A federal bankruptcy judge has again blocked 36 people who say they were sexually abused from pressing ahead with Child Victims Act lawsuits against Catholic parishes and schools.
Chief Judge Carl L. Bucki of the U.S. Bankruptcy Court in the Western District said in a written ruling this week that allowing the state litigation to move forward “would become an inherent distraction that promises to complicate negotiations” among the parties involved in the Diocese of Buffalo bankruptcy reorganization.
Bucki agreed with the diocese’s request to extend an injunction prohibiting litigation by 36 plaintiffs against parishes and schools until next August. He also ruled that the plaintiffs were free to continue litigating against individuals who may have abused.
The diocese’s lawyers had argued that if any CVA cases against parishes and schools advanced in the state courts, it would inevitably involve the diocese in costly litigation and drain assets that otherwise would be used in settling with childhood sex abuse victims.
Bucki acknowledged that the diocese’s bankruptcy case was “extremely complicated,” with more than 900 people seeking damages for abuse claims and continuing litigation within the proceedings over the scope of insurance coverage for more than 5,000 policies issued by at least 70 carriers.
“At this time, piecemeal litigation against some parishes will further entangle an already knotty situation and threatens to impair efforts to achieve a global resolution of claims for child abuse,” Bucki said. “As long as the debtor shows a continuing effort to address these complexities in good faith, we ought to avoid needless impediments to the development of a confirmable plan.”
The CVA plaintiffs cases against parishes and other Catholic affiliates will remain on hold, and Bucki left open the possibility for the 36 plaintiffs to request that the extended stay be limited or modified.
The committee of unsecured creditors – seven people with child sex abuse claims against the diocese who represent the interests of more than 900 sex abuse claimants in the bankruptcy – supported the diocese’s request for a stay extension, albeit for a shorter time, 90 days.
Without it, their lawyer warned that there would be a race to the courthouse that would result in large awards for a small number of victims and quickly deplete parish and insurance assets.
The committee made a deal last year to support stay protections for parishes and other Catholic entities, as long as the diocese turned over tens of thousands of pages of internal documents.
Most plaintiffs' attorneys went along with the deal, except for the Lipsitz Green Scime Cambria firm, which has mounted an aggressive effort to have its 36 plaintiffs' cases against 28 nondiocese Catholic entities heard in state courts.
Amy Keller, a lawyer with the firm, had argued that the inability to push ahead with claims against Catholic parishes and schools was contrary to the purpose of the Child Victims Act and prevented clients from pursuing justice.