MILWAUKEE — The Archdiocese of Milwaukee asked the U.S. Supreme Court July 7 to review a March 9 decision by the 7th U.S. Circuit Court of Appeals that said there was no First Amendment protection in Chapter 11 bankruptcy proceedings for a cemetery trust worth approximately $65 million.
In asking the Supreme Court to review the decision relating to the Religious Freedom Restoration Act, Timothy Nixon, an attorney representing the Archdiocese of Milwaukee Cemetery Perpetual Care Trust, said in a news release that there are compelling reasons for the court to take up the case.
“The 7th Circuit decision encroaches on religious freedom and curtails the protections in the First Amendment for the free expression of religion,” he said, adding the decision also is directly at odds with previous decisions rendered by at least three other federal appeals courts.
In question in the archdiocese’s filing under Chapter 11 bankruptcy proceedings are the funds in a cemetery trust earmarked for cemetery maintenance to provide perpetual care for the archdiocesan cemeteries that cover 1,000 acres of land where more than 500,000 people are interred. Attorneys for the victim/survivors have argued that the funds should be used to compensate victims.
“The Supreme Court’s intervention is urgently needed to protect the religious freedoms the 7th Court decision threatens and to restore the free exercise of religion protections the decision rolls back,” said Nixon.
In its decision, the 7th Circuit said that the First Amendment’s free exercise clause does not prevent application of the U.S. Bankruptcy Code to the cemetery trust funds.
“We do not understand the archdiocese to be arguing the transfer of the funds is a religious matter this court cannot adjudicate, nor could it make that argument because those cases relate only to intra-church disputes,” the judges wrote.
“Here, we have what was alleged to be a fraudulent or otherwise avoidable transfer,” they said, “and the court need not interpret any religious law or principles to make that determination, nor must it examine a decision of a religious organization or ‘tribunal’ on whether or not the transfer was fraudulent.”
The circuit court overturned a July 29, 2013, ruling by Judge Rudolph Randa of the U.S. District Court for the Eastern District of Wisconsin.
Randa said to use the cemetery monies to compensate abuse settlement cases would violate Milwaukee Archbishop Jerome E. Listecki’s religious freedom rights as trustee for the cemetery fund. He cited RFRA and the First Amendment’s free exercise of religion clause.
The Official Committee of Unsecured Creditors, which is seeking compensation for victims/survivors of clergy sexual abuse, appealed Randa’s decision to 7th Circuit.
The Supreme Court has 45 days to respond to the archdiocese’s request for a review, but, “as a practical matter,” according to Nixon, the court “would not look at anything until the second Monday in October.”
He noted that of the more than 5,000 petitions it receives for review, the court only takes 5 percent of them.
In an unrelated matter, the archdiocese will file an amended plan for Chapter 11 reorganization and a second amended disclosure statement in U.S. Bankruptcy Court for the Eastern District of Wisconsin on or before Aug. 3. The original plan and disclosure statement were filed Feb. 12, 2014.
If it is similar to the original plan and disclosure statement, it will detail how the archdiocese will settle claims of creditors, including approximately 128 victim survivors of sexual abuse, and continue the work of the church in southeastern Wisconsin. It could also detail how the archdiocese has dealt with clergy who have sexually abused minors, how it has ministered to victim survivors of that abuse, and who would receive compensation.
In mid-June, attorneys for the Archdiocese of Milwaukee and the Official Committee of Unsecured Creditors mutually agreed to forego another attempt to mediate a settlement in the archdiocese’s reorganization.
On May 14, Judge Lynn Adelman of the U.S. District Court for the Eastern District of Wisconsin offered to facilitate the mediation. The sides agreed to return to Adelman’s court June 16 for a status conference regarding the possibility for mediation. That hearing was rescheduled for June 24, but was cancelled when attorneys opted not to engage in the mediation process.
It would have been the third attempt at mediation since the archdiocese filed for Chapter 11 reorganization Jan. 4, 2011, to provide a settlement to victims of past sexual abuse.
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Olszewski is executive editor of the Catholic Herald, a publication serving the Catholic community in southeastern Wisconsin.