This Has Huge Implications for the Catholic Church

A federal bankruptcy judge yesterday ruled that churches and schools in the Catholic Diocese of Spokane are owned by the diocese and can be sold to pay settlements to sex-abuse victims, a decision that evoked both triumph and disappointment.

The decision — the first of its kind in the nation — is considered a victory for victims and a loss for the diocese and its 80-plus parishes, which had argued that the properties belong to individual parishes, not to the diocese, and therefore were not subject to liquidation.

The ruling likely will be watched closely by other dioceses around the country as they, too, resolve claims of people who were sexually abused by priests.

"This is a big victory," said attorney Michael Pfau, who represents many of the plaintiffs in Spokane, where one in five residents is Catholic. "It's simply a devastating ruling for the diocese."

The diocese plans to appeal by the end of next week.

"I'm obviously disappointed," said Shaun Cross, bankruptcy attorney for the diocese.

Ford Elsaesser, attorney for an association of Spokane parishes, said they, too, likely will appeal.

Plaintiff Mark Mains of Edmonds, who said he was abused by a Spokane priest when he was young, said trying to omit parish property from a list of diocesan assets was an attempt by Bishop William Skylstad to avoid responsibility.

"I feel for [the parishioners]. I really do. But we never asked for this," he said, referring to himself and other victims. Skylstad "voluntarily put ... this stuff at risk. It's not our doing. It's the bishop's doing.

"I didn't ask to be raped, or my wife to be deposed about our sex life, or my old girlfriends to be hunted down, harassed," Mains said. "I didn't ask for any of that."

Although yesterday's ruling by U.S. Bankruptcy Court Judge Patricia Williams technically involves only about 20 Spokane parishes and their affiliated schools, the decision essentially makes it easier for attorneys to push for the other diocesan parishes and properties to be made available for claims.

"In theory, all the property of the diocese could be liquidated," Pfau said.

The diocese faces 19 pending lawsuits from 63 plaintiffs seeking about $75 million, and other plaintiffs may yet come forward, Cross said.

In its initial bankruptcy filings, the diocese said it owned $11 million in assets. Cross said diocesan officials don't know how much the parishes are worth.

In her ruling, Williams tackled thorny church-state issues that are being closely watched nationwide. Among the most important: whether civil law would trump church law on the issue of who owns parish property.

Under Catholic Church law, individual parishes own their property. And while the bishop holds legal title to parish property and schools, the church considers such property to be held in trust for the benefit of parishioners.

The diocese argued that any decision to the contrary would violate the church's First Amendment rights in that the state essentially would be forcing the bishop to violate church law.

In her ruling, though, the bankruptcy judge said Skylstad had voluntarily entered into bankruptcy court. She said that though the dispute did involve a church, the case was not an internal church dispute and therefore civil law took precedence.

Further, she said it was not a violation of the First Amendment to apply federal bankruptcy law or state law to determine what property the diocese owns.