San Diego Diocese May Face Bankruptcy Due to Clergy Abuse Lawsuits

The 400 claims against the Diocese came as a result of changes to statute of limitation laws in California which allowed the filing of clergy abuse lawsuits which would have otherwise been time-barred.

The Roman Catholic Diocese of San Diego indicates it may soon have to file for bankruptcy protection, as it faces about 400 clergy abuse lawsuits alleging it failed to address credible incidents and enable known predators.

On February 10, the bishop of the diocese, Cardinal Robert W. McElroy, published a letter to parishioners, announcing it is likely to file for bankruptcy as a growing number of claims continue to be presented after a 2019 California law extended the statute of limitations for child sexual abuse claims, allowing previously time-barred cases to be presented over the Diocese’s role in failing to prevent the assaults.

Similar laws have been passed in New York, New Jersey, North Carolina and several other states in recent years, with many of the resulting lawsuits being filed against the Catholic church for unaddressed clergy abuse claims that were covered up for decades.

According to the letter, the three-year window for previously time-barred filings resulted in about 400 lawsuits against the Diocese of San Diego. The Diocese noted it had to pay about $198 million in 2007 to settle only 144 claims of sexual abuse, indicating this depleted the Diocese’s assets and suggesting the cost to resolve these additional claims will be much higher.

“For all of these reasons, we may be facing a moment where the Diocese enters into bankruptcy in the coming months,” McElroy wrote. “Bankruptcy would provide a pathway for ensuring that the assets of the Diocese will be used equitably to compensate all victims of sexual abuse, while continuing the ministries of the Church for faith formation, pastoral life and outreach to the poor and marginalized.”

The Cardinal wrote that the bankruptcy would involve the creation of a fund for future claimants of sexual abuse who have not yet filed a claim, but did not say how big such a fund would be.

Widespread Child Sex Abuse In the Catholic Church and Boy Scouts

The legislation in California and other states came amid child sexual abuse problems throughout the Catholic Church and the Boy Scouts of America, who have faced tens of thousands of lawsuits as a result. The Boy Scouts, which maintained a list of sexual predators who served as volunteers or employees of the organization, known as the “perversion files,” was ultimately driven into bankruptcy by the allegations, and is still trying to negotiate a settlement which would move it out of bankruptcy.

Facing clear signs of massive liability, Boy Scouts of America filed for bankruptcy in 2020, to manage and resolve the mounting litigation, which has become the largest sex abuse case involving a single national organization in U.S. history.

In September, U.S. Bankruptcy Judge Laurie Silverstein, of the U.S. Bankruptcy Court for the District of Delaware, approved plans to create a $2.46 billion victim’s fund negotiated by abuse survivors, the Boy Scouts, insurers and some of the organization’s main backers.