Saturday, January 3, 2009

Arguing the Episcopal Church Cases (I)

This will be the second in a series of posts anticipating the opinions by the California Supreme Court in The Episcopal Church Cases (No. S055194), which will be announced at 10:00 a.m. Monday, January 5 on the Court's Website. (Yes, there will be more than one opinion---see my preliminary predictions for an explanation.) The first, introductory post may be read here.

I want to point out some of the questions which were touched upon in the oral argument, and on which we might receive some guidance when the Supreme Court issues its ruling. The first of these is what I might call the "once you sign on, your property is ours forever" argument. It was posed most squarely by a hypothetical asked of Heather Anderson, counsel for ECUSA, by Justice Baxter: Suppose (I am paraphrasing the Justice here) an already established parish, which owned a multi-million dollar property, wanted to join the Episcopal Church (USA), but suppose it wanted to guard against confiscation of its property if it later changed its mind and decided to withdraw. Assume it knows about the Church's Dennis Canon; assume that we decide to enforce it, and that it knows about this case. What could [that parish] do?

You could have heard a pin drop in the silence that followed that question. Eventually, however, with a little help from Justice Corrigan, Ms. Anderson responded that the parish's only option would be not to join ECUSA in the first place. As Justice Corrigan put it, "It's like any other civil agreement: two parties can agree to whatever they want. . . The Church isn't bound to admit them . . . it can say: 'Fine---you want to join us, here are our rules.'" 

Now, this was not exactly the choice that faced St. James when it joined ECUSA. When it first became a mission, in 1947, it owned no property of its own. A developer had left land for it to use in building a church, but title to the land was held temporarily by the Diocese of Los Angeles, in trust for the nascent parish. St. James incorporated in 1949, and thereafter took title to that parcel, which (along with three other parcels it acquired subsequently) it has held in its name ever since. ECUSA first adopted the Dennis Canon in 1979 (or so it claims; maybe it didn't, but that evidence is not before the Court in this case). So the question becomes: when it agreed originally to be "forever under" the constitution and canons of both the Diocese and of ECUSA, did that agreement include having its property made subject to a trust in favor of those entities, created unilaterally by a national canon enacted some thirty years later?

According to Justice Corrigan, "forever" means forever. You sign on to be an Episcopal church, and so long as the Dennis Canon remains on the books, you cannot take your property elsewhere if you leave. When she asked Eric Sohlgren, the counsel for St. James, how he could contend otherwise, his answer was that in 1949, St. James agreed to be bound by the Episcopal Church's canons only in spiritual matters, and not in property matters. He argued that a voluntary association like the Episcopal Church (USA) has no power to "interfere" with how its members hold their own individual property.

That would seem to be a plausible argument on first hearing. If you join the Elks or the Lions, would you expect that they might in the future adopt bylaws that said your property was held in trust for them, and that those bylaws would bind you? There is, of course, a slight difference in the case of a church: the property it holds is permanently dedicated to a charitable religious purpose, and is not held for private gain or profit. Unlike your home, church property may not be left to your children. But does that change the result? Why should ECUSA have the power to say that a church once dedicated must always remain dedicated to ECUSA, and to no other denomination whatever?

We are dealing here with matters of contract law. The freedom of two parties to contract in law is limited only by the (admittedly rather vague) bounds of "public policy". Thus, a contract in the Mafia sense could never be enforced in court. Nor could a "contract" by which you agreed to be somebody else's slave. And neither could you sell your house to a person who contracted never to resell it to any Hindus, or Buddhists, or Episcopalians.

So there are limits to what one may agree in a contract. As described by Justice Corrigan, the contract between St. James and the Diocese in 1949 was this (again, I paraphrase): "St. James agrees to become a parish of the Diocese of Los Angeles. The Diocese agrees to provide St. James with a pastor of the parish's choosing (subject to the bishop's approval, of course), and a bishop to confirm its baptized members and to provide it with overall spiritual guidance and direction. And St. James agrees that it will always ("forever") be bound by whatever canons and rules the assembled parishes of the Diocese see fit to adopt in convention, in accordance with the Diocesan constitution. The Diocesan equivalent of the Dennis Canon was later duly adopted in convention. So it is binding on the parish of St. James---end of discussion."

Justice Corrigan was a little troubled by the issue of foreseeability in that argument. Suppose you and I contract to be bound by any provision we may agree upon at some future time. Such an "agreement to agree" is not a contract. Instead, if we do agree on some future terms, then that future agreement is our contract, not the one that we make now. So how was a court to be able to tell that Justice Corrigan's version of the 1949 contract was not some unenforceable agreement to agree on something in the future? How could one say that it was "within the contemplation of the parties" in 1949 that the Diocese might enact a Dennis-type canon in the future?

The only evidence of what the parties agreed to back then is the written contract. The articles of incorporation recited that St. James would be subject to the constitution and canons of the Diocese of Los Angeles and of the Episcopal Church (USA); the current versions of those instruments were physically attached to the articles and incorporated by reference into them. However, Mr. Sohlgren also pointed out that the articles contained a qualifier on their very first page that their provisions (including the attached constitutions and canons) "would always conform to State law" (or words to that effect). So if the incorporated canons always had to conform to State law, Mr. Sohlgren asked very reasonably, how is it that they could bypass California's statutes that provided that only the owner of real property could create a trust with respect to it? 

(Some legal terminology, in order to understand what follows: The creator of a trust in law is the trustor, who owns the property that is placed into a trust; the person who carries out the directions of the trust is the trustee; and the person for whose benefit the trust is established is the beneficiary. Thus, in the formulation of Eric Sohlgren, in response to a question from Justice Werdegar as to why the Dennis Canon did not apply to the property of St. James: "Beneficiaries don't create trusts.") 

Mr. Sohlgren's question, restated in legal terms, is then: "By what power or authority is a trust beneficiary, even if it is a church, able to create in California a trust without the signature of the trustor on the trust?" That is a question that goes to the very nub of the problem, and it has no easy answer. 

The Fourth District Court of Appeal had answered it by creating a "legal fiction"---that is, something which everyone knows is not true, but which the law presumes is true. (When Dickens' Mr. Bumble was told that the law presumes that a husband has control over his wife, he replied, "If the law presumes that, the law is a ass." It is thus worthy of note that the author of the Fourth District's opinion, Presiding Justice Sills, wrote an earlier opinion in which he cited Mr. Bumble [see n. 3 in the concurring opinion].) According to Justice Sills and his colleagues, the Episcopal Church (USA), since it wrote and enacted the canon creating the trust, is a trustor in the eyes of the law---even though it did not own the property. And since California law provides that only a trustor may create a trust, then there is no problem: as a (legally fictitious) trustor, ECUSA could enact its Dennis Canon, and thereby create a trust on all the church property it did not own.

It is a nice circular argument, don't you think? Unfortunately it does not help to answer Mr. Sohlgren's question; it merely evades it by dodging behind a legal fiction. Now consider the answer to Mr. Sohlgren's question given by Justices Corrigan and Chin. According to them, the Dennis Canon simply follows the dictates of the United States Supreme Court in Jones v. Wolf. As I have explained in this post, Justice Blackmun, writing for the majority in that case, stepped out of his judicial robes for a moment and offered some friendly legal advice to the hierarchical churches who might feel threatened by the "neutral principles" approach given sanction in that decision:

The dissent also argues that a rule of compulsory deference is necessary in order to protect the free exercise rights "of [443 U.S. 606] those who have formed the association and submitted themselves to its authority." Post, at 618. This argument assumes that the neutral-principles method would somehow frustrate the free-exercise rights of the members of a religious association. Nothing could be further from the truth. The neutral-principles approach cannot be said to "inhibit" the free exercise of religion, any more than do other neutral provisions of state law governing the manner in which churches own property, hire employees, or purchase goods. Under the neutral-principles approach, the outcome of a church property dispute is not foreordained. At any time before the dispute erupts, the parties can ensure, if they so desire, that the faction loyal to the hierarchical church will retain the church property. They can modify the deeds or the corporate charter to include a right of reversion or trust in favor of the general church. Alternatively, the constitution of the general church can be made to recite an express trust in favor of the denominational church. The burden involved in taking such steps will be minimal. And the civil courts will be bound to give effect to the result indicated by the parties, provided it is embodied in some legally cognizable form. [Fn. omitted.]
"Alternatively, the constitution of the general church can be made to recite an express trust in favor of the denominational church." This is the sentence that, to paraphrase an ancient expression, "launched a thousand suits." First of all, it is legal advice, not part of the legally binding holding of the case. Justice Blackmun is here speaking like a lawyer, not a judge. And what lawyers say is not the law. 

Yet for quite a number of courts (including most recently the New York Court of Appeals), it is the law according to Justice Blackmun (just as Roe v. Wade was), and so it is good enough for them: 
"Is there 'an express trust in favor of the denominational church' in the church's constitution?" 

"Well, no, not exactly, but it is in the church's canons.

"That's all right, then---the canons are just as authoritative as the constitution, even if Justice Blackmun didn't say that in so many words. We all know it, so it must be true. The trust is therefore valid and enforceable against the parish. Case dismissed."

This summary form of conclusion, based on nothing more than a piece of legal advice tricked out in the form of a judicial opinion, has been adopted by many of the courts that have addressed the Dennis Canon (the cases are summarized and discussed here, with references to longer and more detailed articles in the literature). The string of courts who have thus evaded the real issue impressed Justice Ming Chin, even though they were decisions reached under the laws of each of those particular states, which differed in significant respects from the laws of California. (For an example, see the New York statute referenced in the previous link.) Justice Chin, however, apparently felt more comfortable going along with the crowd. He asked Mr. Sohlgren at the oral argument: "Haven't most, if not all, of those [out-of-State] cases gone against you?" The implication of his question clearly was: "Shouldn't that be good enough for us?"  

No, it is not good enough, because it avoids the really troubling problem under California law: By what right does any church get to impose a trust on property contrary to California's own laws? (Or, as Chief Justice George expressed it in a question to the Diocese's counsel: "But what is the legal structure? There is a deed [in the parish's name], after all . . . Is there some trust in favor of the [national] church, and if so, can that be created other than through a legal instrument?") Just because they express a trust in their constitution or canons, why does that private piece of legislation supersede and render irrelevant any State legislation to the contrary? After all, even Justice Blackmun recognized, in the portion of his obiter dictum which somehow is rarely quoted by those who blindly accept the other part of it, that "the civil courts will be bound to give effect to the result indicated by the parties, provided it is embodied in some legally cognizable form" (emphasis added). 

What does "legally cognizable form" mean? Ay, there's the rub. It is another wonderful example of circular reasoning! If it is in "legally cognizable form", the "civil courts will be bound to give effect" to it, and if "the civil courts give effect to the result indicated by the parties", then it must be "embodied in some legally cognizable form"! Isn't such argument wonderful?

So is a trust expressed in a church's constitution or canons expressed "in legally cognizable form"? Well, in California not exactly, since to be a trust for real property in California, it has to be a writing signed by the trustor (Probate Code section 15206). And it simply will not do to resort to the legal fiction that the national church is the "trustor", since the only authority for that legal fiction is the dictum that includes the statement that the trust must be in a "legally cognizable form." To reason as did the Fourth Appellate District, or the New York Court of Appeals, is to go around in circles, forever chasing Justice Blackmun's infernal dictum.

For Justice Corrigan, the solution to this dilemma was to regard the articles of incorporation, signed by the parish, as a sort of perpetual grant of power of attorney to the national church, which included the power subsequently to declare a trust on the parish's property. Forget that to be valid again under State law in 1949, a power of attorney had to be in a legally cognizable form. (It had to state the intent to designate the authority, the terms of the grant, its duration and scope, and so on and so forth.) And forget that no court has ever read articles of incorporation as constituting a power of attorney, except with regard to their designation of an agent to receive service of process. Finally, forget that a power of attorney, once granted, may be revoked by the grantor, except under unusual circumstances not applicable here. Justice Corrigan seemed determined to find any way she could to hold the parish to its promise of "forever", even if the specifics of that promise in this case were hopelessly vague.

Thus we come to the final answer in oral argument which was  given to Eric Sohlgren's heart-of-the-case-piercing question. For Justice Werdegar (and perhaps Justices Corrigan and Kennard, too), the answer lies in the statute which the legislature adopted two years after Justice Blackmun's opinion, Corporations Code section 9142. And to do that argument justice, we will need a separate post.

(To be continued.) 

1 comment:

  1. I very much appreciate the paragraph which begins: "We are dealing here with matters of contract law." Thank you for your reference to the Mafia and slavery! Even the California public schools have strictly enforced anti-bullying polices. The Episcopal church (and possibly the CA Supreme Court) is being revealed through these court cases as a bully, at best.