Federal judge agrees to dismiss bankruptcy case filed by Oakland Catholic Diocese

Jakob Rodgers, The Mercury News on Oct 29, 2025

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A federal bankruptcy judge Thursday granted a request by the Roman Catholic Diocese of Oakland to dismiss its bankruptcy case, setting the stage for hundreds of sexual assault victims to take their long-running lawsuits against the church to trial in the coming months and years.

Judge William J. Lafferty said his decision would not be official until Nov. 12 — leaving open the possibility of a last-minute deal between the diocese and about 350 people who filed lawsuits in recent years claiming decades of abuse by local clergy members.

The ruling comes about a month after diocese leaders asked to end the proceedings, suggesting that abuse victims — as well as the church’s own congregants — “deserve better” than a costly Chapter 11 bankruptcy fight that appeared to be going nowhere over the last two and a half years.

Advocates for the victims hailed the ruling Wednesday as an important way for their clients to finally have their day in court. The ruling gives hope that victims of abuse “will be freed from the constraints of this bankruptcy, and these efforts by the Catholic bishop to hide in the bankruptcy system, that conceals instead of reveals the painful truth,” said Jeff Anderson, an attorney for scores of people claiming to have been abused.

“All this diocese is doing is spending money to avoid accountability, instead of letting it be revealed in the courtroom,” Anderson added.

A message left by this news outlet with a diocese spokesperson was not immediately returned.

While making his ruling Wednesday, the judge said both sides “operated in good faith” over the last two-plus years. In the process, Lafferty struck down a request by the victims’ attorneys to prohibit the church from filing for bankruptcy again in the future.

The decision marked another twist in a legal saga dating to 2019, when Gov. Gavin Newsom signed legislation that opened a new window for people to file lawsuits claiming sexual abuse going back decades, before the statute of limitations expired on those cases.

A torrent of lawsuits followed across the state, including about 350 in the East Bay against the Oakland diocese. The claims were haunting, including allegations that churchgoers were groomed, raped and “terrorized” for decades by Catholic priests across the East Bay.

One woman claimed to be molested by a priest during a confessional in Pinole while just 7 years old, leading her to use drugs to numb the memory of the encounter. At a court hearing last year, another person said he “stopped at that young age learning how to dream,” after allegedly being raped by clergy as a child and suffering physical injuries that continue to cause medical issues all these decades later.

In May 2023, the Oakland diocese filed for Chapter 11 bankruptcy protection, claiming a need to “stabilize its finances.” In a statement at the time, Oakland Bishop Michael C. Barber said the move came after “careful consideration of the various alternatives for providing just compensation to innocent people who were harmed,” and that it was “the best way to ensure a fair and equitable outcome for survivors.”

Advocates for people claiming to have been abused blasted the move — calling it “disgraceful,” “shameful” and “a tactic to thwart and deter victims.” One attorney for the victims, Rick Simons, blasted the move as part of a “national strategy to avoid having to pay these claims, and having to pay these survivors.”

The bankruptcy filing mirrored similar moves by Catholic dioceses across the country facing their own wave of sexual abuse lawsuits. Dioceses for San Francisco, Santa Rosa, Sacramento and Fresno also filed for Chapter 11 bankruptcy protection. Others avoided it — last year, the Archdiocese of Los Angeles managed to reach an $880 million settlement with more than 1,350 people who sued church leaders in Southern California.

Negotiations in Oakland often faltered, with attorneys for abuse victims often balking at proposals by the church. One plan by church leaders called for creating a trust worth at least $117 million, which could grow by tens of millions of dollars with the potential sale price of a Livermore property included in the deal. The latest proposal called for paying $165 million over five years to the claimants.

Attorneys for the victims repeatedly pushed church leaders to sell more of their properties to fund a higher payout — suggesting that the proposal amounted to far less than settlements reached by other dioceses across the state and nation.

On Wednesday, those same attorneys lamented the nearly two-and-a-half years spent fruitlessly negotiating in bankruptcy court, particularly given how the average age of the victims is about 60. Several of them died during that time, including two of Simons’ clients.

“People are rightfully angry, frustrated and sad that these very powerful people in the church they grew up in refused to cooperate and move the process along,” Simons said. “It’s disappointment, it’s frustration. But it’s also encouraging that the courthouse doors are open to us again.”