Author: churchlitigationupdate


In decades past, denominational doctrines often seemed established, immutable, and immoral to oppose.  Denominational doctrines seem to be challenged, and in some cases abandoned or revised, in growing numbers.  Whether in the distant future these changes will be viewed as aberrational or merely a form of maturation remains for others to determine.  Opposing denominational doctrines in court has always faced the all but insurmountable barriers of the First Amendment:  the Ecclesiastical Abstention Doctrine (doctrine), the Church Autonomy Doctrine (governance) and the Ministerial Exception (“ministry” employment).

In Payne-Elliott v Roman Catholic Archdiocese of Indianapolis, Inc., Slip Op. (Ind. 2022), the Supreme Court of Indiana affirmed the trial court’s dismissal of the case.  The Court concluded the plaintiff pled himself out of court by pleading facts that established the Church Autonomy Doctrine defense.  The opinion reported the Plaintiff’s same sex marriage led to two different results.  The Plaintiff’s spouse was an elementary school teacher at a Catholic elementary school.  The elementary school refused to terminate the spouse.  The archdiocese removed the school from the denomination.  The archdiocese ordered the Catholic high school employing the Plaintiff to terminate Plaintiff and they did so.  Apparently, the high school entered a financial settlement with the Plaintiff.  However, the case continued against the archdiocese.  The Supreme Court of Indiana set forth the elements of the Church Autonomy Doctrine affirmative defense as prohibiting a court from penalizing via tort law a communication among church officials on a matter of internal church policy (i.e., governance) that does not culminate in a criminal act.  Because the Plaintiff pled that the Catholic high school was commanded by the denomination to terminate Plaintiff due to Catholic doctrine, the Church Autonomy Doctrine elements were held satisfied resulting in dismissal.

While the legal outcome of the reported case was not surprising, we have reported many similar decisions and few exceptions, the reported case was startling because of its “Birdseye view” of denominational doctrinal slippage.  A Catholic school stopped being a Catholic school.  Another Catholic school paid a settlement to avoid further litigation.  Only the denomination continued until the case was concluded.  Only future generations of church members will be able to judge whether choices like these were reached following immutable doctrine or reflecting changing doctrine.


Few ministers can keep the loyalty of a modern-day congregation more than a few years.  Staff members are more likely to have longevity.  Thus, the question of whether a retirement plan will actually apply in a bankruptcy is likely to be rare.  Nevertheless, it can happen.

In the case of Re:  Roman Catholic Church of the Archdiocese of New Orleans, Memorandum and Opinion (ED BR La. 2022), the federal bankruptcy court faced an objection from a creditors committee as to the pre-petition retirement benefits owed to five priests.  The retirement plan was an obligation arising under Canon Law.  There was a monthly “maintenance” stipend and medical benefits.  The five priests were not on the Credibly Accused List.  During document discovery in the case, documents were produced from which the creditors committee claimed the five priests were credibly accused.  The Archdiocese objected on procedural grounds but did not protest against the allegation the five priests were credibly accused.  The Archdiocese previously consented not to pay retired priests already on the Credibly Accused List.  The bankruptcy court amended the Wages & Benefits Order previously entered to exclude payments to the five priests.

The management of a debtor in possession is particularly difficult, but management of a church or denominational level unit seems likely to be more difficult even than that.  Because the amount of the payments contemplated in the reported case were not stated in the opinion, it is difficult to know whether the economics justified the relief sought.  Other factors may have been involved. 


While it is true some Courts never find an Ecclesiastical Issue over which to abstain, and some expand Neutral Principles of Law to fill all voids, generally most Courts do not seem to have any trouble with a hands-off approach to church governance.  It is true that non-profit corporations in general and churches in particular can be vulnerable to usurpation because of the volunteer nature of their leadership.  Thus, there is recognized by some Courts a “fraud or collusion” exception to the church autonomy doctrine.

In Moon v Family Federation for World Peace, Slip Op. (DC Cir., 2022), the ongoing litigation between the widow and two sons of the deceased founder was revitalized when the board of directors of Unification International, Inc. allegedly reconfigured the governing documents to permit donation of half of the assets, about half a billion dollars, of Unification to entities “not affiliated” with Family Federation.  We last reported on the litigation between these and affiliated parties on August 3, 2019.  The trial court in this instance concluded the Neutral Principles of Law could be deployed and granted summary judgment to Family Federation, directed the board members be personally liable for the assets, and removed from their positions.  The Court of Appeals for the DC Circuit reversed the summary judgment, wiping out the judgment against the board members, and remanded for a determination of whether the fraud or collusion exception to the church autonomy doctrine was a viable claim.  If the claim survives in the trial court, it may lead to a second judgment.

The failure of the founder to have a firmly structured plan for succession led to years of litigation among the surviving family.  Nevertheless, a deceased founders’ intentions and plans may or may not survive the transition to new leadership resulting in restructuring of the surviving entities and relationships.  In very rare cases, there may be evidence that the restructuring was not based religious beliefs but rather on self-dealing, fraud and conspiracy.


Churches are typically volunteer organizations with a few paid leaders and usually a greater number of unpaid leaders.  Over the years or decades, as people come and go from these positions, without accurate records, identification of the correct and complete version of the governing document in force might become problematic.  It can be a crucial question.

In Nation Ford Baptist Church, Inc. v Davis, 2022-NCSC-98 (NC 2022), the trial court and intermediate court of appeals denied the motion to dismiss of the church based on church autonomy grounds and the Ecclesiastical Abstention Doctrine.  The pastor was terminated by the church board.  The pastor alleged the correct version of the bylaws required a congregational vote and did not authorize the board to act unilaterally.  The church alleged that the correct version in effect did give the board unilateral authority to terminate the pastor.  The church also alleged the letter agreement employing the pastor expressly stated the employment was “at will.”  The pastor alleged the correct version of the bylaws was submitted by the church as an attachment to a bank loan application.  The North Carolina Supreme Court affirmed the trial court and intermediate appellate court’s denial of the motion to dismiss by the church as to some theories and not as to others.  The search for the correct version of bylaws was held to be an issue that could be resolved applying Neutral Principles of Law.  The demand for reinstatement, however, could not be.  The effect of the letter agreement was left to the trial court to determine, if it could be, using Neutral Principles of Law.

Churches that periodically, annually or bi-annually, confirm the version of the governing document in effect in their official meeting minutes avoid the scenario in the reported case.  Prior versions should in official meeting minutes be officially disavowed as in effect.  In the reported case, the Supreme Court noted the allegation that the congregation dwindled in size under the former pastor by 60%.