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	Class Action Possible in Church Case A Bankruptcy Judge Considers the Move to Decide Who Owns Cash and Property That Could Go toward Sex-Abuse Settlements By Steve Woodward The Oregonian [Oregon] May 26, 2005 All 389,000 Roman Catholic parishioners in Western Oregon soon may find themselves defendants in their archdiocese's legal fight to keep parish property from being used to pay sexual-abuse settlements. U.S. Bankruptcy Judge Elizabeth Perris said in a Wednesday hearing that she was leaning toward converting the property litigation into a rare class action at the end of July. "I've never had a class action before in my 21 years as a bankruptcy judge," Perris said, as she and several bankruptcy lawyers thumbed through their copies of the U.S. Bankruptcy Code, puzzling over the class-action rules. Rather than name every parishioner individually, a class action would enable the committee representing sex-abuse plaintiffs to sue the volunteer parishioners on behalf of all parishioners. The so-called adversary proceeding, which is similar to a lawsuit, would be meant strictly to answer the question of who owns the property in the archdiocese's 124 parishes and three high schools: the archdiocese or the parishes. Who owns $600 million in real estate, investments and cash has been a central issue since the Archdiocese of Portland became the nation's first to file for bankruptcy in the wake of lawsuits alleging clergy sexual abuse. If the archdiocese prevails, parishioners should be able to keep church buildings and schools. In case of a loss, parishioners would not be personally liable but could face losing or borrowing against their places of worship. Since the property litigation was initiated in August, it has stalled over several issues, including who is a "necessary party" to the litigation. A proposed class of defendants would legally answer that question. They could be parishes, parishioners, donors and anyone else, known or unknown, who can claim an interest in real estate, investments and cash held by the archdiocese. The sex-abuse plaintiffs, archdiocese, parishes and parishioners currently involved in the case all agree on the need for a class action. Steven M. Hedberg, a lawyer for the Committee of Parishioners, which represents about half of the affected parishes, asked Perris for time to arrange meetings with parishioners and explain the class action. "We're talking about 390,000 people here who aren't intimately familiar with bankruptcy proceedings," he said. Hedberg, whose firm, Perkins Coie, likely will represent the proposed defendant class, said he also needs time to recruit volunteers to represent the class. If the sex-abuse plaintiffs succeed in arguing that the roughly $500 million in real estate and $100 million in investments belong to the archdiocese, those assets will become available to pay off more than $400 million in abuse claims. In other words, an individual parishioner would not be financially liable, but his or her church building could be sold to raise money for settlements. If the archdiocese and the proposed new class of parishioners and others succeed in arguing that the property belongs to parishes, $19 million -- the amount of real estate and money the archdiocese says it really holds -- would be available for claims. Individual parishioners, donors and other members of the class could decline to be part of the class but would give up representation by the class's lawyers. Details of opting out of the class are still being worked out. In a related matter, Perris also indicated she would seek the help of an independent settlement judge who would help mediate seemingly intractable differences between the lawyers representing the archdiocese and the committee representing sex-abuse plaintiffs. During a Tuesday bankruptcy hearing, Perris scolded lawyers on both sides for the hostile, accusatory tone of their legal filings. She scheduled a June 6 hearing to get names of candidates for a settlement judge and to hear further information on the proposed class action.
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