ARBITRATION AND CHURCH LITIGATION

It is rare that a church dispute is compelled to arbitration.  Rarely is there a contract, local church control document or denominational control document that would require arbitration.  Even though there are private para-church organizations that offer the services of arbitrators, most church entities have never embraced them for anything other than disputes between members.

In Patterson v Shelton, 2017 WL 3446885 (ED Penn. 2017), twenty-two years of litigation over control over the denomination and its assets had progressed through arbitration, state trial courts, federal trial courts, and appellate courts.  The opinion does not explain the reason arbitration was compelled by the state trial court in 2006.  But, the arbitration award in favor of the Plaintiff was vacated by the state appellate court.  Efforts to enforce the arbitration award in federal court did not commence for six years for an unknown reason.  The federal court dismissed the arbitration award enforcement action and the dismissal was affirmed by the United States Court of Appeals for the 3rd Circuit.  The opinion summarized herein was the second case filed in federal court to enforce the arbitration award and again the case was dismissed.

The dismissal was based on a lack of subject matter jurisdiction because there was no federal question jurisdiction and there was not complete diversity of state citizenship between the plaintiffs and the defendants; the arbitration award had been vacated and in the eyes of the law no longer existed to enforce; further review of or enforcement of the arbitration award would require entanglement of the Court in ecclesiastical governance.

It was somewhat surprising the Court even reached the Ecclesiastical Abstention Doctrine given the absence of federal question or diversity jurisdiction.  The Court did not fully explore prohibition of enforcement of an arbitration award, a creature of contract, by the Doctrine but did explain it enough to indicate that practitioners considering mandatory arbitration clauses would do well to be skeptical of their utility in ministerial employment and church governance matters.

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