Sunday, April 11, 2010

Arguing the Virginia Cases (II)

[UPDATE 04/14/2010: There are more accounts of the oral argument now published (h/t: Transfigurations), each providing a perspective the other accounts have not. Julia Duin of the Washington Times says that the Court's questioning at one point reduced ECUSA's attorney Heather Anderson to stammering in response, "I don't have an answer -- I don't know." Frank Green of the Richmond Times-Dispatch provides more of the questioning of the other attorneys. It looks as though the justices may have zeroed in more on the applicability of the statute in accordance with its terms ("branch", "division", "attached") than on its constitutionality per se. Ditto according to the AP account here.

Various accounts have mentioned a recusal by some of the justices. I have been provided with a definitive explanation of the matter, which I shall share here:
On the recusal issue, three of the seven currently active Justices (including Justice Mims, who was appointed to the Court just a few weeks ago) did not hear the case, leaving only four active Justices. There are four Senior Justices who normally fill those vacant positions for specific arguments, but two recused themselves and one apparently has age or health related issues that have kept him from sitting on any cases for more than a year. So the case was heard by only five justices -- four active and one senior. The five Justices who heard the case were:

The Honorable Leroy Rountree Hassell, Sr. (Chief Justice)
The Honorable Lawrence L. Koontz, Jr.
The Honorable Cynthia D. Kinser
The Honorable LeRoy F. Millette, Jr.
The Honorable Elizabeth B. Lacy (Senior Justice)
Very interesting, indeed. We will know by June how it all turns out.

[UPDATE 04/13/2010:
BabyBlue was at the arguments today, and has posted her account of them here. The Anglican District of Virginia has a statement about the arguments, with quotes from its lead counsel Steffen Johnson, here. John Chilton at The Lead offers a very interesting perspective here. Note that according to BabyBlue, a decision is not expected for about two months, when the current term ends.]

In my previous post, we looked at the points of error and questions presented in these two appeals, according to the briefs filed by ECUSA and the Diocese of Virginia. (All briefs referenced may viewed and downloaded from this site.) In this post, I want to consider the counter-contentions made by the CANA parishes, as well as look at issues surrounding the constitutionality vel non of the statutes involved. (The number of CANA parishes involved in the appeals has been reduced from the original eleven to nine, since two of the parishes which did not own any real estate were able to reach a settlement with the Diocese. Note that the "Schori policy" -- "no negotiations with churches who will be our competitors" -- apparently kicks in only if real property is involved.)

The Diocese and ECUSA each mount a two-pronged attack on Virginia's "division statute", § 57-9 of the Virginia Code. Because there is a presumption that all statutes are constitutional, their first line of attack is directed at its applicability to the situation in accordance with its terms. Essentially, those terms provide (see my earlier post for the full text) that if a "division" occurs in "a church or religious society", to which there is "attached" a congregation whose property is held in trust for it by trustees (as Virginia law until recently required -- see below), then the congregation may elect to hold a vote to determine to which "branch" of the divided "church or religious society" it wants to belong, and the majority decides the matter. In their briefs, both ECUSA and the Diocese take issue with how Judge Bellows eventually defined and applied the terms I have just included in quotation marks.

Judge Bellows reached his conclusions, however, only after hearing five days of historical and expert testimony concerning the meaning and prior applications of the statute. Twenty-nine circuit court orders from different Virginia counties approving petitions from congregations which had previously applied for a "conclusive determination" under the statute were entered into evidence, and form part of the record on appeal. It is safe to conclude that there is ample evidence to support Judge Bellows' conclusions with regard to applying the statute to the instant situation, and appellants face an uphill road convincing the Virginia Supreme Court that he misread the statute, or applied it mistakenly to the facts.

The following passage from the CANA congregations' brief in response to ECUSA's arguments encapsulates the problems with its contention that a "division" in ECUSA can occur only when General Convention consents to it:
In fact, Professor Mullin [ECUSA's expert witness] admitted that, in his own public writings and statements, he had used the term "division" to describe church splits that he insisted for purposes of this litigation are not divisions. For example, he initially testified that ECUSA has never divided-not even in the Civil War, when the Episcopal Church in the Confederate States was formed. But as he admitted on cross, his own book calls that very split a '''division within the Church.'" JA 2752. And when asked about an article that quoted him as saying ECUSA had experienced just a "few divisions," he admitted that when he "lapses to the more common, ordinary meaning of the word," even unapproved splits-such as the 1873 disaffiliations that led to formation of the Reformed Episcopal Church-qualify as a "division." JA 2744-46. Not surprisingly, the circuit court found Professor Mullin's testimony to be less credible than that of Professors Valeri and Irons. JA 3918. And the concessions he ultimately gave strongly support their conclusions.
And as I noted in my earlier post, ECUSA and the Diocese appear to be at odds with regard to the relative strength of this line of attack against the statute. For ECUSA, it is the very first argument it makes on its appeal, and thus ECUSA must consider it the most important. But the Diocese of Virginia relegates it to third position, after its arguments that the trial court erred by not applying additional "neutral principles" to the case, and by ruling that neither the Diocese nor ECUSA could beneficially hold property under Virginia law.

The appellants' second prong of attack on the division statute is to argue that, as the trial court applied it to them and the CANA congregations, the statute is unconstitutional. This argument caused the Virginia Attorney General to intervene in the case, in order to defend the Commonwealth's interest in upholding the constitutionality of its statutes. I think his opening summary is the most concise response to the contentions made by ECUSA and the Diocese:
The statute by its very terms is limited to situations where a congregation's property is held in trust. If a congregation's property is held by a corporation, Virginia Code § 57-16.1, the local bishop, or the some other ecclesiastical officer, Virginia Code § 57-16, the statute does not apply. Thus, at least since 1942, with the adoption of Virginia Code § 57-16, denominations have had perfect liberty to avoid the application of the statute simply by changing the method of holding church property.

This ability to avoid the application of § 57-9(A) effectively resolves all of the constitutional claims of the Episcopal Church and the Protestant Episcopal Church in the Diocese of Virginia ("Diocese"). First, the Commonwealth is not establishing a religion or even mandating that all church property disputes be decided in a particular way. Instead, § 57-9(A) provides that if a church voluntarily chooses to hold property by trustees, then property disputes will be resolved in a particular way. Second, the Commonwealth is not burdening the free exercise rights of the appellants. Nothing in the Episcopal Church‘s theology requires that church property be held by trustees and the Episcopal Church and Diocese frequently utilize other methods of holding property. App. 4151, 4151 n.37, 4167. Third, the Commonwealth is not taking private property without just compensation. Rather, § 57-9(A) simply establishes a default rule for the resolution of church property disputes when the property is held by trustees. In this sense, it is indistinguishable from a statute distributing the property of an intestate decedent. Just as a person may write a will and avoid the intestate decedent statute, a church may change the method of holding property and avoid § 57-9(A).
The Diocese in its reply brief tried to downplay the significance of the parties' stipulation that its Bishop in fact held title to some 29 separate pieces of property in his name -- a fact cited by Judge Bellows in ruling that the statute did not interfere with the Diocese's "free exercise" of religion:
The Congregations’ many references to “29 properties” (e.g., CANA Br. at 31, 44) are misleading. Eighteen of those 29 properties are not used by congregations at all.3 Only six of those properties are used by churches (one as clergy housing and five for worship). JA 4006-10. One is used by an Episcopal congregation excluded from appellee St. Margaret’s Church. JA 4007. The other four churches that use property held by the Bishop began as Diocesan missions. Title has not yet been transitioned, and there has been no event or request requiring a change. See JA 3993-94.
3 Five of those 18 properties are connected with a development center related to the Diocese, one is associated with a cemetery, and 12 either are undeveloped land or are not used regularly. See JA 4006-10.
Try as it might, the Diocese is forced to concede that when it wants to hold legal or beneficial title to parish property, it has ready ways in which to do so that do not expose it to any risk of coming under the terms of § 57-9(A). I am compelled to agree with the Attorney General that this fact "effectively resolves all of the constitutional claims of the Episcopal Church and the . . . Diocese of Virginia . . .". (For a contrary view, see this law review note [caution: 51-page .pdf download], which reaches the conclusion that § 57-9 violates the free exercise clause of the First Amendment, no matter how narrowly or broadly it is construed. Please be aware, however, that the author of the note, now a third-year law student who expects to graduate this June, worked on the trial below with the Troutman Sanders firm, who is counsel for the Diocese of Virginia.)

So what is left? There are still some very intriguing issues surrounding the historic doctrine in Virginia law that for more than 200 years has prevented a larger church body from holding any real property in trust. This doctrine is a vestige of English common law, as I traced in this earlier post, as well as of colonial times, when the reaction in the General Assembly to having been taxed for so long to support the official State Church of England in Virginia was to confiscate (in 1802) all of its former properties and order them sold at auction, as related in this historical account:
The Revolutionary War brought a new order of things in the Church life. The new General Assembly enacted laws that were not only embarrassing to the old Vestrys, but declared all Vestrys dissolved; and defined the restricted powers of the new Vestrymen, who were to be chosen by their respective parishioners, or members of the Protestant Episcopal Church, and no more to be elected by all the freeholders and housekeepers. The church had been shorn of support from direct taxation. Surely this was a new order of things. All religious sects, denominations or churches placed on equal footing and "could be supported by their respective Congregations." Many good churchmen allowed their zeal to waver in 1776, when an Act of The General Assembly suspended payment of salaries to their ministers by special taxation. But when another Act in 1802, confiscated their Glebe lands, many succumbed and seemed to give up in dispair, and allowed a gloom of inertness to settle over the Episcopal Church that was deeply regretted. Many years of trial were required to get the Church accustomed to its changed conditions.
(The statute [Va. Code § 57-3] relating to the sale of glebe lands and the use of the proceeds "for the benefit of the poor" is still on the books in Virginia, as you can read if you visit this link to download an article on Virginia's statutory scheme regarding churches from the Cumberland Law Review, authored by Virginia Professor of Law Matthew Staver and his wife Anita, a Virginia attorney. The article provides background for and tells the story of the suit by the Rev. Jerry Falwell and his church in 2002 which resulted in a declaration by a federal district court that Virginia's constitutional provision barring the incorporation of any churches -- a provision adopted in 1851, but stemming from an earlier "Bill for Establishing Religious Freedom" written by Thomas Jefferson in 1777 -- was unconstitutional. It contends that most of the other Virginia statutes limiting the ability of religious organizations to hold and dispose of property violate the First Amendment -- but it mentions § 57-9 only in passing, and does not analyze it at all.)

The parties disagree sharply on whether it is still the law of Virginia that bodies such as ECUSA and its Diocese may not be the beneficiaries of trusts in real property, and doubtless this is one of the reasons that the Virginia Supreme Court agreed to hear this case. The parties argue over the meaning and effect of Virginia Code § 57-7.1, enacted in 1993 (and subsequently amended in light of the Falwell case mentioned above), which presently reads as follows:
Every conveyance or transfer of real or personal property, whether inter vivos or by will, which is made to or for the benefit of any church, church diocese, religious congregation or religious society, whether by purchase or gift, shall be valid.

Any such conveyance or transfer that fails to state a specific purpose shall be used for the religious and benevolent purposes of the church, church diocese, religious congregation or religious society as determined appropriate by the authorities which, under its rules or usages, have charge of the administration of the temporalities thereof.

No such conveyance or transfer shall fail or be declared void for insufficient designation of the beneficiaries in any case where the church, church diocese, religious congregation or religious society has lawful trustees in existence, is capable of securing the appointment of lawful trustees upon application as prescribed in § 57-8, is incorporated, has created a corporation pursuant to § 57-16.1, or has ecclesiastical officers pursuant to the provisions of § 57-16.
This statute was described by the General Assembly as "declarative of existing law" when it was enacted in 1993. The statute which it replaced had provided in part as follows:
Every conveyance, devise, or dedication shall be valid which, since the first day of January, seventeen hundred and seventy-seven, has been made, and every conveyance shall be valid which hereafter shall be made of land for the use or benefit of any religious congregation as a place for public worship, or as a burial place, or a residence for a minister, or for the use or benefit of any church diocese, church, or religious society . . . in furtherance of the affairs of any church diocese, and the land shall be held for such uses or benefit and for such purposes, and not otherwise. And no gift, grant, or bequest hereafter made to such church diocese, church or religious congregation, or the trustees thereof, shall fail or be declared void for insufficient designation of the beneficiaries in, or the objects of, any trust annexed to such gift, grant, or bequest in any case where lawful trustees of such church diocese, church or congregation are in existence, or the church diocese, or the congregation is capable of securing the appointment of such trustees upon application as prescribed in the following section (§ 57-8); but such gift, grant, or bequest shall be valid, subject to the limitation of § 57-12 [restricting the amount of acres that may be held in any one county by a church] . . . .
One can see, by comparing the two texts, that the new statute does not make any substantive changes from the provisions of the law that it replaced. Both statutes require that for a conveyance or bequest to a "church, church diocese, religious congregation or religious society" to be valid, the religious entity either have in place individual trustees to take title to the property so given, or (after 2002) be incorporated, or have the ecclesiastical officers to hold title required by § 57-16. Yet as I mentioned, the parties disagree sharply as to whether the new § 57-7.1 abolished the old doctrine that a religious denomination or diocese could not hold beneficial title to real property -- that is, be the beneficiary of a trust holding real property.

It should be obvious to regular readers of this blog why this is such a contested issue. ECUSA's Dennis Canon purports to create a trust on all of its parishes' property, in every State, and to make ECUSA (which is a common-law unincorporated association) and the local Diocese the beneficiaries of that trust. Since everyone agrees that before the enactment of § 57-7.1 in 1993, Virginia did not recognize any such trusts in favor of national churches or dioceses, the Dennis Canon was ineffective to establish any such legally cognizable trust in Virginia when it was first (possibly) approved by General Convention on the last day of its 1979 session. So the question for the present appeal becomes: did the Dennis Canon trust (or its diocesan equivalent, embodied in its Canon 15.1) suddenly spring into existence with regard to all Episcopal parishes in Virginia with the enactment of § 57-7.1 in 1993?

The CANA parishes point out in their briefs that after the enactment of the statute, the Virginia Supreme Court decided a case which continued to uphold the former rule against larger religious entities being the beneficiaries of a religious trust -- a rule it had established and consistently followed in 13 earlier decisions. They note also that "in 1996 the Attorney General opined that § 57-7.1 'encompasses property held for the benefit of a local congregation, as opposed to property held by a larger hierarchical body.'"

The problem here is an ancient one that goes back to Tudor England, as I described in this post. Gifts to national or regional religious entities encountered the difficulty (for the courts, at any rate) of determining just who is authorized to come into court and enforce their terms. At common law, an unincorporated association (such as ECUSA, or the Diocese of Virginia) had no standing to appear in court -- they were an indeterminate agglomerate whose membership changed with the addition or departure (whether by decease, or otherwise) of every individual member. The courts did not recognize them collectively as legal persons in their own right.

Today, in many states, the law recognizes unincorporated associations as legal persons who may sue and hold title to property in their own name. But it takes a statute to countermand the common law, which does not change as easily over time. And Virginia has not enacted any such statute -- as evidenced by its requirement that individual, discrete trustees hold the legal title to real property held in trust for any church. The issue thus turns on whether the Virginia General Assembly intended to alter this state of the law with its enactment of § 57-7.1 in 1993. As just indicated, the Virginia Supreme Court, in a decision after the statute had gone into force, impliedly held that nothing had changed, and that trustees could hold title only for local church parishes -- not larger amorphous entities such as national churches or regional dioceses. So once again, the Diocese of Virginia and ECUSA face an uphill battle in convincing the Court to the contrary.

It is important to realize that the appellants are not challenging the constitutionality of § 57-7.1. They contend simply that the circuit court erred in its interpretation of its effect. This is a different tack from the one they take with respect to § 57-9, where they contend (under the second prong of their argument) that as interpreted and applied by Judge Bellows, the law violates the First Amendment.

As a trial judge, the Hon. Randy Bellows was not free to disregard a Virginia Supreme Court decision that continued to apply the law in the same way after the enactment of § 57-7.1 as it had been applied before. There can be no mistake -- he made the correct call. It will be up to the Justices of the Virginia Supreme Court to decide whether they now wish to reinterpret the effect of § 57-7.1. By comparing the language of the statute with its predecessor, however, I for one cannot discern any legislative intent to disregard, or to surmount, the previous conceptual difficulties regarding amorphous and undefined associations holding any enforceable interests in real property.

If the Supreme Court upholds its earlier interpretation of the statute, then the Dennis Canon (and its diocesan equivalent) will be as dead in Virginia as it now is in South Carolina. That is undoubtedly why there is so much riding on these appeals. If the Supreme Court decides to allow trust interests in real property on behalf of unincorporated associations, then the case will be sent back to Judge Bellows for a trial in which the Diocese and ECUSA will have to prove that they in fact have such an interest, and that it was created by a "conveyance or transfer" within the meaning of the statute. (Needless to point out, there was no "conveyance" accomplished by the Dennis Canon -- but was there a "transfer"? Most parishes, even today, would be very surprised to learn that a "transfer" had occurred.)

Thus there are two most likely outcomes: either the CANA parishes will prevail, and the appellants' arguments will be rejected in their entirety, or else the Court will accept the validity of one or more of those arguments, in which case the matter will be remanded to Judge Bellows for further proceedings "not inconsistent with" the Supreme Court's decision.

So there you have it: the arguments in the Virginia Supreme Court will take place on Tuesday, April 13. Since I cannot attend, I hope that some readers in Virginia will do so, and report their comments and impressions for everyone's benefit here. The arguments in the Fort Worth case will occur two weeks later -- and then it will be anyone's guess as to which court issues its decision first.


  1. Since when does a fine law school like Virginia allow its law review to publish a Note critiquing a statute that was written by a former associate of a law firm retained by an active litigant to make the same argument, and not identify that fact? The Note identifies that the student was working for Troutman but not Troutman's connection to the litigation.

  2. Steven, I was surprised to see it as well. I suspect the Virginia Law Review was happy to have an article on a fairly unique and interesting matter pertaining to a Virginia-specific law and currently pending before the Commonwealth's highest court.

    Her author note includes Troutman Sanders merely by way of thanks. I think it would have been more transparent if her note had read instead:

    *J.D. Expected 2010, University of Virginia School of Law. The author was a summer associate and research assistant at Troutman Sanders LLP, which represents the Diocese of Virginia in the litigation that is the subject of this comment.