The Child Victim Act: The Latest Developments as the Legislature Convenes

Seyfarth Synopsis: Democrats now control both houses of the New York Legislature as well as the Governor’s office. Among the host of expected legislation, the anticipated passage of the Child Victim Act (“CVA”) is likely to have a significant impact on many of New York’s institutions. Educational, religious or other civic organizations that care for children should begin taking the appropriate steps to best prepare for the inevitable impact of this Act.

What is the Child Victim Act?

The CVA is legislation designed to protect childhood victims of sexual abuse. The CVA initiative seeks to remedy the age old problem that many victims of sexual abuse forfeit their right to redress by not reporting their abuse until after the statutory limitations period expires. The Act would drastically change New York’s strict statute of limitations for sex abuse cases.

The current law requires alleged victims of sexual abuse to initiate any civil lawsuit before their twenty-third birthday. The proposed CVA, as currently drafted, would allow alleged victims to bring civil lawsuits until their fiftieth birthday and further provide an open one-year window to revive old cases, which may previously have been dismissed on statute of limitations grounds. The CVA would also allow victims to name private and public institutions as defendants.

The New York Legislature first introduced the CVA bill in 2008. In the eleven years since the measure was first introduced, support for the CVA and its public awareness of has steadily increased. Despite a February 20, 2018 Quinnipiac Poll showing that 90% of New York voters support the Act, it has failed to pass for over a decade due to a razor thin Republican majority in the New York State Senate.

For just the third time in fifty years, the Democrats have taken control of both legislative houses. Passage of the CVA is atop their list of proposed legislation.

What is on the Horizon?

The New York Legislature began its January term on January 9, 2018. Slated for its first 100 days is the “2019 Justice Calendar” representing a suite of proposals. Rather than wait (like prior years) until the “State of the State” address in January, the Legislature previewed this calendar in December 2018, presumably to demonstrate what Governor Andrew Cuomo called “New York’s Declaration of Independence from Washington.” One of the twenty point agenda items was the passage of the CVA.

This initiative has garnered considerable attention. While staunch supporters are pushing for quick enactment of the CVA, other legislators are urging more caution. The reason is clear: there are likely to be significant ramifications for many institutions that care for children in New York. For example, the one year “look back” provision is expected to create an onslaught of litigation and could lead to bankruptcy for various civic institutions. Governor Cuomo has been listening to religious leaders of various faiths concerned about these consequences. He has publicly stated his concerns as to the financial repercussions on the Catholic Church, which runs many of the New York State social service programs and funds New York based hospitals, colleges and religious schools. On the one hand, Cuomo has stated that “nobody wants to see a diocese or the Catholic Church bankrupt, so how it is done is very important.” On the other hand, he has also noted that the Church should not get a pass for its wrongdoing.

One thing is for certain, however. The Governor is speaking to various constituencies and giving the ramifications of the CVA serious consideration.

The Path to the CVA’s Passage?

There will be various opportunities to discuss, debate, and lobby to change the content of what will be the final version of the CVA. The time to weigh in on that content is now.

The existing Assembly CVA bill, which has already gone through the steps necessary for passage in the Assembly, will be sent to the Senate, where it can be discussed in committee, debated in open session, and followed by a vote of the full Senate membership. If the bill is approved without amendment, it will then be sent to the Governor for signature. But, if there are amendments made in the Senate, it will be returned to the Assembly for its concurrence as to those amendments.

Sometimes the Senate and Assembly seek passage of similar bills, but cannot easily reconcile their differences. In this scenario, a conference committee is used to iron out the differences. After an agreement is reached, the bill is sent to the Governor for his signature or veto. Only a two-thirds majority in both houses can override that veto.

What Does This Mean for Your Institution?

Any educational, religious or other civic organization that cares for children, such as a school camp or day care facility, will be subject to the CVA. This means that a significant number of people may now come forward, recognizing that they have broad-based legislative and public support, and that they will not be faced with the immediate dismissal of their claims on statute of limitations grounds. As an institution providing services to children, even if you are currently unaware of any pending issues as to children previously in the institution’s care, any individual under fifty years old would be entitled to initiate a public lawsuit against your organization. The defense of such cases is often extremely difficult as memories have faded and witnesses have disappeared. Evidence such as school records, medical records, witnesses to the abuse, individuals who might have received the victim’s outcry, and even the wrongdoers themselves, may be long gone. In many respects this can make an institution essentially defenseless when such claims are asserted.

What are the Next Steps?

Your institution’s consideration of the ramifications of the CVA is a necessary and critical first step in addressing this potential problem.

Understand the Act:

The passage of the current draft of the CVA will drastically change the laws concerning statute of limitations. But, the provisions of the Act will be subject to revision and political compromise during the legislative term. The time to weigh in is now.
A lobbying effort in conjunction with other similarly situated institutions could help make the legislation more manageable. For example, removing the “look back” provision would limit the likelihood of a spate of lawsuits that could be filed. The creation of a damages cap per victim would also allow for a better allocation of damages multiple victims. Should your institution decide to hire lobbyists, its identity is subject to disclosure and may be become public.
If lobbying is not feasible, consider personal outreach to your respective State Senator or Assemblyman. They need to understand that your institution may face significant consequences for historical conduct of which the present administration was unaware.

Determine Your Potential Risk:

Are there lawsuits against your organization that were dismissed on statute of limitations grounds that will likely be resurrected?
Have you ever received a complaint or other information suggesting sexual abuse may have occurred? Have you dealt with such information in a reasonable and prudent manner?
Consider what could be done now to address any concerns and avoid potential litigation. An outreach to victims, offering truth and reconciliation efforts, and perhaps including funds earmarked for counseling, may be a good starting point. Or consider the creation of a victims fund that can administer compensation to those victims that seek monetary relief but would rather not file a public lawsuit.
If lawsuits are commenced do you still have access to witnesses or documents? Is the alleged abuser still alive? Are they still involved with your institution? In short, is this a lawsuit you can defend?

What Other Options Should my Institution Consider?

Supporting Organization:

If you are a charitable organization consider establishing a separate legal entity called a “supporting organization” for purposes of autonomy or limitation of liability. Supporting organizations have been used to provide support to a variety of public charities including potential funding of a separate endowment for the public charity. However, the “supporting organization” regulations are intricate and detailed, and require careful planning in coordination with its public charity.

Bankruptcy Court Protection:

A last resort may include bankruptcy protection should a flood of lawsuits make survival of the entity doubtful. The Boy Scouts and USA Gymnastics Association believe they have potential liability far in excess of their assets. The USA Gymnastics Association recently filed for Chapter 11 bankruptcy protection and the Boy Scouts is considering it. The goal is to re-organize and preserve assets to carry out their charitable missions while attempting to settle lawsuits.

Filing for bankruptcy is a costly and time consuming step, and there are many caveats as to its use. Consideration should be given as to the reputational harm, as well as certain legal challenges after bankruptcy is declared.

Conclusion

The sexual abuse of children has impacted countless victims in many different ways. There is no disputing that such conduct is reprehensible and must be stopped. The enactment of the CVA is not a question of if, but of when. While your institution has a responsibility to the children it serves, it must also take reasonable and prudent steps to prepare itself to respond to any complaints. Whether through the legislative process, risk assessment, or proactive remediation efforts, taking steps to best prepare your institution requires careful consideration of all available options. Seyfarth Shaw would be happy to discuss these alternatives with you in more detail, and share our collective wisdom.