San Diego Diocese Bankruptcy Anxiety Tom Smith

I found this little blurb about the U.S. bankruptcy judge who is presiding over the bankruptcy of the San Diego RC Diocese.  I must admit it makes me a little nervous.

Louise De Carl-Adler is a judge of the U.S.
Bankruptcy Court. She came from a modest
background, which, without help from
scholarships, would not have permitted her
to go to college. She entered the legal
profession at a time when women lawyers
were rare and discrimination against them
rampant. Because of her background, she
strongly supports causes which promote and
protect the education, health, and the
reproductive freedom of women.

(Emphasis added.)  Of course, just because somebody is a big supporter of abortion rights does not mean they have anything against the Catholic Church.  But the Diocese has, to say the least, been getting a rather hard time from the judge, which is not to say it does not deserve the same; I haven’t followed the case closely enough to really know:

SAN DIEGO In a blistering, six-page statement, a judge is threateningto throw the San Diego Catholic diocese’s bankruptcy case out of courtbecause of a financial report that found problems ranging from parisheswithholding money to the diocese failing to report the fair marketvalue of properties.

I am just wondering out loud here whether Judge De Carl-Adler might not be the biggest fan in the world of the Catholic Church, and whether that makes a difference in this case.  But I suppose a bankruptcy judge with, oh, a degree in canon law from the Gregorian University would be a lot to hope for.  And also, the facts of priestly sexual abuse may be so dreadful, that starting out as a fan or not of the RC church would not make much a difference in the end.  Maybe the facts are so prejudicial that any extra little prejudice would not matter.  (Check out the comments after the SD U-T article linked to above if you want a taste of the ugly anti-Catholic animus provoked by this case.  Sure, an’ it reminds me of the days, like in me own town of Boise, back in the ’30’s, when, or so my parents told me, the Klan burned crosses in the front yards of the Cat’lics, perhaps partly for want of African-Americans and Jews.)

Having raised this delicate subject, I will note more substantively that my problem is also that not much weight seems to be given, in the press accounts at least, and as far as I can tell, to the fact that the assets of the parishes really are separate from one another and the diocese, in practice, though perhaps not in law.  At least they are supposed to be. 

For example, I gave some modest (and I mean modest) amount of money to help build an education building at the parish where my kids go to school.  I was to get a brick with my name on it.  But now I am given to understand that that money is just gone, poof!, sucked into the maw of this case.  I suspect any effort by the parish to stop this from happening would be part of what the judge and her independent expert are outraged about, though possibly less benign maneuvers as well.  But, if we assume the Diocese is not supposed to start closing down some of the best schools in this educationally-challenged county so as to pay the sex abuse victims, and their lawyers, just how exactly is that aspiration to be accounted for?  If that is what the Diocese is trying to do (and as I said, I don’t know, nor would any diligent reader of the Union-Tribune), would that be consistent with what the judge wants of them, or would that just get the Diocese into more trouble?  Is anybody weighing, from a policy perspective, how to balance the interests of sex abuse victims from the last century against the school kids of this century? 

Don’t get me wrong; if anybody, priest or otherwise, rapes a child, I think life in prison is too good for such a miscreant.  My late father, a judge in Idaho, sent a Catholic priest to the Idaho State Penitentiary for child molestation, from which he was lucky to emerge alive.  But if you were a sexual abuse victim, would you really say, I should get $1 million (and my lawyer a third to a half of that) even if it means closing down the school at Our Lady of the Poor and dropping those three hundred kids into schools where they wont learn to read?  I’m not sure what the word for that would be, some sort of reckoning perhaps, but justice it ain’t.

I understand quite well that the Diocese is one corporation, which makes one wonder if the plaintiffs’ bar was not somehow consulted in the constitution of the Catholic Church.  A fatter target for litigation can hardly be imagined.  It means money given to a church in the desert east of San Diego in 2007 can be tapped to compensate a man who was molested a 90 minute drive away 50 years ago by a priest who is now dead.  I call this form over substance, but then as a Catholic I am used to living with things that don’t make a lot of sense.  But then again, maybe this whole sorry business will encourage the American church to revisit how it is, as a legal matter, organized.

But I will say this.  Some time ago I read that the plaintiffs’ lawyers were complaining that some assets dedicated to some Catholic purpose or other were in corporations separate from the Diocese, but that they should be able to get at those assets too.  But wait a minute.  Some parish in East Cactus that didn’t even exist in 1960 is on the hook to the plaintiffs because it is part of the Diocese as a matter of corporate law.  But some foundation or other entity that is not part of the Diocese is also on the hook because what, it does Catholic stuff?  If it’s going to be form over substance when it helps the plaintiffs, it ought to be form over substance when it hurts the plaintiffs as well.  But, as I say, I am expressing this anxiety based on inferences I’m making from press reports, so I could be worrying for nothing.

I should protest again my ignorance, and stress of course that I am speaking only for myself here and certainly not for the Holy Father, the Diocese of San Diego, the independent Catholic university that happens to employ me, the parish where I often am not to be found on Sundays, let alone God or his holy angels.  I am just expressing skepticism that the Diocese is getting a fair shake, at least from the Union-Tribune and the L.A. Times, and maybe not even from the bankruptcy judge.  Skepticism, that’s all.  For example, has the judge, her expert or anyone explained how the Diocese is supposed to pay $140 million (or whatever) to the sexual abuse plaintiffs (and their lawyers, who will get a very significant cut) and still keep their schools and churches running?  Has anyone been given the leeway to produce a plan that would allow this?  When we are told (by the plaintiffs’ attorneys) that the Diocese has money enough to pay what the plaintiffs demand, is this taking into account the schools, parishes, educational programs and so on that the various parishes support?  Has anyone besides the Diocese even looked at that?  Is all that just chopped liver?  What I mean to say is, is there any chance I’m going to get my brick?

When I was in practice I worked on the asbestos mass tort bankruptcies (on the defendants’ side) and my first major law review article was about mass tort bankruptcy.  I have thought about mass tort bankruptcy as deeply as anybody should.  For clarity, Aquinas on angels is much to be preferred.  For a while, allow me to boast, it looked like an institution I designed might even be used in the Dow Corning bankruptcy, or at least I was called by the bankruptcy judge in that case, before the creditors committee crushed that idea, and yanked the matter up to the federal district court to make sure the future plaintiffs were not, ah, over -represented.  Anyone who has seen mass tort bankruptcy up close knows that to call the process merely imperfect is naive in the extreme.   You have many people, some real and some abstract, all with incommensurable claims on a pot of money that is perhaps impossible to define, except to say there is not nearly enough to go around.  The process tends to be taken over by those with the most vivid claims, at the expense of those with interests that are equal to those of the plaintiffs, or at least deserve some weight. The only thing you can bet on is that the lawyers will get rich. 

Is that what is going to happen in the sexual abuse mass tort matter in the San Diego Diocese?  I don’t know, but it is surely a question worth asking.  In this case, the interests that I worry may be underrepresented are those of the current and future parishioners who have churches and schools they want to keep running. And yes, the children that quite apart from any purely religious interest (which also deserves some weight) benefit from these institutions.  I have paid for my brick, I read the papers, and I am not reassured.

STEVE BAINBRIDGE addresses some of legal issues of separate incorporation (and failure to do so) here.  I think it is high time for the Church to take seriously the idea of every parish being separately incorporated.  Surely every school should be.