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The Daily Record reported via BishopAccountability.org last week that the Roman Catholic Archdiocese of Baltimore will not seek charitable immunity as a defense against claims brought by sexual abuse survivors in its bankruptcy case, according to a stipulation filed Friday in U.S. Bankruptcy Court in Baltimore. The agreement also states the archdiocese will not assert charitable immunity in any future bankruptcy involving survivor claims.
Under the stipulation, the archdiocese also said it would not authorize its parishes or schools to pursue bankruptcy protection unless they likewise waive charitable immunity in cases involving survivor claims. The filing frames the move as a way to remove a major legal dispute that has slowed negotiations and mediation.
“Entering the stipulation now saves time and money, promotes judicial economy, and resolves a complex, legal issue obstructing progress in mediation,” Friday’s filing states.
“Saving time in this case is critical because it allows for a speedier process of recovery for the hundreds of Survivor claimants in this case,” it adds, “and a speedier process of reorganization and exit from bankruptcy for the Debtor.”
Charitable immunity is a doctrine historically tied to protecting charitable assets on the theory that donors intend their money to support a charity’s mission rather than litigation. In this bankruptcy proceeding, the issue became a flashpoint after the committee representing more than 900 survivors filed suit in April, arguing the archdiocese raised charitable immunity in bad faith and that asserting immunity could undermine the legitimacy of bankruptcy protection that blocks civil lawsuits against the debtor. The committee also asked the court to dismiss the bankruptcy if the archdiocese were deemed immune.
The committee pointed to statements by Baltimore Archbishop William Lori in which he said compensation for victims was part of the church’s core mission. The archdiocese has maintained it never formally invoked charitable immunity and instead referenced the doctrine’s existence, but it also opposed the committee’s lawsuit and asked a judge to declare the defense available under Maryland law.
The adversary lawsuit alleged “the Debtor asserted that the doctrine of charitable immunity provides a complete legal defense under Maryland law to the obligation to pay Survivor claims that are not covered, or to the extent the claim exceeds the limits provided, by third-party insurance.”
The archdiocese denied that “as stated,” but said that, “to the extent any tort claim exceeds or is otherwise not covered by the Debtor’s insurance, the doctrine of charitable immunity as provided for under Maryland law provides to the Debtor a complete legal defense to the claims asserted by Survivors.”
A three-day trial on the charitable immunity dispute, which had been scheduled to begin Monday, has been cancelled. A status conference is now scheduled for Jan. 5.
The filing comes as settlement negotiations continue. In October, the archdiocese said it would voluntarily contribute $33 million of its own funds toward a settlement even if it were deemed immune, and it expected insurance companies to contribute hundreds of millions of dollars. The survivors’ committee rejected that proposal and has sought a substantially larger figure, arguing a meaningful resolution must reflect the scope of harm and the church’s resources.
After a November hearing in which 10 survivors addressed the court, Lori said the archdiocese was working toward a settlement that provides “fair, equitable and just compensation.”
“From the very beginning, we have said we would put the resources of the church toward a settlement,” he said. “It is our desire to bring this to closure as soon as we can.”
The stipulation states the archdiocese still retains the right to assert charitable immunity for claims unrelated to sexual abuse and preserves other defenses to survivor claims. The archdiocese and the survivors’ committee declined to comment.
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