WILL THE CATHOLIC CHURCH REACH A GLOBAL SETTLEMENT WITH ALL ABUSE PLAINTIFFS?
Why It Might, And Might Not, Happen

On Saturday, it was reported that the Archdiocese of Boston had canceled a tentative settlement with 86 abuse plaintiffs represented by a single attorney. The collapse of the settlement talks is potentially the harbinger of a new and more dangerous twist in the legal travails of the Catholic Church.

What May Have Happened to the Boston Settlement

The Boston settlement was reportedly negotiated and approved by Cardinal Bernard Law, and then withdrawn under pressure from the finance committee of the archdiocese. The offer was, by all accounts, a reasonable one: between $15 and $30 million to settle many of the claims brought by alleged victims of Father John J. Geoghan.

Since Geoghan has already been convicted of abusing a ten-year-old boy in criminal court, one might think that the Church would have little appetite for litigating any case connected with him. But a closer look at the factors involved in the decision to reject the settlement shows that, in some respects, the Church in Boston, and perhaps other dioceses as well, are facing choices not unlike those faced by mass tort defendants in the past - choices that make any partial settlement problematic.

As with other mass torts, settlement of all cases is a desirable goal for plaintiffs and defendants alike. Yet the unique dynamic of mass tort litigation often drives the both sides to the litigation into a lose-lose situation. In the context of the abuse scandals in the Church, there are three reasons why this is so.

The First Major Problem with Settlement: Disparate Negligent Supervision Facts

First, there is the liability question. In most of the news reports about lawsuits against "the Church," the claim is almost always for negligent employment or supervision. This kind of claim is likely to be at the heart of almost any suit against the Church for alleged abuse by clergy.

There are a few RICO claims - that is, allegations of patterns of criminal behavior in violation of the Racketeering-Influenced Corrupt Organizations Act - in a handful of states. (The first such claim was brought in 1996 in New Jersey). However, these are really parasitic on the underlying negligent supervision claim.

It is unlikely that in any jurisdiction, including Massachusetts, the intentional torts of a priest or lay worker in the Church's employ would be attributed to the Church under the doctrine of respondeat superior (which makes an employer liable, under some circumstances, for the acts of its employees). As a result, plaintiffs will generally required to show not just the fact of the abuser's employment with the church, but also the Church's own negligence. Accordingly, the thrust of the lawsuits against the various dioceses and individual Cardinals, like Cardinal Law, is that they were negligent in their control of predatory priests like Geoghan.

In the last 25 years the law surrounding negligent employment and supervision has expanded tremendously. Now school districts may be held liable for the intentional torts of their teachers, and stores may be held liable for the intentional torts of their security guards, as long as the plaintiff can show that relevant manager was on notice of the employee's tortious tendencies.

The diocese of Boston may feel that, with 140 pending case and many more threatened, they may want to look more carefully at those cases in which they feel their supervision was indeed negligent, and those in which they believe it was not. Obviously, any such inquiry will delay or possibly derail a potential global settlement of all case.

There are risks to trying to defend a negligent supervision case, as the Dallas Archdiocese discovered in 1997. The church took to trial a suit of negligent supervision in the case of Rudy Kos, a priest who received three life sentences for child molestation. The diocese's defense in the civil suit was that Kos was a "smart sociopath" who hid his activities from his superiors. But the jury rejected that argument. It awarded $120 million in damages against the diocese. (However, the diocese later settled with the plaintiffs for $31 million once it pointed out that it did not have enough assets to cover the award.)

The Church enjoys a charitable immunity of $20,000 per case in Massachusetts. Yet it is not clear if they can afford the public relations fallout if they invoke this immunity after a jury hits them with a large verdict. Indeed, so far they have said they will not hide behind their statutory immunity.

The Second Major Problem with Settlement: Early Settlements Hurt Later Ones

Second, early settlement with some plaintiffs often makes settlement with later plaintiffs prohibitively expensive. Even if the Church's lawyers can predict with accuracy which cases they might win and which they might lose, they might not have enough money to pay all meritorious claims if they pay out "too much" now. Robert Morrissey, a lawyer and a member of the Boston diocese's finance council, said as much when he argued that it wouldn't be "fair" to use "such a large portion" of the diocese's assets for 86 plaintiffs when the diocese might be facing up to 500 or more suits.

Of course, fairness takes on a very unusual meaning in a mass tort when there are limited resources. In asbestos, for example, the lawyers for the defendant corporations often complain that it is not fair that certain groups of plaintiffs (those who sued first, or who sued in more favorable jurisdictions, or who had better lawyers) "feasted," while other plaintiffs have to make do with the scraps left behind after corporate bankruptcy.

The reply by plaintiffs' attorneys is twofold: First, the defendant corporations should have spent less on defense lawyers and more on paying victims. Second, the obligation of every plaintiff lawyer is to her own client, not towards ensuring equity for another lawyer's client.

Is the comparison with asbestos appropriate? Is there a chance that some diocese, such as the Boston diocese, could lack sufficient assets to provide for "adequate" settlements to all deserving plaintiffs?

The diocese is very secretive about its wealth - and that wealth is likely to be the only source of compensation for plaintiffs. It seems clear that the diocese's insurers will not cover much of any future negligent supervision judgements or settlements. That is partly because the policies will not cover liability based on allegations that the diocese had prior notice of its priests' wrongdoing.

In the end, none of the figures just mentioned may be enough. In 1985, a report commissioned by the Catholic Church estimated that total liability for abuse cases could total $1 billion nationally. Given how much more information has emerged about the extent of the abuse that has and may still be occurring, the share of a large urban diocese like Boston could be staggering.

The Third Major Problem with Settlement: Settlements Haven't Helped So Far

The third factor that makes the Church currently wary of partial settlements is that settlements have not really helped it up to now. In fact, one might argue that for a variety of reasons, the Church has been ill-served by its current strategy of settlement.

One notable feature of the approach the Church has taken to abuse litigation in Boston and around the country is its aggressive use of confidentiality agreements with settling parties. Often a defendant will extract from the settling plaintiff a promise not to speak to the press, and even a promise to request from the judge presiding over the case that the complaint be sealed. Judges usually permit settlements with these terms - partly under the theory that if both parties ask for these terms, then no one is harmed if they are granted.

It has been pointed out in products liability cases that settlements that include confidentiality agreements may harm innocent third parties-namely, other consumers who would have been alerted about earlier complaints concerning the product. Confidentiality agreements between Firestone and some settling plaintiffs have been criticized on just these grounds. Naturally, this criticism has also been raised with regard to the use of confidentiality agreements in abuse cases.

Buying a victim's silence through a settlement might also hurt the Church as well. First of all, by not facing the full weight of a trial and judgement, the Church may not fully appreciate how badly it may have handled a particular dangerous priest or lay worker.

Second, the real danger to the Church is that once its practice of settlement through confidentiality agreement is discovered by the media, nothing it does when it attempts to settle will be seen as anything other than an attempt to whitewash a larger problem.

Indeed, that is exactly what is happening now. Technically, a settlement does not count as an admission by either side. Nevertheless, any settlement will be seen by the larger community as not only an admission of liability, but an attempt to evade responsibility.

The Church's earlier practice of aggressively settling cases and securing confidentiality agreements has, in my opinion, come back to haunt it. Not only are juries in new cases incensed when they hear about it, it seems to have provoked new litigants into coming forward.

Why the Church Needs A Global, Not a Piecemeal, Settlement

Given the three considerations outlined above, it is easy to see why the Church might not see piecemeal settlement as an alternative anymore. It did not work in the asbestos context, and it will probably not work here.

What the Church needs, instead, is a "global"settlement-one that insures that if it admits liability for negligent supervision to any one plaintiff, it will be able to settle with all possible plaintiffs. A global settlement would probably be in the best interest of the victims as well, since it would insure that there would be enough money for all victims and that it would be spread equitably among them.

The problem with achieving a global settlement is that it is very hard for a court to guarantee. The Supreme Court struck down global settlements in asbestos, and just last week the Wall Street Journal reported that the global settlement achieved in the German Slave Labor cases is being challenged by plaintiffs who feel that it is unfair to them.

Indeed, the only global settlement that might achieve what it was set out to do is the September 11 Victims Compensation Fund, and that was the result of Congressional legislation (and Congressional largesse). In the Church's situation, is the U.S. Congress willing to take the political heat and impose-on the victims of sexual abuse--a limitation on the right to sue that is currently guaranteed to them by state law? I don't think so.

Instead, there will probably be a downward spiral of big awards followed by big settlements followed by an steady increase of new suits. Eventually the Church will run out of money, leaving some of the most injured victims with nothing; leaving some lawyers having done very well for themselves; and, in the end, providing no closure to the whole sordid tale. It will be asbestos all over again.