Federal judges remand 100 sex abuse claims against the Diocese of Rockville Centre to state courts

Despite the recent deadline issued by U.S. Bankruptcy Judge Martin Glenn, giving the Diocese of Rockville Centre until Oct. 31 to try to resolve the nearly 600 child sex abuse claims against it, two federal district court judges ordered this month that 100 of the cases be sent back to state courts.

On Aug. 10, U.S. District Court Judge Gary R. Brown ordered 42 of the nearly 224 cases in the Eastern District of New York to be remanded from bankruptcy proceedings to state courts, having shown little progress toward a solution over the past three years.

“Critics of the law have long decried unimaginable delays and costs that can arise from excessive litigative wrangling,” Brown stated in his order. “Such waits can range from the intolerable to the unconscionable.”

Following Brown’s decision, U.S. District Court Judge Joan Azrack ordered on Aug. 17 that an additional 58 cases be remanded to state courts, based on Brown’s decision.

That leaves 124 cases yet to be decided, while roughly 400 remain in federal bankruptcy court.

Attorneys representing the nearly 600 claimants — also known as the Committee of Unsecured Creditors — said they agreed with Brown’s decision and his characterization of the diocese and its lawyers’ conduct.

“It is absolutely consistent with how we have viewed their conduct for quite some time,” James Stang, the committee’s bankruptcy counsel, said. “If they think they’re going to beat down survivors by putting them through the litigation meat grinder, it’s not going to work.”

Stang added that while he encourages the diocese to continue to try to reach a resolution with the creditors, he doesn’t believe it will do so in time.

Sean Dolan, the diocese’s director of communications, said that the diocese was “disappointed” with Judge Brown’s ruling and disagreed with his description of its conduct.

“The diocese continues to believe that a single, unified, federal forum will provide all parties the best opportunity to efficiently resolve claims for the benefit of all survivors and the diocese will continue to work towards that goal,” Dolan stated in a release. “As the diocese has consistently said throughout this bankruptcy process, piecemeal litigation in federal and state court will be time-consuming and expensive, will only reduce the resources available to compensate survivors, and risks leaving some survivors with no compensation at all.”

Dolan added that the diocese planned to continue to petition to try all of the cases in U.S. District Court for the Southern District of New York, which encompasses Manhattan, The Bronx, Westchester, Putnam, Rockland, Orange, Dutchess, and Sullivan counties.

“The unsecured creditors committee contends that the diocese has been dragging out the case and preventing survivors from receiving compensation,” he said. “This is not true.”

He also indicated that the Syracuse and Rochester dioceses referenced in the footnotes of Brown’s ruling both filed for Chapter 11 bankruptcy protection before Rockville Centre and only recently announced their global settlements.

Dolan said that the Rockville Centre diocese would continue to work toward a consensual settlement on or before Oct. 31, Glenn’s deadline, and that “this would provide compensation for survivors quicker than other dioceses, even with the added size and complexity of the Diocese of Rockville Centre’s case.”

The diocese filed for Chapter 11 bankruptcy on Oct. 1, 2020, as a result of the hundreds of lawsuits that were filed against it when then Gov. Andrew Cuomo approved the Child Victims Act in 2019, extending the statute of limitations on sexual abuse claims.

In the almost three years since the diocese and the committee have been unable to agree on a reorganization plan.

In January, the diocese was presented with two potential plans. The first would settle all claims for $450 million in restitution, while the second would involve the diocese’s parishes, which the committee’s attorneys say they believe have “substantial assets” and should be made to provide “fair compensation to the children they hurt.” Under both options, survivors would be able to continue to pursue abuse claims in state court.

The diocese turned down both proposals and made a counter-offer, proposing that it, along with its parishes, co-insured parties and other ministry members, would contribute between $185 million and $200 million to a settlement, not including insurance payouts.

The committee and its attorneys described the diocese’s offer as “business as usual,” stating that it would provide only a minimal contribution from its parishes and affiliates despite the hundreds of claims against it and that it largely relied on potential insurance payouts that are being disputed in four separate lawsuits.

According to Newsday, the proceedings have racked up about $100 million in legal fees so far — money that the committee’s attorneys argue could have gone to the survivors.

Due to the unlikelihood of an agreement, representatives of the claimants’ committee requested in April that Glenn dismiss the case. But Glenn said that since the attorneys could not definitively say they would not be able to reach a deal within a “reasonable amount of time,” he extended the deadline to Oct. 31.

Glenn has also expressed his skepticism regarding a settlement, stating that every day of delay would not only prevent survivors from pursuing recovery of their claims but also weaken their ability to prove the underlying case.

“For many survivors, allowing time to pass means that they simply may not be able to recover, either because the evidence for their case is lost or because they themselves do not live long enough to press their claims,” he said. “It is clear that these harms to the survivors become more significant with each passing day in this case.”