Wednesday, July 17, 2024

Diocese Not Liable in Bankruptcy for Sex Abuse Without Agency Relationship with Abuser or Abuser's Institution

In In re Roman Catholic Diocese of Rockville Centre, New York, (SD NY, July 15, 2024), a New York federal district court affirmed a bankruptcy court's dismissal of appellants' claims that they were sexually abused as children by clergy and staff at religious institutions in the diocese's territory. The court said in part:

... [T]o adequately assert state law tort claims, Claimants must plead that the Debtor had some control over the abusers or the religious institutions where the abuse occurred....  In other words, Claimants were required to plead the existence of an employment or agency relationship between the Diocese and the alleged abusers, or an agency relationship between the Diocese and the religious institutions.   

The bankruptcy court properly determined that Claimants offered no non-conclusory allegations to support either theory of liability....

The bankruptcy court correctly observed that “the Free Exercise Clause and Establishment Clause of the United States Constitution bar courts from interpreting issues of religious Canon Law to resolve disputes.”...  Instead, “the claimants must show that an employment or agency relationship existed between the Debtor and abuser or Religious Institutions/Orders, based on facts relevant to those theories as they are normally established in the secular context.”... [T]he resolution of the issue presented in this case ... does not, however, depend upon any interpretation of Canon Law that would violate the First Amendment.  Here, Claimants fail to state a claim because the allegation that the Diocese revoked the faculties of one abuser accused in connection with a claim that is not at issue in this appeal is insufficient to plausibly allege that the specific abusers at issue here were employees or agents of the Diocese, or that their institutions were agencies of the Diocese.... [A]n allegation that the Diocese hired, fired, supervised, or disciplined an individual not at issue in this appeal does not support an inference that the Diocese has the power to control all clergy or staff at Catholic institutions within its geographic territory or exercised that power over any specific abuser in this appeal....