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James Stang Argues for Application of Secular Law in Diocese Bankruptcy Case

July 14, 2005

On Friday, June 24, 2005 James Stang from Pachulski Stang 's Los Angeles office argued before U.S. Bankruptcy Judge Patricia Williams in the bankruptcy case of the Roman Catholic Diocese of Spokane, Wash. over whether churches and schools should be sold or mortgaged to settle sex-abuse claims. The hearing was the first of its kind in the United States, and the ruling could affect how the U.S. Catholic Church handles the settlement of sexual abuse claims. Mr. Stang argued that decades of tragedy were a compelling reason to rule in favor of more than six dozen victims. He asked the judge to apply secular law rather than allow canon law to dictate the laws of the United States. Doing so would dismiss the notion that the diocese holds the most valuable assets of the church in trust for various parishes and therefore the assets should be out of the reach of victims. Across the country the Catholic Church has spent more than $1 billion to settle the abuse lawsuits. Spokane is the third diocese to file for bankruptcy protection. The judge is expected to rule by mid- to late August on whether parishes are stand-alone organizations or belong to the diocese.