Thursday, August 1, 2013

Court Socks LA Presbytery with $400K in Sanctions

In an order made public by The Layman online earlier today, the Hon. Kay Bates, Judge of the 19th Judicial District Court in Baton Rouge, Louisiana imposed compensatory sanctions of $390,000 against the Presbytery of South Louisiana ("PSL") for conduct by its agents and attorneys, as well as by personnel and attorneys from PCUSA headquarters, in the litigation between PSL and the Carrollton Presbyterian Church of Carrollton (a district of New Orleans) -- a unit of PCUSA which has only about 20 members -- over the ownership rights to Carrollton's property.

The order is remarkable not only for the amount of sanctions awarded, but for the public dressing down which Judge Bates gives to various PCUSA counsel for their egregious litigation tactics, which included:

(a) Willfully flouting the Court's Temporary Restraining Order, issued shortly after the litigation began, which (among other things) forbade PSL from attempting to dissolve Carrollton;

(b) Claiming that the officials of PSL who voted to dissolve Carrollton -- twelve days after the issuance of the TRO -- were "unaware" of the Court's TRO;

(c) Nevertheless arguing to Court afterwards that the dissolution of the church had deprived the court of its subject-matter jurisdiction, because there was no longer any plaintiff due to PSL's "ecclesiastical act" in dissolving Carrollton;

(d) Proceeding to press its claims for Carrollton's property under the trust clause (akin to ECUSA's Dennis Canon) in PCUSA's Book of Order, even though Carrollton had properly and timely exercised its option to be exempt from that clause;

(e) Continuing with the lawsuit, even after PCUSA's leading in-house lawyer opined that PSL would lose, and after PSL's own corporate representative testified in deposition that PSL had no legally cognizable claim to Carrollton's property, in order to run up Carrollton's legal costs though extensive depositions and discovery, with the intent and expectation that the small church would have to fold;

(f) Removing the lawsuit to federal district court, and then expressing the views that the magistrate judge who recommended that the suit be remanded to State court exemplified man's "total depravity", that the federal court itself was "compromised", and that it was overseen by a district judge who was lazy, and let matters be decided by the "skin color" of the attorneys who appeared before him;

(g) Making outlandish and unsupportable legal arguments about the powers of PCUSA as a "hierarchical church", with the ability (following the U.S. Supreme Court's 1979 decision in Jones v. Wolf) to impose trusts unilaterally on church property under Louisiana law;

(h) Expending over $500,000 in the first year of litigation for a property that was appraised at $1 million, without counting how much it spent in 2010 and 2011 (which PCUSA has not yet divulged);

(i) Continually misrepresenting facts and law to the Court, even after being corrected and admonished; and

(j) Belittling and trivializing the above serious conduct in the course of the sanctions proceedings.

In other words, PSL's attorneys and agents joined in a conspiracy of extreme bad faith and disrespect for the judicial system, coupled with an abuse of its procedures in an attempt to render their opponent penniless. (And it is not as though Carrollton was trying to leave PCUSA. It wanted to lift the burden of its property from its small congregation by selling it to a neighboring Catholic school, and then leasing it back just for Sunday and occasional services—see the story linked above for details.)

Sound familiar, anyone? 815, are you listening?

The court learned of all this conduct when it ordered PSL's counsel to produce all in-house emails, including those between counsel, after determining that they did not qualify for the attorney-client or work-product privilege because they had been shared with so many who were not parties to the case. Judge Bates wrote: "The court is not speculating. The participants to this scheme astonishingly acknowledged all of this in their own words."

The opinion is remarkable also for its straightforward and clear-headed analysis of the traditional principles of trust law, by which the settlor of a trust (the person who owns the property being put into a trust) must consent in writing to its creation. It clearly and carefully distinguishes the judicial abnormalities (due to particular and individual state statutes) in New York and California (links to the cases at this page), and cites the All Saints Waccamaw case as an instance of correct application of "neutral principles of law" to resolve these church property disputes based on unilaterally declared denominational trusts.

It is especially welcome and refreshing to see language from a trial judge like this (p. 11):
Almost thirty years ago a unanimous Louisiana Supreme Court held that the use of the neutral principles of law method was constitutionally mandated in Louisiana. Fluker v. Hitchens, 419 So.2d 445, 447 (La. 1982).  
For present sanctions purposes it is significant that Fluker held that failure by a civil court to exercise subject matter jurisdiction to resolve a church property dispute "simply because the litigants are religious organizations, may deny a local church recourse to an impartial body to resolve a just claim, thereby violating its members' rights under the free exercise provision, and also constitute a judicial establishment of the hierarchy's religion". Fluker at 447 (emphasis added). That, however, is what the PSL has asked this court to do. It has asked this court to ignore a fundamental constitutional guarantee and a unanimous Louisiana Supreme Court mandate -- by effectively disregarding the deeds, articles of incorporation, and state property and trust law and instead "interpret" Wolf to authorize the imposition of an enforceable trust merely on the basis of the PCUSA's addition of a purported express trust clause in the early 1980's to its denominational constitution. The PSL urged this court to enforce the asserted trust against Carrollton Presbyterian Church's civil corporation, the owner of the property, solely on this basis even though Carrollton has existed since 1855, has been incorporated since 1894, and acquired or built all of its real property using its own funds prior to the addition of this purported trust clause. 
And more, like this (p. 27):
The PSL's jurisdictional argument, that the case before this court is ecclesiastical and, therefore, the First Amendment guarantee of religious freedom places this case beyond civil court authority, was expressly rejected by the U.S. Supreme Court in Jones v. Wolf, 443 U.S. 595 (1979). That case involved a member church of the PCUS (the PCUSA's legal predecessor). The denomination argued then, as the PSL did now, that its property-related internal processes were "ecclesiastical" in nature and therefore could not be interfered with by civil courts without violating the denomination's free exercise rights. A majority of the U.S. Supreme Court forcefully rejected this argument, explaining:
The dissent also argues that a rule of compulsory deference is necessary in order to protect the free exercise rights "of those who have formed the association and submitted themselves to its authority". 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."
Jones v. Wolf at 605, 606. The words of the U.S. Supreme Court are unequivocal. "Nothing could be further from the truth." What was true then remains so.
Then there is this passage, which has ramifications for ECUSA's Potemkin dioceses, who hide behind ECUSA's ecclesiastical apron to claim they are the same entities under State law as the ones who voted to leave (p. 31):
As the PSL is aware from the pleadings, the plaintiff in this case is a civil corporation formed under the laws of the State of Louisiana. The plaintiffs corporate articles grant exclusive authority to the corporate Trustees to "hold title to and control the properties of the corporation ... ". The PSL was also aware from the outset that this corporation is the title holder of record. It is axiomatic that the dissolution of this corporation is not governed by the PCUSA Book of Order but by the laws of the State of Louisiana, in particular, La. R.S. 12:249, et seq. The PSL at all times knew that Carrollton did not want to be dissolved and had not acted to become dissolved. Nor could the PSL usurp the authority of the state to dissolve a civil corporation that was created in the first place pursuant to the laws of the State of Louisiana. It is well-established that ceding such civil power to ecclesiastical authorities would constitute an unconstitutional state establishment. Accordingly, when a presbytery acts under G-8.110301i of the PCUSA Book of Order "to divide, dismiss, or dissolve churches in consultation with their members", all the presbytery can do is either divide one PCUSA church into two PCUSA churches, dismiss a PCUSA church to membership in another Presbyterian denomination, or dissolve a church as a member church of the PCUSA. The local church still exists. It's just not a PCUSA church any longer.
And this observation should put the last nail into the "hierarchical"coffin (p. 33):
Interwoven throughout almost every pleading and memoranda the PSL has filed or submitted to this court the PSL emphasized the form of ecclesiastical government (polity) said to characterize the PCUS and PCUSA. The PSL argued that because trust clauses are contained in the 1982/1983 edition of the PCUS Book of Church Order (§ 6-3) and the PCUSA Book of Order (G-8.0201) Carrollton was therefore necessarily bound by them due to the PCUSA's allegedly hierarchical polity. The PSL wrote, "Critically, the PCUSA is a connectional church that is hierarchical in nature, rather than congregational ... " What the PSL has said is "critical", though, the U.S. Supreme Court has said is irrelevant. Comparing the neutral principles of law approach with the deference approach, the U.S. Supreme Court said, "The neutral-principles approach, in contrast, obviates entirely the need for an analysis or examination of ecclesiastical polity ... " Wolf at 605. The majority in Wolf said that, "[T]he suggested rule (by the minority, of compulsory deference) would appear to require a "searching and therefore impermissible inquiry into church polity"." Wolf at 605, citing Serbian Orthodox Diocese, 426 U.S. at 723. What Wolf said about polity, juxtaposed against what the PSL said about polity, cannot be reconciled.
The court engages in such a searching and complete analysis of the law in this sphere -- not because it needed to decide about the property (its decision in favor of Carrollton in 2010 was upheld in 2011 by the Louisiana Court of Appeals, and further review was denied by both the Louisiana and United States Supreme Courts), but because it needed to do so before imposing sanctions against attorneys for their improper arguments. That is not something attorneys (or lay people) see every day.

The law in Louisiana is now as clear as it is in South Carolina: unilateral denominational trusts will be given no force or effect on their own, and demonstrating the intent of the parish to allow a trust on its property is paramount.

The courts of Louisiana and South Carolina have, in essence, told the litigators of PCUSA (and by  inference, of ECUSA as well): "Weaving spiders, come not here ... Your arguments will be weighed and found wanting."


  1. I have just checked three different calendars including the Orthodox Julian. On none of them is it April 1st. Holy cow!

  2. "Willfully flaunting the Court's Temporary Restraining Order ..."

    I think you mean "flouting" rather than "flaunting."

    Is the United Methodist Church, legally speaking, a "hierarchical" church?

  3. One correction: Carrollton Presbyterian Church is located in New Orleans on S. Carrollton Ave. It was the home church for my scout troop back in the day.

  4. I thank my ever-careful readers for keeping this blog both literate and accurate. The appropriate corrections have been made to the text.

  5. This news causes me to recollect the first phrase from the first line of the theme song from a 1966-67 American fantasy/science-fiction comedy TV series. To wit, "It's about time…"

    I think one may hope that the actions of this one judge might awaken some of her judicial brethren to the proper application of existing U.S. law to inaccurately self-described "hierarchical churches," only one of which is ECUSA.

    Even if it fails to do so, however, it at least restores some degree of faith in the qualifications of some in this nation who are entrusted with applying the law to specific causes, which, even when taken alone, gives some reason for hope.

    Pax et bonum,
    Keith Töpfer