I haven’t read any of the pleadings, so it’s hard to form an opinion. At first blush, however, these seem to be two sophisticated contracting parties. And courts generally favor upholding the agreement between the two - even if it’s a not-so-great agreement. Moreover, if the law has changed so that a formerly legal arrangement is now illegal (perhaps because of a sexual-orientation discrimination law) then you can’t contractually mandate that another party break the law. I don’t know much about the case; maybe the Church has a good argument - maybe they were hoping to settle - maybe they’re just grasping at straws. It’s hard to tell.
Ultimately, I think this case is an example of something I’ve believed for a couple years now: The Catholic Church’s social services will be scaled back in the U.S. through laws that require the respect of acts that the Church finds immoral. E.g., same-sex adoption tied to orphanages, birth-control covered under health insurance forecloses employer health insurance under Catholic charities, federally funded charities or hospitals must not discriminate on sexual orientation - or must permit family planning and abortion services, etc.
I can’t help but wonder if the Church in America will be serving far fewer poor and needy people in 10 years than it does now.
Pax,
OA