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	Priest Sex Abuse Victims Get Hearing on Church Ownership Claims By William McCall Seattle Post-Intelligencer [Portland OR] December 4, 2005 PORTLAND, Ore. -- The first bankruptcy in the nation declared by a Roman Catholic diocese has raised a thorny question whose answer may have an enormous impact on any future claims by victims of alleged priest sex abuse - who owns the churches and the property they are standing on? Lawyers for the victims say it's the diocese. Attorneys for the Archdiocese of Portland say it is the individual parishes and Catholic schools. U.S. Bankruptcy Judge Elizabeth Perris will ultimately decide who owns church property - and on Tuesday she will hear the arguments of both sides. The case could set a precedent over whether federal law trumps Catholic doctrine when it comes to church property, according to legal scholars and some of the attorneys involved in the case. They say it was a gamble from the outset by Archbishop John Vlazny when he decided in July 2004 that bankruptcy was the only way to cover claims by alleged sex abuse victims while making sure that church doors remain open for nearly 400,000 Catholics in Western Oregon. Vlazny has insisted there was no other way to protect church property. "It was only when insurance companies failed to provide the financial support owed us and lending institutions would no longer make funds available to us that we had to seek bankruptcy protection," Vlazny said in a column published last month in the Catholic Sentinel to reassure parishioners. David Slader, who represents several victims, disputes the archbishop. He says the archdiocese had access to an investment fund worth more than $40 million that could have been used to settle pending claims. "If they had done that, there would be no need for filing bankruptcy," Slader said. "And it was unlikely the assets of the parishes and schools would ever have been in jeopardy." Now the archdiocese has dug in its heels. Like its attorneys, its archbishop argues the victims should not be allowed to go after the land and buildings that make up the physical presence of the church. "Plaintiffs' attorneys assert that everything that belongs to parishes and institutions of the archdiocese should be included in the estate and made available for settlements," Vlazny said in his column. "This is simply out of line with church law and practice. I could never release such assets for this or any other purpose." Howard Levine, an attorney for the archdiocese, says the laws of the Catholic church - canon law - should apply when deciding ownership. "Parish property is parish property," Levine said. In a brief he filed last month to prepare for the Tuesday hearing on the ownership issue, Levine cited a section of Oregon law that he argues "clearly requires that religious doctrine or practice be followed in the operation of a religious corporation if following state law would violate constitutionally protected church doctrine or practice." In other words, if the church has always treated parishes as individual property owners, so should a federal bankruptcy court. "The archdiocese didn't give up its constitutional rights when it filed for Chapter 11," Levine said in an interview with The AP. "The bankruptcy court cannot intepret canon law." The attorney who leads the "tort claimants committee" - the representative for alleged sex abuse victims who are now the creditors of the archdiocese in bankruptcy court - dismisses the argument. "On one level it sounds very complex and complicated," said Albert Kennedy, who has been involved in every phase of the case. "But in truth it isn't that complicated. Does the rule of law apply to the Catholic church? I think the answer is yes, of course. I don't think it would be a surprise to many people to find out that canon law is not the law of the United States." David Skeel, a bankruptcy law expert at the University of Pennsylvania, says it is a case destined for the U.S. Supreme Court. He noted that federal courts have sidestepped the issue in two other Catholic diocese bankruptcies filed after the Portland archdiocese. The Diocese of Tucson in Arizona emerged from bankruptcy in September after settling with victims for just over $22 million. The Diocese of Spokane in Washington state has offered to sell its headquarters and the home of its bishop under a reorganization plan filed in October, but the property issue was left unresolved. Skeel said the church has taken inconsistent positions on ownership in the past, noting the Archdiocese of Boston has acted like a property owner in deciding whether to close Catholic schools in the Boston area. "It's a tricky issue," Skeel said. "But it just seems to me that when it's relatively easy to use the secular property system to make clear to everyone who the owner is, that you ought to be required to do that."
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