San Diego Diocese Considers Bankruptcy Due To Pending Abuse Claims

SAN DIEGO COUNTY, CA — Parishioners were told Sunday that the Diocese of San Diego was considering filing for bankruptcy because of the "staggering legal costs" as the diocese faces new lawsuits alleging sexual abuse of minors in years past.

The new lawsuits were emerging because of AB218, the state lawmakers passed this assembly bill in 2019 removing the statute of limitations for childhood sexual abuse cases and giving victims a three-year window to file lawsuits.

The diocese told churchgoers that it was dealing with an estimated 400 suits seeking monetary damages for alleged acts of sexual abuse involving the church, the station reported. The church told people that none of the lawsuits involved people who were currently in the ministry.

A letter read to parishioners that filing bankruptcy would ensure that the assets of the diocese would be used equitably to compensate all victims of sexual abuse and provide a fund for future claimants of sexual abuse who have not filed a claim.

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The contents of the letter from Cardinal McElroy follows:

Dear Brothers and Sisters in Christ,

Three years ago the California state Legislature lifted the statute of limitations for lawsuits regarding the sexual abuse of minors. This provided three years for individuals to come forward with legal claims that they had been sexually abused.

As a result of this change in the law, the Diocese of San Diego has received approximately 400 suits seeking monetary damages for alleged acts of sexual abuse by priests, religious and laity in the Diocese. The majority of these suits concern actions that took place more than half a century ago.

One important aspect of these lawsuits is that none of them claim sexual abuse by any priest of the Diocese of San Diego currently in ministry. This reflects the reality that the Church has taken enormous steps to root out the sexual abuse of minors in its life and to promote the protection of minors.

Still, the Diocese must face the staggering legal costs of responding to these new lawsuits. In 2007, the Diocese paid out $198 million to settle 144 claims of abuse that been brought during an earlier lifting of the statute of limitations. This depleted most of the assets of the Diocese.

Even with insurance, the Diocese will not be able to pay out similar sums now. This challenge is compounded by the fact that a bill has now been introduced into the Legislature that seeks to eliminate the statute of limitations entirely, leaving the Diocese vulnerable to potential lawsuits forever.

For all of these reasons, we may be facing a moment where the Diocese enters into bankruptcy in the coming months. 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 the marginalized.

It would also provide a fund for future claimants of sexual abuse who have not filed a claim. Finally, bankruptcy would provide a conclusion to the tide of lawsuits covering alleged abuse as long as 75 years ago.

The parish assets have been held in recent years by individual parish corporations, and before that they were held by the Diocese in trust for each particular parish community. Almost without exception in other diocesan bankruptcies, parish assets have remained separate. At the same time, parishes in a diocese undergoing bankruptcy typically contribute some limited monies to the funds for claimants.

The sexual abuse of minors by priests and the way it was handled in the life of the Church constitute the greatest sin of our Church in the last century. We must and will continue to protect minors with ever deeper vigor, provide healing resources to those who have been abused, and use our Diocesan assets to compensate those who were victimized. And we will never forget the harm that we have done.

I ask your prayers for our Diocese, our parish communities, and especially all victims of sexual abuse in the coming months. May God’s grace be with us profoundly in this challenging time.

With all best wishes, I remain
Sincerely yours in Christ,
Robert Cardinal McElroy
Bishop of San Diego

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