Tensions rise over Santa Rosa Diocese’s plan to seek bankruptcy protection in face of more than 130 abuse claims

Editor’s note: This story addresses the issue of child sex abuse and could be triggering. Please exercise care. This is the second in a two-part series. Read the first part here.

Scores of survivors of clergy abuse — people who had spent decades trying to escape the grief and trauma of childhood sex assault — have come forward over the past three years after deciding now is finally the time to seek justice.

At least 130 — likely many more, attorneys say — have filed or will file lawsuits against the Santa Rosa Roman Catholic Diocese during a special three-year window that allows adults of any age to file personal injury cases for childhood sex abuse in California. That window closes on New Year’s Eve.

But none of those cases is likely to go to trial.

The diocese announced to the court Nov. 30 that it would seek Chapter 11 bankruptcy protection early next year, a move that will suspend state court proceedings and leave the whole matter in federal bankruptcy court.

In effect, experts and plaintiffs attorneys say, that means the judicial process becomes less about finding the truth in each case and holding those in power to account for decades of horrific abuse and more about assigning dollars and cents.

The priority under Chapter 11 reorganization is the well-being of the church and its ability to carry on while the abused become just more creditors, “fighting for the same dollar” as, say, a roofer or any other vendor, said Professor Marci Hamilton. She is the longtime senior fellow in the Program for Research on Religion at the University of Pennsylvania and founder and chief executive officer of CHILD USA, a nonprofit think take dedicated to protecting children from abuse.

“The truth-seeking function of filing a lawsuit is sidelined, and the only issue that winds up being part of the discussion is, ‘How much money can we, the debtor, save by filing for bankruptcy?’ ” she said.

Assessing the claims, San Francisco plaintiffs attorney Mary Alexander said, also becomes a function of categorizing and counting different kinds of abuse “rather than actual harm,” and overall seeing “a huge case” turn “into a little tiny settlement.”

It’s also “taking away from their ability to find out what really happened — who at the church was responsible or at the school — and in exchange for a two-to-three-year delay and for far less money,” Alexander said. “And it’s still going to be the insurance companies that are paying.”

Months, likely years, will soon be spent fully assessing church assets and vetting claims to determine how church funds should be divided among the survivors.

Attorney Adrienne Moran, whose Santa Rosa law firm has long represented the Santa Rosa Diocese, said bankruptcy is a way to make sure whoever is first in the door doesn’t take everything and leave nothing for the rest.

“The purpose of filing for the bankruptcy is really to make sure that all of the survivors get a fair and equitable settlement,” Moran said, “and to ensure that Plaintiff No. 1, who might go to trial, doesn’t get all of the reward and then leave nothing for the remainder of the survivors.”

Santa Rosa Bishop Robert Vasa said the diocese really had no choice, given what he said were limited diocesan assets and “the overwhelming number of sexual abuse lawsuits filed against the diocese.”

Bankruptcy additionally would short-circuit the 2019 state legislation that expanded the time for survivors of childhood sexual assault to file civil cases.

Previously, child sex abuse survivors could file suit in California until they turned 26. The 2019 legislation, AB-218, raised the age cap to 40 and opened the three-year window for those 40 and older to file suits for childhood abuse.

But bankruptcy is a federal court proceeding, which supersedes state law, and would foreclose future claims for actions that occurred before the bankruptcy.

That means no one, even those under 40, would ever be able to sue the diocese again for past abuse, attorneys said.

“I’m sure that’s part of the reason they’re going into bankruptcy,” said Rick Simons, an East Bay plaintiffs attorney, who serves as liaison counsel for the Northern California cases generated by the three-year window, all of which are being coordinated through the Alameda County Superior Court.

“One thing the bishop wants to avoid,” said Sacramento attorney Joseph George Jr., “is to get sued two years from now and four years from now and seven years from now. They want to end this.”

The diocese, which runs from Petaluma to the Oregon border and includes 41 parishes and more than 178,000 parishioners, already had paid out more than $33 million in clergy abuse claims over the past three decades, some of it paid through insurance.

At least a third of the total went to settle cases from a one-year look-back window opened in 2003 that left the diocese in debt, Vasa said. New claims would quickly wipe out what’s been set aside since, he said.

“Bankruptcy is a necessity,” Vasa said.

Survivors and their lawyers, however, view the move as a cynical effort to avoid the disclosures necessary during civil litigation, allowing the diocese to protect long-held secrets that might otherwise be revealed through sworn depositions or documents.

But Moran and Vasa said all the reports and documents related to accused priests, most of them accused in the past, already have been turned over to attorneys that handle these cases.

“These cases have been the subject of litigation for over 20 years,” during which the diocese has supplied all the priests’ files and written documents it has, Moran said.

“There’s nothing new here,” she said. “Everything has been disclosed by us. Depositions have been previously taken. All of the information’s out there. So that claim is false.”

But critics argue there still are individuals who could be deposed under oath in the new cases.

The Santa Rosa Diocese has long had been poorer than larger, wealthier urban dioceses, Simons said.

The diocese lost coverage from a major insurer when the company went into receivership in 2011, as well, he said.

Thirty-two Roman Catholic dioceses, archdioceses and brotherhoods in the United States and U.S. territories have sought cover through bankruptcy court.

The Archdiocese of Portland was the first, filing Chapter 11 in 2004 as trial was to begin in two of cases against a deceased priest, with about 60 additional claims pending against him and other clergy, according to news accounts. The archdiocese emerged 2½ years later with a $75 million plan to settle 177 child sex abuse claims.

Two California dioceses, including Stockton and San Diego, also are among those to have sought Chapter 11 protection.

Stockton’s final bankruptcy plan, released in 2017, called for $15 million to settle cases with 27 survivors.

But the larger San Diego Diocese, which filed a decade earlier, withdrew under pressure from a U.S. Bankruptcy judge who found its accounting “disingenuous.” The church was criticized for undervaluing real estate holding and withholding other information, according to news accounts and attorneys.

The judge threatened to dismiss the case if a settlement could not be reached, resulting in an agreement to pay $153 million to settle 111 cases involving clergy and $30 million for 22 cases involving other officials or members of Catholic orders.

Attorneys say the Santa Rosa Diocese’s finances will be scrutinized just as closely, particularly actions concentrated in 2017 to independently incorporate individual parishes and other entities within the diocese, in an apparent effort to separate assets.

Vasa said he had intended since assuming his post in 2011 to follow a century-old edict from the Vatican to ensure church entities were legally identified under civil law in a manner that mirrored their standing under canonic, or Roman Catholic, law.

“It is not shifting control,” he said. “It is incorporating into civil law that which is already canonical reality.”

But plaintiffs’ attorneys have seen these actions before and say they’re on the lookout for transferred assets and restricted gifts that could shrink the legitimate size of diocesan assets that could be used for abuse survivors.

Mike Reck, a lead West Coast attorney for Jeff Anderson & Associates, said the recent incorporation of parishes as independent entities, for instance, conflicts with the hierarchical structure of the church, in which the bishop controls all.

“The reality is this organization is a top-down, military-style organization, where power flows from the top down and money flows from the bottom up,” Reck said.

He and other attorneys said the diocese will instead attempt to play “a corporate shell game” with parishes and other sub-entities to suggest church assets are off-limits to the diocese.

“It’s really no surprise that they’re going to transfer and hide assets the same way they transferred and hid child molesters,” Simons said.

A 2020 review by Bloomberg Businessweek of 15 years of court filings by church defense attorneys and plaintiff’s lawyers identified what it said was $2 billion in assets that the U.S. Catholic Church shielded from survivors during bankruptcies.

Vasa said it doesn’t matter what his critics say.

The parishes pay for their own upkeep, maintenance and repairs and already had title to their properties and any money in their accounts.

He said that after the 2003 look-back window, the diocese was left in debt, with few assets remaining.

One settlement of $11,365,000 in 2005 was used to resolve 10 lawsuits filed during the window.

The diocese two years later settled with five survivors of defrocked Rev. Xavier Francisco Ochoa for $5.02 million, in part through the sale of a large orchard on Montgomery Drive adjacent to St. Eugene’s Cathedral, where the historic Maria Carrillo Adobe stands.

Since that era, “the diocese had precious little left other than some cash assets that had been accumulated in reserve funds that have accumulated over the last 20 years, and that’s gone, and that’s fine,” Vasa said. “But I don’t have the right to seize properties of the parishes.

“People can say whatever they want about me and about this situation, but it’s a fiscal reality,” he said. “Our audit is also out there on the web site. People can see for themselves we operate on a very skeleton crew and a skeleton budget, and we simply don’t have the resources to cope with the magnitude of this event.”

You can reach Staff Writer Mary Callahan (she/her) at 707-521-5249 or mary.callahan@pressdemocrat.com. On Twitter @MaryCallahanB.