Rockville Centre diocese faces bankruptcy amid abuse lawsuits

CNA Staff, Jun 15, 2020 / 16:41 pm

The Diocese of Rockville Centre has requested a pause in the proceedings of numerous sex abuse lawsuits it is facing, and said it may have to declare bankruptcy if it is not granted.

Two fellow New York dioceses, Buffalo and Rochester, have filed for bankruptcy within the last year. Each diocese had been named in hundreds of clergy sex abuse lawsuits following the opening of a window in the statute of limitations in the state in cases of sexual abuse under the Child Victims Act.

Sean Dolan, director of communications for the Rockville Centre diocese, said it had requested "a stay pending an appeal of the court's denial of its motion to dismiss approximately 35 cases." He said the request reflects the diocese's "dedication to the fair and just treatment of all abuse victims, rather than continuing on a course that is marked by exhausting litigation expenses for the benefit of those racing to the courthouse ahead of others."

Since the Independent Reconciliation and Compensation Program was established in 2017, he said, the diocese has given over $57 million to 320 victims of sexual abuse. It also has pending offers or is actively investigating another 50 claims, he added.

He said the diocese is expecting proceeds from its insurance policies to contribute to compensating victims. But the diocese has yet to be reimbursed for the large legal costs of lawsuits filed under the Child Victims Act.

"Because of that, and the additional strain on its finances resulting from the COVID-19 pandemic, the Diocese does not have the resources to continue litigating the nearly 100 pending cases through to judgment. What is more, insurance will not, as a matter of law, cover punitive damages sought by 74 of these plaintiffs that, if awarded, would likely total in the hundreds of millions of dollars," he said.

"If these actions are not stayed pending appeal, the substantial sums that the Diocese will have to expend in continuing to litigate these actions will be unavailable to survivors."

The Diocese of Rockville Centre said that while bankruptcy is a last resort, the diocese could pursue such action, noting that the request for a pause will help victims rather than shield predators. 

"The Diocese's stay motion is not an attempt to turn its back on victims or shield predators from any punishment they deserve," Dolan said in a May 29 statement.

"The Diocese may have to seek such protection to preserve value so as to enable it to carry out its mission of supporting the Catholic faith on Long Island, while ensuring that all survivors receive fair settlements," he said.

Michael Dowd, a lawyer for alleged victims, called the prospect of bankruptcy "callous," the New York Post reported.

The diocese serves over 1.4 million people in New York's Nassau and Suffolk counties. Since the coronavirus quarantine closed Mass and other Church gatherings, the diocese said it has received far fewer tithes, including two weeks which had no donations at all.

According to the New York Post, the diocese said donations during Holy Week and Easter this year were down 60% from normal.

Because of the lack of the pandemic, the diocese is in an "ever-more serious financial situation," which has continued to worsen under strenuous legal costs, the New York Post reported.

The state's Child Victims Act, which provides a one-year window to file lawsuits against decade old cases of sexual abuse, was extended for five months by Gov. Andrew Cuomo because of court delays caused by the coronavirus.

In May, a New York judge rejected a suit filed by the Diocese of Rockville Centre that claimed the lawsuits are barred by the due process clause in the state constitution. It said the due process clause in the state constitution "allows the legislature to revive formerly time-barred claims only where they could not have been raised earlier," which it adds "is not so here."

"The court finds the Child Victims Act is a reasonable response to remedy the injustice of past child sexual abuse," Justice Steven Jaeger of the New York Supreme Court in Nassau County wrote in his May 13 decision. "Accordingly, it does not violate defendant diocese's right to due process under the New York State Constitution."