Author: churchlitigationupdate

DREADED ERISA DOES NOT APPLY

The Employment Retirement Income Security Act of 1980 was a logical attempt to structure and organize employee retirement plans to take pressure off social security, improve employee confidence sufficiently to encourage savings, and to regulate the tax sheltered nature of retirement savings.  Like all federal mandates that are also entangled with the federal income tax it is complicated and regulations it spawned were more so.

From inception ERISA exempted churches.  Church employers could create less regulated employment retirement plans.  The question then became whether para-church organizations could do so.  In Medina v Catholic Health Initiatives, Slip Op. (10th Cir. 2017), the United States Court of Appeals for the Tenth Circuit affirmed a Colorado trial court.  The question was whether Catholic Health Initiatives (“CHI”), a para-church organization of the Roman Catholic Church was a “principal-purpose organization” that would be exempt from ERISA.  CHI operated 92 hospitals, had 90,000 employees in its retirement plan, and the plan had $3 billion in assets.  While the historic connection between churches and hospitals is becoming lost in the mists of time, it remains, and many hospitals in existence would not have existed in the author’s life time had no church stepped up to found them.  But, in the post-modern era, the church hospitals, those that have not been bought or replaced by secular ownership, have grown to proportions that obscure the roots.  Because of the size of these institutions, they must be managed by modern methods and that tends to make them look less like para-church organizations.  Nevertheless, the 10th Circuit upheld the ruling that CHI was a para-church organization, i.e., a principal-purpose organization, and therefore, exempt from ERISA.

The opinion omits a discussion of why the Plaintiff was aggrieved by an employee retirement plan that was not subject to ERISA.  The Plaintiff sought class action status so the compliant had to be the same for many participants to meet the numericity requirement.

CHILD SEXUAL ABUSE AND THE ECCLESIASTICAL ABSTENTION DOCTRINE

Current recommendations to church employers is to purchase from a reputable vendor background investigations on prospective new hires and volunteers that will work with children.  These investigations are no longer expensive.  While their reliability record is not perfect, background investigations can be proof the church employer was not on notice of the evil proclivities of a prospective hire or volunteer.

Background investigations generally available do not find expunged criminal records, withdrawn or dismissed criminal charges, or acquittals.  Also, the public sometimes is unaware that an acquittal is not a judicial finding of actual innocence.  Trials can be messy.  Witnesses can vanish, forget, or simply lack credibility no matter how truthful they might be.  That might result in an acquittal but not because of innocence.  Moreover, the ability to inquire deeply into a dismissed criminal charge or an acquittal is often outside the ambit of the internet unless news media coverage documented some of the circumstances.

The opinion of the Missouri Court of Appeals for the Eastern District in BB v Methodist Church of Shelbina, et al, Slip Op., 2017 noted the two background investigations conducted on the later criminally convicted child molester and no doubt that influenced the decision to affirm summary judgment for the church and denomination.  Neither investigation revealed a prior acquittal.  There was not much more the church could do in that respect.

The opinion is worth readying simply because it is one of the better apologetics for the limitations on church employer liability for the criminal misconduct of an employee.  Missouri has found that the Ecclesiastical Abstention Doctrine prevents mere negligence claims that require a court to delve into ecclesiastical matters.  Also, an employee guilty of criminal misconduct is outside the course and scope of employment which is a traditional limitation on employer liability.

In this case, the alleged sexual molestation occurred at the home of the youth pastor.  Because the abuse did not occur on church property and, indeed, occurred in the youth pastor’s home, the court held the church did not have control of that environment.  There was an allegation that a church staff member knew kids were going to the youth minister’s home, but the court held if true that was at best a negligence claim and would require an ecclesiastical inquiry.  Almost no employers have control over an employee’s home and churches are not different in that respect.  The Plaintiff argued “grooming” occurred on church property but the court held “grooming” was not sexual abuse.

HIERARCHICAL CHURCH CORRALS

To escape from the confines of the hierarchical church governing rules and documents a local church will often allege all sorts of things.  In Alpine Methodist v New Jersey United Methodist Church, Slip. Op. (Sup. Court NJ App. 2017), the plaintiff alleged it pre-existed the existence of the denominational authority and therefore was not subject to the property reversionary requirement in the denominational manual.  However, the Court found there was no evidence to explain that after the denominational authority was established the plaintiff had acted as anything other than a full member for many decades.  The plaintiff also alleged that a retired pastor was guilty of misappropriation of funds.  The denomination heard the allegation and refused to proceed with a disciplinary action.  The plaintiff alleged that the failure to act left the plaintiff with no forum or relief.  But, the Court held the refusal by the denomination to engage a disciplinary process was ecclesiastically binding.

Interesting in the case was that the Plaintiff, the local church, engaged a private investigator to conduct an inquiry into the alleged financial misconduct.  The evidence of financial misconduct did not lead the local church to seek a criminal charge or to engage in its own disciplinary complaint with the denomination.  Instead, the church sought relief in court.  Interesting, too, was that the private detective admitted that the local church was subject to the denominational manual.

Retention of a licensed private detective, who in this case was also a retired police officer, was probably a good call in order to document what happened to the money.  The best practice would be to have the detective report to the church legal counsel and work under the supervision of counsel.  A certified public account should also have been consulted to review the opportunities for financial misconduct inhering in the church’s financial system and suggest reforms.  If criminal charges, a collection action, or a disciplinary proceeding are not preferred, one or all three should only be deferred if the wrongdoer signs a written admission of all of the known facts about the financial misconduct.  Wrongdoers are usually gone, dead or insolvent, so collection actions are typically pointless.

THE CHURCH AND THE INTERNET — 2ND ED

We reported on February 24, 2017 about the very strange case in which a person was baptized by a church but sued the church because the baptism was announced on the church website.  Plaintiff alleged that when he returned to his native country he was identified as a convert and had to kill a captor to escape his own martyrdom.  The Plaintiff claimed he had not consented to membership in the church and the church apparently agreed.  Thus, the Plaintiff claimed he was not subject to the church’s standard practice of announcing baptisms on its website.  Indeed, the Plaintiff alleged someone promised him his baptism would remain private or possibly secret.

The trial court dismissed the case pursuant to the Ecclesiastical Abstention Doctrine.  The Supreme Court of Oklahoma issued an opinion in February 2017 holding publication of the baptism on the internet was protected under the Doctrine.  The February 2017 opinion was withdrawn in Doe v First Presbyterian Church USA, 2017 OK 106 (www.oscn.net).  The opinion issued December 19, 2017 to replace the prior opinion reversed the trial court by holding that there was a question of fact for a jury as to whether Plaintiff was promised baptismal privacy and whether that promise was breached.  The question of whether announcement of the baptism on the internet was shielded by the First Amendment was abandoned by the Supreme Court of Oklahoma.

It is possible the Justices of the Supreme Court of Oklahoma have never served in church leadership positions which were required to assemble or certify a membership list.  Determining whether someone is a member of a church may require only secular records (when they exist).  But, as prior decisions of the Oklahoma Supreme Court, including the opinion under discussion, have expressly acknowledged, churches are “spiritual communities.”  To determine whether someone is a member of a “spiritual community” will often as not require determination of ecclesiastical issues.  In other words, it may not be possible to determine church membership using the same methods by which it might be determined at a country club.  Also, most churches make baptism an integral part of the process to achieve membership.

The Supreme Court of Oklahoma seemed to assume that church membership provides a bright line.  It will often be a fact question because membership is a process in many churches, sometimes involving many steps.  The march of catechumens is not always in a straight line.  The Supreme Court of Oklahoma also seemed to assume that baptism by itself was not an affirmative act of membership sufficient to submit the baptized to church governance.  It seems likely the courts of Oklahoma are about to receive a full education in baptismal doctrines.