Judge Is Asked by Creditors of Archdiocese to Leave Case
By LAURIE GOODSTEIN, NY TIMES
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A federal judge who ruled in favor of the Roman Catholic Archdiocese of Milwaukee in bankruptcy proceedings, and against sexual abuse victims and other creditors, is being asked by the creditors to recuse himself because they say he has a conflict of interest.

Judge Rudolph T. Randa ruled in late July that the archdiocese did not have to turn over the millions in its cemetery trust fund to a group of creditors who include hundreds of abuse victims. But lawyers for plaintiffs say the judge has a conflict of interest because many of his family members are buried in archdiocesan cemeteries.

In his ruling, Judge Randa decided that forcing the archdiocese to tap its cemetery fund would violate the First Amendment’s free exercise of religion clause and the Religious Freedom Restoration Act, a law passed by Congress in 1993.

“For the church and therefore Catholics, cemeteries reflect the Catholic belief in the resurrection of Jesus and the community’s commitment to the corporeal work of mercy of burying the dead,” Judge Randa wrote.

The ruling reversed an earlier decision by a federal bankruptcy judge and was a victory for Archbishop Jerome E. Listecki of Milwaukee, and for his predecessor, Cardinal Timothy M. Dolan, now the archbishop of New York, who established the cemetery trust in Milwaukee in 2007. Documents made public in July revealed that when Cardinal Dolan sought the Vatican’s permission to move nearly $57 million into a cemetery trust, he said it would help protect the money from legal claims.

The archdiocese draws on the trust fund to maintain its cemeteries, where about 500,000 people are buried, but it is one of the last large assets available to the survivors of sexual abuse by clergy members in Milwaukee. The archdiocese filed for bankruptcy in 2011 after hundreds of people filed suit.

A lawyer for the team representing the creditors said they discovered only after Judge Randa issued his ruling that at least nine of his relatives, including his parents, sisters and in-laws, are buried in the cemeteries. After obtaining a court order to compel the archdiocese to turn over records, they found that Judge Randa had bought the contract for the care and maintenance of his parents’ burial crypts.

“He is, in effect, a creditor himself,” lawyers for the creditors argued in their memorandum asking for the recusal of Judge Randa, who sits on the Federal District Court in the Eastern District of Wisconsin.

Marci A. Hamilton, special counsel to the committee of creditors and a professor at the Benjamin N. Cardozo School of Law at Yeshiva University, in New York, said of Judge Randa: “He knew, while he was making this decision that this was going to affect his parents’ grave site. It’s one of the clearer cases of a conflict. He has moral, religious and legal reasons not to be the one making this decision. I am certain federal judges all over the country are watching this decision.”

But lawyers for Archbishop Listecki and the cemetery trust argued in a memorandum filed Monday that the move for a recusal is “a thinly disguised attempt to shop for a new district court judge.”

“The personal attack on Judge Randa is astounding,” said Timothy F. Nixon, a lawyer for the cemetery trust, in an interview. “He’s not a creditor in any way, shape or form.”

The creditors have also appealed Judge Randa’s ruling to the United States Court of Appeals for the Seventh Circuit. They say that his decision would allow any entity to claim that it could not pay creditors in bankruptcy proceedings because of its First Amendment right to “free exercise” of religion.

“His reasoning would reverse about 75 percent of the free exercise cases out there,” Professor Hamilton said. “That’s why it’s so troubling, and that’s why we are determined to get the decision vacated or at least reversed, because it’s just bad law.”

Prof. Stephen Gillers of New York University School of Law said he could not understand why the creditors would seek both a recusal and an appeal simultaneously, unless they want “to cast doubt on the integrity of the ruling by saying this judge couldn’t look at it with disinterest.”

Professor Gillers said the judge’s monetary interest in the cemetery trust was probably not sufficiently substantial to merit recusal. And he said that the timing would also be in question.

“An appellate court is going to say, if you could learn these facts after the ruling, why couldn’t you do it before the ruling?” Professor Gillers said. “Why all of a sudden did you become interested in whether this judge could sit, other than the fact that you lost. That’s something they have to explain.”