FEDERAL COURT CONFESSIONAL PRIVILEGE

The Priest-Penitent Privilege, or confessional privilege, has been a rule of law literally for thousands of years. Court decisions addressing it are rare and federal court decisions discussing it are of that tiny group the rarest. So, in the immortal words of Janine Melnitz, we can in this post say, “We got one!”

The case of Stevens v Brigham Young University-Idaho, Memorandum and Order (USDC Idaho, 2018) is an ongoing lawsuit about an alleged sexual predation upon a vulnerable student by a professor. The professor was deceased by the time the court proceedings reached the point at which the order discussed was issued and his estate settled with the plaintiff on undisclosed terms. The court’s opinion consumes fifty pages, mostly about attorney – client privilege and other discovery issues but starting on the thirteenth page was one of those rare discussions about the federal common law of priest – penitent privilege. The Court also allowed the parent denomination to intervene in the case to protect its claims of privilege because the church school defendant may not have been able to adequately assert the privileges. Another odd thing was that it was the defendant church school which was challenging Plaintiff’s assertion of the Priest-Penitent Privilege.

First, the court had to decide whether Idaho’s law on the privilege would apply or whether federal common law would apply because there is no federal statutory privilege for the confessional. The court held state law did not apply because the plaintiff’s theories of recovery raised federal question jurisdiction. Because state law was not the decisional framework for most of the claims in the case, state law privilege would not be applied as it might in a diversity jurisdiction case in which the federal court would be applying state law to the claims. Because of the lack of federal case law on the privilege, the federal court in this case relied on law from a circuit not its own. The court quoted the United States Court of Appeals in the Third Circuit’s opinion in In re Grand Jury Investigation, 918 F2d 374 (3rd Cir. 1990). From the Third Circuit came the “elements” of the privilege: “The privilege applies to protect communications made (1) to a clergyperson, (2) in his or her spiritual professional capacity (3) with a reasonable expectation of confidentiality.” The Third Circuit relied upon the 1973 Proposed Federal Rules of Evidence to define “clergyman,” “confidential,” and “who may claim the privilege.” However, those terms were not defined in any special way so for this post we will lighten the load by omitting them. However, the court did proceed to graft the Ninth Circuit’s (Idaho is in the 9th Circuit) “doctrine of implied waiver” onto the priest-penitent privilege. Implied waiver is a general doctrine that applies to all privileges and arises when the plaintiff’s claim necessarily puts the privileged information at issue in the case such that to deprive the other party of the information would result in an unfair trial. In bodily injury claims, for example, plaintiffs waive their right to medical record confidentiality although the extent of the waiver is often hotly contested.

In this case, because the Plaintiff was not trying to put forward a claim that implicated two instances of privileged confessional communication, the court enforced the privilege. Likewise, of course, the Plaintiff was foreclosed from putting forward the claim that would implicate the privileged confessional information. However, the Court applied the privilege on an instance by instance basis and ordered disclosure in the instance in which the Plaintiff “waived” the privilege by telling non-clergy third parties about the content details of the confessional conversation. In another instance the Court did not reach whether certain “lay ministers” qualified as clergy so that the privilege could be invoked because of waiver by disclosure to a third party.

CHURCH NAME DISPUTES

It is amazing how emotional a few church members can become over the name of the church. For most, the church name is simply an evangelistic marketing tool like the now ubiquitous ever changing electronic sign. But for some it becomes something as intrinsic as identity. Thus, changing the name of a church is usually done with slow care and consensus building in congregation governed churches. Also, name changes are as easily done as undone in most states. In most states, indeed, the church corporation name can remain the same and the new name can be adopted by merely filing a fictitious name certificate, or whatever the certificate is called in a particular state. Changing the name back merely requires filing a revocation of the certificate. Some churches will vote to adopt an alias name for a year and at the end of the year vote to keep the name or revert to the old name. That is a tried and true method to prevent what happened as described in the next paragraph.

In Gunn v First Baptist Church, Slip Op. (Tenn. App. 2018), the member did not want the name changed to “The Church at Sugar Creek.” The opinion of the court does not recite enough facts to know the basis or content of the objection by the member. Also, it is not clear whether the church corporation changed its name or merely adopted a new alias name using a procedure similar to the one described above. The member sued claiming the congregational vote to change the name was void because non-members or ineligible persons were allowed to vote. The opinion does not state whether the vote was close, recorded in any manner such as with paper ballots or a web-based tally, or whether it was a show of hands or otherwise secret. The court merely looked at the bylaws of the corporation, noted that membership was determined by ecclesiastical considerations, and affirmed the trial court’s dismissal of the case holding the ecclesiastical abstention doctrine limited the court’s jurisdiction over internal church management decision making.

The lesson from this is given in the first paragraph above. But, the other thing to note is that the brief filed on behalf of the member failed to cite a legal authority opposing the notion the ecclesiastical abstention doctrine prevented the court from reviewing a congregational vote. As has been reported on this website more than once, neutral principles of law are often applied to procedural irregularities in congregational votes using state laws governing corporations. While that is rare because it can easily go further than the First Amendment allows, and courts loathe supervising something like that, apparently that authority was not presented to this court.

DEALING WITH THE ROGUE PASTOR

Fortunately, rogue pastors are rare. In church splits, one side or the other may view a pastor as an enemy or even evil, but even in those situations the split is usually the cause of the perception. A truly rogue pastor is a dangerous insider that manipulates property or members for personal gain or gratification. Sometimes it is both.

In Bandstra v Covenant Reformed Church, Slip Op. (Iowa, 2018), the pastor was sentenced to five years in prison for sexual and financial exploitation of members being counseled for personal issues. The church leadership immediately “accepted the resignation” of the pastor when they learned of it. However, in the aftermath, the church leadership struggled with whether the victims could be in part to blame for violating their marriage vows. Moreover, faced with a rogue pastor completely beyond the competence of the average lay church leader, and most professionals, the leadership was sued for what may or may not have been missteps, and on remand a trial or settlement may finally decide it. Also, the church leadership was sued for failure to supervise the rogue pastor because his misconduct lasted for several years.

Church leadership should recognize that most pastors are simply not trained for the role filled by licensed professional counselors, psychologists and psychiatrists. A pastor trying to fill these roles should be strongly dissuaded if not outright prohibited. Also, if “spiritual counseling” exists at all, it should be performed only under appropriate conditions and at the very least not in the basement of the pastor’s home or behind locked doors (unless they are transparent). If the counseling is mishandled, that, too, could be result in a lawsuit. A pastor could sit in on a session with a professional counselor to assist with spiritual concerns. If the member and the counselor are unwilling to do so, the pastor should desist. Once church leadership learns that they are faced with a rogue pastor and terminates the employment, the church leadership must consider the job started and not finished. The church leadership should immediately engage counsel to advise regarding acceptable and unacceptable responses. If members have been victimized, engaging a professional counselor may be wise, too. Mistrust of the psychiatric sciences may leave the church leadership at the mercy of the priesthood of the law when a bit more searching could find an acceptable mental health professional.

DEFAMATION AND SLANDER CLAIMS BY CLERGY

This report will be the second this year in which defamation was a significant or primary claim.  In our post of February 8, 2018, entitled Internal Church Reorganization Defense, the defamation claim in a Texas case was dismissed because there was not a “scintilla of evidence” supporting it.  The defamation claim was lodged in an employment case arising from a position lost due to an internal church reorganization, pretextual or not, but was not strong enough to carry the case.

In Diocese of Palm Beach, Inc. v Gallagher, Slip Op. (FL App., 4th Dist. 2018), a clergyman sued for defamation but his damages claims were all wrongful termination damages such as front pay, back pay, lost wages, and lost wage earning capacity.  Typically, defamation damages are the dollar value of loss of reputation.  Reputation was more of  a nineteenth century damages concept although even today it can be a credible claim for damages in rare instances.  As a result, the trial court held the case was a wrongful termination claim masquerading as a defamation claim and dismissed it on Ecclesiastical Abstention Doctrine grounds.  The trial court may not have reached the Ministerial Exception Doctrine but probably would have if the case had continued.  The Florida Court of Appeals affirmed.  The facts of the case were interesting because the clergyman reported to secular authorities a child sexual abuse by another clergyman resulting in criminal prosecution and deportation of the offending clergyman.  But, meanwhile, parishioners complained about the ministerial performance of the Plaintiff.  The opinion leaves unanswered the question of whether the complainants were affiliated with the alleged abuser by ethnicity or national origin.  Relying on those complaints, the diocese did not promote the Plaintiff to pastor but transferred him to another church.  The Plaintiff gave an interview to the media which was reported as scathing to the diocese.  The diocese responded with its own public denunciation of the Plaintiff, including a claim the Plaintiff “needed professional help” and was unfit to serve as a clergyman.  The Plaintiff alleged the public statements of the diocese were defamatory.  The trial court held that to resolve the claims the trial court would have to explore Plaintiff’s fitness which would involve the court in a church disciplinary matter crossing into ecclesiastical matters.

The actions that made the dispute intractable for both sides were their public comments and maybe, too, that their public statements were harsh.  It is impossible to judge from this vantage point whether both or either speaker spoke irresponsibly, but both failed to count the legal cost of what was said.  The more pressing problem that was not addressed insofar as can be gleaned from this court’s opinion was the lack of an internal hearing by church officers.  Whistleblowers treated as pariah’s, even if there is no lawsuit, will remain a distraction for longer than would be the case if there was a full hearing and fact finding.  The church need not and should not conduct such an inquiry in public but rather should adopt confidentiality provisions to cloak the inquiry.  The purpose of the hearing is to make certain both whistleblower and church leadership have fully addressed all issues or frankly discussed disagreements.  Another possibility is to engage outside counsel to conduct the inquiry and to carefully interview the whistleblower and make confidential recommendations to church leadership.  Only by taking such substantive action is there hope either will trust the other.

CHURCH BANKRUPTCY

Fortunately, there are few church bankruptcies.  The bankruptcies that are of note are usually of larger hierarchical church organizations.  Local churches may be foreclosed but after that typically they simply dissipate or meet in rented space or homes.

In Re:  The Archdiocese of Saint Paul and Minneapolis, Slip Op. (8th Cir. 2018), four hundred clergy sexual abuse claimants represented by a creditors committee sought to consolidate all of the 200 affiliated non-profit corporations related to the archdiocese so that their assets could be added to the estate of the archdiocese.  These 200 affiliated non-profit corporations included local parish churches, schools, charities and foundations.  The 200 affiliated non-profit corporations were formed consistent with state law and as a result their boards were composed of the archbishop, vicar general, parish priest and two lay members appointed by the other three.  The affiliates were allegedly directly or heavily controlled by the archbishop, and occasionally abolished some of the affiliates.  However, the Unites States Court of Appeals for the 8th Circuit affirmed the trial courts that refused to grant consolidation.  The 8th Circuit noted that the bankruptcy code allowed substantive consolidation only as an extra-ordinary equitable remedy to be ordered in rare cases.  The occasional failure to adhere to corporate forms or the occasional discontinuation of an affiliate and absorption of its assets was not enough to warrant the remedy.  The remedy was generally expected to be used only when affiliates were part of a Ponzi scheme or were, in fact, mere alter egos of the debtor, neither of which were before the trial court.

Failure to follow corporate forms if sufficiently pervasive that it results in commingling of assets may lead to a conclusion an affiliate is a mere alter ego.  The sufficiency would seem to be reached if corporate forms are disregarded in a cavalier or criminal manner and not in a few isolated incidents.  That the archbishop served on every board and had the power to remove board members, in the case reported herein, resulted as much from state corporation law applicable to all non-profit corporations.  Thus, state corporation law should be consulted to make sure the composition of affiliate’s boards is either expressly authorized or expressly required.

THE DEAD HAND OF THE PAST

Courts will typically refrain from resolving church leadership succession controversies.  A court might make certain the process dictated by the church governing documents is followed such that usurpation is not likely to succeed, especially when in dispute are positions in congregational churches.  In hierarchical church organizations, the courts seem less likely to resolve a dispute because church government is presumptively able to manage its own internal process for elections.

In our post on April 4, 2017, we reported the opinion in Puri v Khalsa, 844 F3d 1152 (9th Cir. 2017) in which the Oregon federal court dismissed the case on the pleadings and on appeal the United States Court of Appeals for the 9th Circuit reversed an Oregon federal district court decision.  On remand, in Puri v Khalsa, Opinion and Order, (D. Or. Portland Div. 2018), discovery proceedings were followed by motions for summary judgment.  Also, a state court four-week jury trial had been concluded on state law theories of recovery.  In the case on remand, the Oregon federal court had all the evidence the parties could muster in discovery and the prior trial, too.  The issue was whether the succession plan of the founding religious leader was enforceable or whether the boards of the denomination could revise or revoke the succession plan.  The founding religious leader died and left written instructions with the lawyer of the corporation regarding the identities of the persons the late religious leader was appointing to the controlling boards.  The Oregon federal court held that the boards could revise the succession plan.  Also, the Oregon federal court concluded the evidence proved that while they may not be conventional churches the defendants were religious organizations.  Also, the court held the board members, because of their authority to choose and remove religious leaders in the church, were governed by the Ministerial Exemption Doctrine.  Finally, finding the entities to be religious organizations brought their internal decision-making into the Ecclesiastical Abstention Doctrine.  Thus, the Oregon federal court dismissed the case.

Succession plans that involve binding beyond the grave are likely to fail.  A founder that wants to preserve a legacy should do so before retirement or death.  Governing documents that invest denominational boards with the authority to select clergy or other church leaders may likewise place the election of board members beyond the reach of a secular court.  Internal processes that select these board members should be carefully designed to avoid over reaching and usurpation because secular court rescue may not be available.  As the foregoing demonstrates, the founder’s legacy was costly to preserve or inherit, and may not, in fact, belong to the founder or the founder’s heirs.

LANDLORD CHURCHES

Churches often own property and when that property is no longer mission critical the churches lease the property to a tenant.  It provides the church a source of income from an asset that may one day again be needed.  It allows the church to retain control of what is typically adjacent or nearby property.  Of course, the Ecclesiastical Abstention Doctrine may apply to some disputes, in whole or in part, about church property.  In Neutral Principles jurisdictions, secular issues may be decided and religious issues ignored or the reserved for decision by the church.

Beluah Pilgrim Holiness Church v Otto, Slip Op., Memorandum and Order (Mass. App. 2018) was an interlocutory appellate order concluding that the Housing Court had jurisdiction to hear eviction proceedings against tenants of church property.  The Housing Court in Massachusetts, apparently from the opinion, conducts “summary proceedings,” which are probably cases tried only on written submissions and a due process hearing.  Most likely, if either party desires trial of issues not suitable for that minimal process, the matter is transferred to a court of general jurisdiction.

The takeaway is that in Neutral Principles jurisdictions church landlords, and tenants, should be able to use limited jurisdiction courts and proceedings.  The flip side is that they can be forced to participate in proceedings before those limited jurisdiction tribunals and should not assume the church will be able to easily ascend to a court of general jurisdiction.