Chicago — The issue of whether the Catholic faith of a federal judge was the basis for a key decision he made in the bankruptcy of the Milwaukee archdiocese came under intense scrutiny Monday as a three-judge panel of the 7th Circuit Court of Appeals heard arguments.
Lawyers for claimants, most of them survivors of sexual abuse by priests, have asked the appellate panel to remove U.S. District Judge Rudolph Randa from the bankruptcy case and void his decision supporting the archdiocese’s transfer of more than $55 million to a fund for the perpetual care of cemeteries. They want the court to order that another federal judge in Milwaukee consider whether that money is fair game in the compensation of the survivors and other claimants.
“It has nothing to do with being a Catholic,” said lawyer Marci Hamilton of the request that Randa be replaced, adding that the concern was for “his endorsement of the religious faith.”
After Randa issued his ruling in late July 2013, lawyers for the bankruptcy claimants raised the question of whether he had a bias.
“We knew that Judge Randa was a Catholic but we did not undertake an investigation of his background,” said lawyer James Stang, who also represents the claimants. “It was only when we saw his opinion that the question was raised.”
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They asked Randa to recuse himself from the case — essentially rescind his decision and step aside — but he issued a written decision declining.
In his first decision, Randa referred to canon law and cited the Catholic belief in the resurrection and its teachings that the body ultimately reunites with the soul and deceased family members.
In that decision, Randa said that making the transferred funds available for the bankruptcy would violate the constitutional right to the free exercise of religion and the 1993 Religious Freedom Restoration Act, a federal law that prevents government from interfering with religious activities.
Randa’s decision overturned a ruling by the bankruptcy judge, Susan V. Kelley, that the fund was a part of the bankruptcy estate.
“The sacred nature of Catholic cemeteries — and compliance with the church’s historical and religious traditions and mandates requiring their perpetual care — are understood as a fundamental exercise of this core belief.” Randa wrote.
The lawyers checked a Catholic cemetery website used in genealogical research and found that both of the judge’s parents, his wife’s parents, his two sisters and an aunt and uncle were buried in one of the cemeteries. They also found that there were 15 others buried there with the Randa surname and that the judge had bought two plots in the cemetery 38 years earlier.
“There is an appearance of a lack of impartiality when six or seven of his closest relatives that we know about are buried there,” said Stang. “I would think it would make any objective person say that he’s got to be concerned about how the cemeteries are maintained.”
Brady Williamson, a lawyer representing the trust fund, said the lawyers for the other side knew from the outset that Randa was Catholic and should have challenged him earlier, not after the decision was issued.
One of the appeals judges, Claire Ann Williams, said she found the issue of whether Randa should have stepped aside “troubling” and noted that there are rules requiring judges to disqualify. The judge, not lawyers, needs to make the disclosure.
“If he had one relative buried in a Catholic cemetery, maybe he could say he forgot,” Williams said. “These are real issues.”
She also asked if the responsibility of priests to nurture their flock is a “core mission” of the church and how to balance that against the care of cemeteries.
The question of whether all of the money in trust is needed for cemetery maintenance was never explored, said Hamilton, because Randa’s ruling cut off questioning on the issue. Williamson, the lawyer for the other side, said the claimants could have tried to ascertain those facts but failed to do so.
Another issue raised in the appeal is whether the Religious Freedom Restoration Act Randa cited applies. Lawyers for the claimants argued it applies only to cases involving government and religious groups. The trust fund lawyer argued that the committee representing the claimants was established under the supervision of the bankruptcy court and was, therefore, operating “under the color of the law” making it equivalent to a governmental body.
The panel will also rule on a decision by the bankruptcy judge that a deaf man abused as a child by the late Fr. Lawrence Murphy, a notorious abuser, is barred from the settlement because he had agreed to a settlement in 2007. His lawyer, Jeff Anderson, argued that he was misled during a mediation settlement by the archdiocese’s “egregious deceit and misrepresentation.” Anderson acknowledged that his client could ultimately receive less than the $80,000 ** he received in mediation, far less than most other abuse victims received.
“The question here today is where we are going to reward these folks for making misrepresentations to this survivor?” Anderson asked.
Frank LoCoco,* arguing for the archdiocese, said the underlying facts of the settlement are the same today as they were in 2007 and that the fraud claim does not make it separate.
The archdiocese of Milwaukee cited the lawsuits surrounding the growing number of sexual abuse claims when it filed for bankruptcy in January 2011. About four years earlier, then-Archbishop Timothy Dolan, now cardinal of New York, moved millions from the archdiocese’s general fund to a fund that maintains the cemeteries. While Dolan has maintained the money was kept in an account within the general fund but was always separate, critics cited a letter he sent to the Vatican requesting permission to establish a separate trust. He wrote in the letter that a separate trust would protect the funds from litigation.
Kelley, the bankruptcy judge, has approved a disclosure statement as part of the archdiocese’s proposed reorganization plan that would create a $4 million fund to compensate victims — but only 128 of the 575 who have filed claims are eligible. A $500,000 fund to provide therapy for survivors would also be created. She has scheduled an October four-day hearing on the reorganization plan.
Lawyers for the archdiocese said the appeals would be moot if the reorganization plan is approved before the appellate decision is issued. It is unclear if the decision will be issued before the plan is approved.
In addition to Williams, the judges sitting on the appeals panel are Joel Flaum and U.S. District Judge Robert Dow of the Northern District of Illinois.
[Marie Rohde is a freelance writer based in Milwaukee.]
*An earlier version of this story had an incorrect name.
**An earlier version listed the incorrect amount.