O.C. bishop sues charity administrator who accused Catholic leader of wrongdoing

The Roman Catholic bishop of Orange County is suing a former charity administrator for libel, an escalation in the prelate’s dispute with influential church philanthropists who have complained to the Vatican about his firing of a nonprofit board.

Bishop Kevin Vann and the Diocese of Orange’s chief financial officer are seeking a retraction, financial compensation and punitive damages from the ex-administrator for an email in which they contend she gave a “false narrative” that suggested that charity funds might be used to cover clergy sex abuse claims.

The Superior Court suit filed earlier this month is the latest development in the bishop’s ongoing conflict with a group of high-dollar donors and other church insiders. Vann terminated the group from the independent Orange Catholic Foundation board in June after they rebuffed his request for millions of dollars in emergency pandemic funding. The board members reported the bishop to the Holy See for allegedly acting beyond his authority and violating state and church law, accusations the bishop denies.

The suit does not name any of the well-connected real estate developers, attorneys, corporate executives or others tossed from the board or the misconduct accusations they made to church officials in Rome and Washington, D.C. It focuses instead on an email written by an administrator ousted after the board firings.

In a July note with the subject line “You can’t make this stuff up,” Suzanne Nunn, a longtime philanthropy consultant who had served as the foundation’s interim executive director, gave 47 peers at Catholic dioceses and organizations around the country a behind-the-scenes account of the dust-up with the bishop.

She laid out Vann’s March request for money to cover an $8-million shortfall related to COVID-19, the directors’ decision to reject the request based on their fiduciary duties and the subsequent firing of the entire board.

“Is this considered a hostile takeover to distribute funds the diocese needs to cover debt? Lawsuits? Is this an overstep of authority?... No one knows” Nunn wrote, adding, “Does the Foundation Board have a fiduciary responsibility to fight this takeover to protect the donor intent and Foundation assets?... All rhetorical questions, but something to consider.”

Those questions are central to the suit brought by Vann and diocesan Chief Financial Officer Elizabeth Jensen. They allege that since Nunn referred elsewhere in the note to molestation lawsuits, her queries amounted to an untrue and defamatory assertion that the church was seeking to seize the foundation money to cover those lawsuits rather than the purposes donors intended.

Paying for sex abuse claims is a sensitive topic. A new state law lifted the statute of limitations for some abuse accusations, and Catholic dioceses along with other organizations are bracing for an onslaught of costly litigation that many benefactors do not want to finance.

An attorney for the bishop and Jensen wrote in the suit that the bishop and Jensen had contemplated “what would happen if they turned the other cheek.”

“If no one corrects the record, donors will not donate ... because donors will think their money will be used for illicit purposes. In turn, the needy will suffer,” wrote lawyer Todd Theodora.

The suit, which also accuses Nunn of intentional infliction of emotional distress, claims she was portraying herself as a “conscientious and ethical leader” to secure future employment with other Catholic groups

An attorney for Nunn did not return messages. She declined an interview request.

Experts in libel law who reviewed Vann’s complaint said the bishop faced steep hurdles. Under the California anti-SLAPP statute, a judge can dismiss a defamation suit if he determines it is a “strategic lawsuit against public participation,” meaning its intention is to intimidate or silence a citizen from speaking out about an issue of public interest. Losing plaintiffs are then on the hook for the other side’s legal bills, which experts said often stretch to six figures.

Jeremy Rosen, a Beverly Hills attorney who specializes in free speech and religious freedom cases and has represented about 70 clients on both sides of defamation suits, said that short of the bishop producing additional evidence, “the most likely outcome here is that this complaint will be dismissed on an anti-SLAPP motion.”

He said the suit illustrates the inherent difficulty of libel actions: “Legally it is the hardest lawsuit to win, and you can end up owing a lot of money to the other side ... and it just brings more attention to the statements that were made about you than if you just let it go.”

Loyola Law professor Aaron Caplan, who teaches 1st Amendment law, said it would be “a stretch” to convince a judge that Nunn’s questions added up to the provable statement of facts required for libel.

“I think it is a hard sell to say there was a statement of fact, but not an impossible one,” he said.

San Francisco attorney Karl Olson, who has defended dozens of defamation suits against individuals and news organizations, said he doubted the suit would survive an anti-SLAPP challenge.

“You have to question their strategy,” said Olson, who has represented The Times. “They talk in their complaint that their mission is to help the needy ... but it seems like the only people helped by this are the lawyers who are presumably not needy.”

A diocesan spokeswoman did not respond to questions about who was footing the bill for the lawsuit. Theodora, the bishop’s lead attorney, declined to say whether church money was being used to pay his legal bills or how much he was charging, citing attorney-client privilege. At least one of his colleagues at the law firm Theodora Oringher, where he is chairman and chief executive, billed $895 per hour, according to a 2018 declaration that lawyer filed in another matter.

The bishop’s decision to jettison the foundation board continues to roil parts of the 1.3 million-member diocese.

Costa Mesa attorney and longtime donor Steve Dzida informed the foundation in September that he and his wife were cutting off contributions until the bishop took steps to ensure the charity was outside his control.

“If the foundation is not run in that fashion, I don’t feel like that honors my intent as a donor.... When we supported this foundation we understood that these decisions would be made by a board of directors that was independent of the bishop,” Dzida said.

He said he and wife were redirecting their donations to Catholic programs for the homeless in Santa Ana.