"St. Augustine is fully aware that not all members of the clerical state and hierarchy are holy men, and if such is the case what is the relation of the wicked members to the body of Christ? The relation is the same as that of all other members. Good bishops participate fully in the life of the mystical body; they, as principal members are bound to it by life-giving ties. Bad bishops, may have jurisdictional powers and authority and belong to the Church, like all sinners not separated from it, but they do not participate in the life of grace. They are not however severed either from the external Church or the mystical body... till the end of time two categories of pastors are bound to exist. There are shepherds “who occupy a pastoral chair in order to tend to the sheep; others, however, sit on them in order to enjoy temporal honors and secular advantages” Unrightous bishops are not honored with the name of sons, but are called mercenaries. St. Peter, who is portrayed by St. Augustine as a personification of the Church, is also presented as a symbol of all the pastors of the Church. However, it is only good pastors and not of mercenaries that Peter is representative...in opposition to the other apostles, Judas is reputed to be such a mercenary; and if this happened to one of the apostles, who were so close to Christ, there should not be reason for scandal if his example finds imitators among the apostles' successors. They can have a place in the temporal existence of the Church, but will not enjoy the eternal existence of the mystical body of Christ" (Grabowski, pp. 219-221).
Wicked bishops are therefore one with good bishops temporally, yet not one spiritually. They have external, juridical power until decided to the contrary by the Roman Pontiff. The Church is without sin, but not without sinners (c.f. Grabowski, p.558). It was the false conception of sinner and his relationship that drove the Donatist and Pelagian heresies. In today's age with an obsession with individualism a false sense of liberty a form of neo-Donatism suggests that one may be a good Catholic as long as one professes loyalty to the Roman Pontiff and the catechism.
Conveniently forgotten is that one also owes actual, practical, real loyalty to the local bishop (appointed by the Roman Pontiff) who is the ruler over the local Church in union with the universal Church. Let not arguments of the local bishop's “heresies”, “scandals”, “chancery intrigue” etc. be used to disobey the bishop in matters of faith and morals. Rome is the sole judge of that. No one, is a formal heretic unless judged by the Church. Let not such arguments be used in denying the bishop his juridical rights as well. Either we have a Pope and a Hierarchy or we do not. Either we owe filial obedience to our bishop or we do not. We must choose between a form of congregationalism derived from Donatism or remain fully Catholic.
Obviously, no one is arguing to follow a bishop who denies the Real Presence, rejects Catholic teaching in sexual morals etc. Nonetheless, the diocese is not sede vacante until Rome judges that it is so. A materially heretical bishop is not deposed until declared so. The prudent action of a Catholic at this point would be to seek out holy priests in the diocese, to encourage Church authorities to take the appropriate actions. Both Pope John Paul II and Pope Benedict have carefully moved to re-invigorate the Hierarchy without inducing a formal schism.
Reference: Grabowski, S. J. (1957). The Church: An introduction to the theology of St. Augustine. B. Herder Book Co; St. Louis, MO and London, England.