Category: Parachurch Organizations

THE NOT RELIGIOUS ENOUGH TEST OF THE 9TH CIRCUIT – 2ND VERSE

In December 2018, as reported herein, the United States Court of Appeals for the 9th Circuit decided Biel v St. James School, 911 F3d 603 (9th Cir. 2018), by holding that the school teacher could sue the Catholic school making federal employment law claims. The 9th Circuit held that being required to teach Catholic religion thirty minutes a day was “no religious requirement for her position.” Likewise, the requirement, and the apparently mandatory training that went with it, that Catholic religious doctrine be incorporated in other lessons was “no religious requirement for her position.”

An appeal was taken to the 9th Circuit En Banc. This is a not often used procedure by which the three judge panel opinion could be accepted for review by all the sitting judges of the court of appeals for the 9th Circuit. In Biel v St. James School, Slip Op. (9th Cir. 2019), the majority of the 9th Circuit judges did not vote to review the three judge panel decision reported in 2018. However, nine of the 9th Circuit appellate judges dissented from the denial of en banc review. The 9th Circuit is authorized to employ 29 appellate judges appointed by the President and confirmed by the Senate. The dissent criticized the original panel decision in a written opinion, which is unusual. The dissent took the factual position, summarized above, the school teacher was religious enough to trigger First Amendment protections for the Catholic school and disqualify the school teacher from suing pursuant to federal employment statutes. The dissent noted the 9th Circuit was by its opinion at odds with the decision of the other United States Courts of Appeal. Also, the dissent alleged the legal test the 9th Circuit developed conflicted directly with the leading decision of the United States Supreme Court in Hosanna-Tabor Evangelical Lutheran Church & School v E.E.O.C., 565 US 171 (2012).

Will the nine appellate judges of the 9th Circuit that dissented be a loud enough voice to reach the ears of the United States Supreme Court should an application be made for certiorari by St. James Catholic School? For para-church organizations, including church schools, in the western United States, this could be of serious import. If the 9th Circuit decision stands, employment insurance costs, for example, will rise considerably. Indeed, rates may go up across the nation to funnel resources to litigation costs and settlements arising out West that are insured. Organizations that reduced or even eliminated employment litigation insurance coverage, which would be a bad judgment call in any event, may again find themselves at risk.

DAUGHTER CHURCH DNA TESTS

Although usually the governing documents of a local church or a denomination, or both, instantly resolve the question of whether a local church is, indeed, a member of a denomination and under its ecclesiastical jurisdiction, sometimes it is not clear. Many denominations have humble origins among immigrant communities, the uneducated, and the poor.

In Sacred Heart Knanaya Catholic Community Center Board v St. Thomas Syromalabar Diocese of Chicago, Slip Op., 2019 IL App 2d 180792, the appellate court affirmed summary judgment dismissing the case on Ecclesiastical Abstention Doctrine grounds. The Plaintiff claimed it was not a church at all and not under the jurisdiction of the denomination, in any event. The Plaintiff sued the denomination because the denomination would not authorize a third-party church to celebrate mass at the community center for a special program. The reason for refusal was not reported in the opinion. The denomination provided minimal proof the community center was under its religious jurisdiction. However, it was enough. The community center may have been able to disprove it was part of the denomination, but inadequate legal representation may have waived the right to do so.

Two lessons emerge. The Plaintiff should have engaged counsel experienced in civil litigation. Just because someone is a “lawyer” and has a license to practice does not mean the attorney is a civil case lawyer. (I have avoided the label “trial lawyer” because most civil cases no longer reach trials.) Just because a lawyer is part of the church membership does not make that lawyer qualified to handle a civil case. The other thing the community center board should have done, rather suing for tortious interference with contract and money damages, was to seek a declaratory judgment regarding its lack of affiliation with the denomination. That would likely have required application of neutral principles.

WHEN IS A CHURCH NOT A CHURCH?

Many church and parachurch organizations have both observable religious and secular operations, missions and facilities. Many such have also found that secular income can fill in gaps that volunteer donations, such as tithing, offerings, and gifts, sometimes cannot. Viable churches that can raise enough money to pay a small staff and keep a facility are usually doing all their members will support. Thus, secular income may become a lifeline, which is why many churches also own daycare centers and other businesses. Of course, there are some churches and parachurch organizations that seem more about their secular business interests than their religious.

In the Matter of the Application of the Holy Spirit Association for the Unification of World Christianity, Petitioner, 2019 NY Slip Op 31678 (U), the non-profit religious organization, which seemed from the opinion to be at the same time a church and a parachurch organization, owned a corporation that owned a hotel in Manhattan. Permission was sought for a $20 million mortgage, $18.5 million to be used to buyout union employment contracts with the hotel and the transaction costs. The purpose of the buyout was to improve the profitability of the hotel. The New York Attorney General objected to the application because the AG did not believe the mortgage was in furtherance of a religious purpose. The Petitioner set about proving it was a church owner of secular businesses by proving it was a church holding worship services, employing a pastor, and conducting a seminary in some of its space. Also, some space was leased to other non-profit organizations. It also claimed $5.7 million in annual donations from congregants. The Court granted the petition for approval holding that the Court had to accept the representations of the church petitioner as long as it did not appear on its face to be a sham or proven by the AG to be a sham. The AG did not attempt to do so.

While the legal proceeding described above would never occur in most states, these issues most often emerge when the issue of tax exemption arises. Churches and parachurch organizations with dual identities should not assume their religious identity is obvious and be prepared to document it. Corporate records like board minutes that memorialize votes on religious mission efforts as well as secular business management are probably dispositive. Such church organizations can also organize and own trusts that then in turn own their secular business interests for the benefit of the church.

EMOTIONAL INJURY CLAIMS

It is common that an aggrieved claimant in church litigation will sometimes claim that they suffered emotional distress that resulted in psychological injury. There is a tendency to be dismissive of these claims. That is not surprising given that in many parts of the United States there is no commitment to treatment of mental illness regardless of its cause. Also, mental illness or emotional injury do not typically present with objectively measurable evidence of causation. Treatment is to the untrained seemingly mystical or doubtful. Deposing mental health professionals can be among the more frustrating depositions in civil practice because lawyers tend to think in concrete terms for persons trained in the fine arts but mental health professionals tend to speak, and probably think, in terms of subjective abstractions. That does not mean one is true and the other false, although in concrete thinking that is the snap judgment often made, but it does mean the two are difficult to reconcile.

In Stevens v Brigham Young University Idaho, Memorandum Decision and Order (D. Idaho, 2019), the student plaintiff self – reported “an inappropriate non-academic relationship” with a faculty member and apparently sued regarding the relationship. The court opinion resolved three motions: 1) a claim of common interest attorney client privilege between the university and the church to protect the work product interview notes of a staff attorney of the university; 2) a motion to compel an independent medical examination of the plaintiff because of her claim of emotional injury; and 3) the university’s motion to enforce a waiver by the plaintiff of the priest – penitent privilege. The court held that the church and university had not presented sufficient evidence of cooperation in formulating a common legal strategy to support a claim of common interest privilege. However, the attorney’s work product notes were not discoverable in any event, after in camera review by the judge, because the plaintiff did not prove undue hardship or substantial need for an exception to the work product privilege. The court ordered the requested independent psychiatric medical examination of the plaintiff and refused to impose most of the limitations or requirements demanded by the parties. The university’s demand that plaintiff’s priest – penitent privilege be treated as waived was denied. The plaintiff consulted various church leaders both in the church and the university to obtain an “ecclesiastical endorsement” so she could return to the university as a student. However, the “ecclesiastical endorsement” was not forthcoming and plaintiff did not sue regarding those decisions. Plaintiff’s experts quoted those consultations in their written reports of their opinions which was the basis of the waiver claim by the university and the church. But, the court entered an order making those parts of the reports inadmissible at trial. Because there was no claim by the plaintiff on the sought endorsements, the court did not think the privileged consultations were placed at issue in the case and denied the waiver. The rulings on the three motions did not resolve the case and it proceeded.

Lawyers that intend to coordinate a defense with a sponsoring church or other para-church organization should do so with a signed undertaking that formalizes the relationship and specifically authorizes exchanges of attorney work product and otherwise privileged communications between the entities, their counsel and jointly engaged experts, especially including fact witness interviews. An omnibus agreement is too often forgotten in the mists of time so a separate agreement customized for the pending case should be reduced to writing. No assumption about this should be made; denominational governance documents may or may not be sufficient for the particular case. Church lawyers that do not routinely defend bodily injury and emotional distress claims should consult with lawyers that do so that effective discovery of these claims can be engaged. Spend the money needed to engage fully qualified experts, and not just church or para-church staff, or settle the case.