DENOMINATIONAL CHURCH ARBITRATION

There are few reported examples of denominational church arbitration that allow study of the process or its purposes. Also, most denominational arbitration systems are still infantile in their development and operation. A few are beginning to mimic the highly developed American Arbitration Association or the Financial Industry Regulatory Authority (“FINRA,” formerly “NASD” and formerly “NYSE”) arbitral forums. Denominational church arbitration is reported so rarely, and probably conducted so rarely, that evaluation of process or results is problematic.

In Garcia v Church of Scientology, Order, (MD FL, Tampa Div., 2018) the United States District Court dismissed the case challenging an arbitral award against the Plaintiffs. The Plaintiffs submitted an arbitration claim to retrieve hundreds of thousands of dollars in donations in two programs of the church the plaintiffs claimed were fraudulently misrepresented. The Plaintiffs challenged the arbitral award on United States Arbitration Act grounds including “evident partiality” and misconduct of arbitrators. The plaintiffs claimed witnesses and documentary exhibits were not heard or reviewed by the arbitrators, the arbitral forum held ex parte meetings with the arbitrators, and the arbitral forum edited or redacted exhibits submitted to the arbitrators. They also claimed their counsel was not allowed to attend, however, the Court determined the record reflected Counsel would have been allowed to attend but would not have been allowed to participate. Considering the challenge in light of the limited review possible under the United States Arbitration Act and the Ecclesiastical Abstention Doctrine, the Court found no sustainable grounds for the challenge. The Court held the Plaintiffs agreed to arbitration, agreed to proceed in arbitration and were bound by church arbitral rules and procedures which included much about which they complained.

Arbitrators as a herd try to do the right thing usually regardless of the procedural niceties imposed by the arbitral forum. However, arbitrators are usually selected because they are in some way allied with the arbitral forum or its sponsors. That is true in commercial arbitration so it should not be a surprise that denominational church arbitrators would be closely aligned with the church denomination. That does not mean the arbitration cannot be fair because sympathy will only go so far. In most arbitrations, it does not play a determinative role because all adverse litigating parties are also aligned with the arbitral forum in some way. If the damages claim presented by the claimant, in commercial or church arbitration, requires a negative interpretation of facts otherwise innocent, such as fund-raising marketing representations as in the case reported herein, the case will be weak at best. Hard facts showing fraud designed and directed especially at a vulnerable plaintiff would be required. Also, if counsel is allowed to attend but not participate, or not allowed to attend, then the arbitration is probably not worth the effort or cost. Most claimants lack sufficient training in advocacy in a litigation setting to represent themselves much less the emotional objectivity needed to put forward successful arguments. Pro Se plaintiffs and claimants get lost in the weeds, do not know when to throw back the little ones, and do not know the decisional paradigm or standards of the arbitral forum well enough to know which parts of their case are important.

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