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Their rationale: the bishop's corporation manages property, not priests.
Plaintiffs across the country are encountering similar patterns of asset protection, as regional leaders divide church property among dozens if not hundreds of separate corporations, charities and other institutions. The Catholic Church in the U.S. may appear to be a monolithic religious corporation that manages its flock and money from the top down. But the church's fiefs operate as independently as fast-food franchises--and with less legal liability. Each diocese and the parishes within it are separately responsible for their financial affairs. Any one of these institutions could conceivably go broke in the face of big court judgments but almost certainly would not drag down the others.
That's dramatically different from the liability of, say, McDonald's, in which the company can be sued if a customer anywhere is scalded by hot coffee. The church's legal structure acts as a foil to any attack on the center. And ultimately, headquarters is the Vatican--a sovereign state that is effectively immune from private legal action in the U.S. (The Vatican for its part is publicly against any payout of compensation in sexual-abuse cases.) Church officials claim that even when an archbishop is on record as being the chairman of a diocesan corporation, whether a parish or a school, the diocese is not responsible for the acts of any parish priest. Of course, Big Tobacco once thought--wrongly, it turned out--that it was immune from lawsuits by individual smokers.
Lawyers representing the victims are working hard to crack each diocese's many-layered defenses, in part by showing that church officials responsible for supervising wayward priests also effectively control the corporations and entities that own church property. In a Miami case, the archdiocese claimed that it had no control over a parish school where a teacher molested a student. But attorney Weil showed that the diocese controlled not only curriculum and teacher appointments but also scheduling for the school conference rooms. The church settled before the case went to trial. "This is akin to a private getting caught and the general saying, 'He doesn't work for me,'" says Weil. "They're all wearing the same uniform."
Still, the church's secrecy and defiance are formidable obstacles. In 1998 Minnesota attorney Jeffrey Anderson sued the diocese in Stockton, Calif., on behalf of two brothers who had been sexually abused. Anderson discovered--in the middle of the trial, when he happened to rephrase a question posed to the diocese comptroller--that the diocese operated the separate Roman Catholic Welfare Corp., worth an estimated $400 million. But it was too late to add another defendant to the suit and too expensive to start a new trial. A jury awarded $29 million to Anderson's clients, but the diocese, pleading poverty, managed to have the judgment reduced to $7.6 million. Anderson says the award would have been much higher if the jury had known about the additional assets. The problem, Anderson says, is that "the Catholic Church doesn't have to do any accounting to anybody."