocese to file for bankruptcy protection, second only to the Diocese of Helena in Montana, which also filed early this year.
In general, the answer is no. Multimillion-dollar settlements might ultimately prove too costly for a diocese – as this Minnesota Public Radio timeline makes evident – but bankruptcy does not mean that victims of sex abuse will lose all compensation.
MPR quotes a lawyer who represents sex abuse victims: “We believe that the bankruptcy process will provide the most efficient resolution for our clients, rather than years of litigation and trials with uncertain outcomes.”
And the resolution this lawyer speaks of is the maximum amount of compensation possible under the circumstances, even in circumstances where the church has filed for bankruptcy in an effort to protect itself.
A civil lawsuit brought against a diocese (or similar organization) alleging sex abuse is a form of a personal injury claim. Allegations in these cases generally involve the fact that the organization could have stopped sex abuse from occurring but did not. The multimillion-dollar settlements and the bankruptcy of multiple dioceses seem to confirm that this is how it was (one can only hope no longer is) inside the Catholic Church.