Court Rules Insurance Coverage Can be Pursued to Settle Claims of Oakland Diocese Sexual Abuse Survivors 

In a case involving the bankruptcy filed in May 2023 by the Roman Catholic Diocese of Oakland, Judge William J. Lafferty of the Northern District of California has issued an order confirming that the Unsecured Creditors Committee, which represents more than 325 sexual abuse survivors, now has broad authority to intervene in an insurance coverage adversary proceeding between the Diocese and its insurers.

“This is a huge and important ruling in favor of sexual abuse survivors from the court overseeing one of the three Diocesan bankruptcies recently filed in California, says Tim Burns, who argued the motion regarding insurance coverage before the court several weeks ago.  “The Court not only correctly interpreted the Bankruptcy Code as providing the Committee an unconditional right to intervene in adversary proceedings, but Judge Lafferty also recognized the great stake that the survivors have in the Diocese’s insurance policies.

The Court was spot on in stating that the Committee believes the insurance adversary proceeding needs to be pursued aggressively and immediately—a view as the Court noted was different from the view of other parties, and was very visceral and very genuine,” Mr. Burns added.

The Diocese filed for bankruptcy protection after it initially received hundreds of legal claims of sexual abuse by clergy. The lawsuits were filed after California suspended the statute of limitations for sexual abuse between January 2020 and December 2022, opening a three-year window where victims had until age 40 or five years from the time their abuse was discovered to file civil actions against their alleged abusers.

The case is In Re: The Roman Catholic Bishop of Oakland, Case No. 4:23-Bk-40523, in the United States Bankruptcy Court for the Northern District of California.