Hundreds of recently filed sexual abuse lawsuits could lead to the bankruptcy of the Catholic diocese of Sacramento, the diocese’s bishop said in a letter to the congregation this week.
The diocese’s financial situation stems from a law signed into law by Governor Gavin Newsom in 2019 that temporarily lifted the statute of limitations on child sexual abuse lawsuits. The law extended the age at which victims could bring civil lawsuits for abuse to 40 years. It had been 26 years.
The law also opened a three-year period for victims of any age to file lawsuits. The window closed on December 31, 2022.
As a result of the law, more than 200 lawsuits have been filed against the diocese alleging child sexual abuse, 80% of which stem from abuse that occurred in the 1980s or earlier.
By the end of 2022, more than 2,000 lawsuits had been filed against the Catholic Church statewide.
“Learning of this staggering number of claims is truly heartbreaking,” Bishop Jaime Soto wrote. “These claims represent real people whose lives have been damaged by the sins of individuals they were taught to trust.”
Soto said he was committed to resolving all claims fairly, but acknowledged the issues that could arise.
“Given the number of claims that have been made… resolving them may exceed the diocese’s financial resources available to meet such claims,” he wrote.
“This financial challenge is unlike anything we have faced before. I need to consider what options are available to us should the diocese become insolvent.”
The lawsuits filed against the Diocese of Sacramento and other Northern California dioceses are being reviewed by an Alameda County judge, and the claims process is still in its early stages, Soto said.
But the Diocese of Sacramento is responsible for paying debts from a fund designated for that purpose, and Soto expects it will have to sell some of its assets.
“Very little insurance coverage is left to cover abuses over the decades,” the diocese said on its website, and financial help from the Vatican “is not an option.”
“There are no Vatican funds available to us in this situation,” the diocese said.
One option, Soto said, would be for the diocese to file for Chapter 11 bankruptcy, which would allow it to operate while it tries to pay out the rest of the lawsuits.
“Importantly, in the context of a diocesan bankruptcy, victims of clergy sexual abuse would be represented in bankruptcy proceedings and a fund would be established to be distributed as fairly as possible,” Soto said.
Without it, Soto said, the first cases to go to court leading to damages could devastate the diocese financially, leaving the remaining plaintiffs with nothing.
“We are in this situation because of serious sins committed by individual priests … and a smaller number of lay people in the diocese,” the diocese said on its website. “It’s these evil deeds that brought us to this place – not the victims of sexual abuse who seek justice.”