Important Developments in South Carolina

Tomorrow morning, September 23, beginning at 10:30 a.m. Eastern Time, the Supreme Court of South Carolina will hear oral arguments in the appeal, taken by Bishop vonRosenberg, ECUSA and its rump group that calls itself "the Episcopal Church in South Carolina", from the adverse decision last February by Circuit Judge Diane S. Goodstein. Her opinion, which followed a three-week-long trial in July of last year, declared that Bishop Mark Lawrence, his Episcopal Diocese of South Carolina and 36 of its parishes were the sole owners of their respective properties, including the trade name, seal and marks of the historic Diocese, which was one of the original founders of ECUSA (then "PECUSA") itself.

Heading up the panel hearing the case will be Chief Justice Jean Hoefer Toal, who in that same position authored the Court's unanimous 2009 opinion in the case of All Saints Waccamaw v. Episcopal Church, which I quoted and analyzed in this earlier post. Also serving on the panel will be Associate Justice Donald W. Beatty, who joined in the Waccamaw opinion. It is not known yet whether any of the other sitting Justices have recused themselves (two of them did so in the Waccamaw case); the fifth, Justice Kaye Hearn, assumed her seat on the Court after the arguments in the 2009 case.

Chief Justice Toal, whose religion is Roman Catholic, is no stranger to the concept of what makes a church "hierarchical." In her opinion in the Waccamaw case, Justice Toal noted that South Carolina Courts are required to resolve church property disputes using "neutral principles of law" whenever possible. They may defer only to "the highest religious judicatories" when they have properly decided an issue "as to religious law, principle, doctrine, discipline, custom, and administration." It should be noted that in her written opinion filed last January, Circuit Judge Diane Goodstein expressly found that there were no such bodies in the Episcopal Church (USA) that had outside jurisdiction over either the Diocese or any of its parishes.

Another point decided by the Waccamaw court is that ECUSA's Dennis Canon did not, in and of itself, create an enforceable religious trust on parish property under South Carolina law. Bishop vonRosenberg's lawyers tried to distinguish that holding before Judge Goodstein, but they did not succeed, and there is no reason to expect that their attempt to do so before the Supreme Court tomorrow will fare any better.

In a related federal case, returned to the federal District Court to reconsider its prior order of dismissal, District Judge C. Weston Houck entered an order yesterday staying all further proceedings in his court pending the issuance of a decision by the Supreme Court of South Carolina. Although the federal case ostensibly presents issues of federal trademark law under the Lanham Act, Judge Houck noted that "South Carolina law provides the rule of decision on the underlying issues" of who rightfully is in control of the Episcopal Diocese of South Carolina, which is a religious entity organized and incorporated under South Carolina law.

Accordingly, it is expected that if the South Carolina Supreme Court issues a ruling affirming Judge Goodstein's decision, Bishop Lawrence will be successful in having the federal court dismiss the trademark claims -- just as Bishop Iker was able to do when a parish there tried the same federal strategy that Bishop vonRosenberg has pursued.