Wednesday, July 16, 2014

Huge Setback for ECUSA at South Carolina Trial -- Their Expert Concedes the Case

Yesterday, July 15, was the seventh day of the ongoing trial involving Bishop Lawrence's Episcopal Diocese of South Carolina and thirty-four of its parishes, as plaintiffs, seeking to quiet the title to their real and personal property against the claims made by ECUSA and its rump group, the "Episcopal Church in South Carolina" ("ECSC"). The defendants say that the Diocese and its parishes all forfeited their property when the Diocese voted to amend its governing documents so as to make it no longer a constituent member of ECUSA.

According to the official line promulgated by ECUSA, "people may leave, but dioceses may not." ECUSA claims to be made up of 110 dioceses (actually, now 109 following the merger of Quincy into the Diocese of Chicago), but four of them are not true dioceses -- they are the rump groups set up by 815 to act as plaintiffs (or, in some cases, when they cannot organize fast enough, as defendants and counterclaimants) in the lawsuits brought to recover the bank accounts and real properties that belonged to the dioceses and their member parishes that voted to withdraw. Those rump groups, although each newly organized, have never formally been admitted as proper "dioceses" into union with General Convention, as required by ECUSA's own Constitution.

And one sees right away why: if ECUSA were to go through the formalities necessary to admit them as new dioceses, it would give away its argument that "dioceses cannot leave." Instead it has the rump groups pretend to be the ongoing original dioceses, and then has General Convention recognize them as such and seat their deputies.

Thus far, only two trial courts -- one in Pittsburgh, and the other in Fresno, California -- have been taken in by this ruse. Judges in Texas and in Illinois, meanwhile, have not. (A ruling is expected any day now from the Illinois Court of Appeals which will affirm a lower court's judgment that the [now Anglican] Diocese of Quincy properly amended its own governing documents so as to remove itself from ECUSA.)

And now ECUSA may have shot itself in the foot in South Carolina, as well. Let's have the Press Office of the Episcopal Diocese tell us what happened on Day 7 of the trial, with ECUSA and ECSC putting on their portion of the case (I have added some explanatory notes, taken from my daily postings on the trial over at StandFirm):

TEC Witness Admits Diocesan Constitution, Canons Trump Those of the National Church

ST. GEORGE, SC, JULY 16, 2014 –An expert witness for The Episcopal Church (TEC) undermined claims by the denomination that its rules supersede those of local dioceses in the Diocese of SC, during day-long testimony in the trial to protect local diocesan and church property from seizure by TEC and its local subsidiary, The Episcopal Church in South Carolina (TECSC). 
Martin McWilliams, a law professor at the University of South Carolina, was called by TEC and TECSC to testify as an expert witness. 
McWilliams spent considerable time explaining his credentials as a corporate governance expert and said that because the Episcopal Diocese of South Carolina incorporated the constitutions and canons of the national church in its own corporate charter, it is governed by those constitutions and canons. [Ed. Note: I am unaware of any language in the Diocese of South Carolina's Constitution and Canons that ever purported to incorporate the national Constitution and Canons, as opposed to merely acceding (agreeing) to them. Perhaps that is all the witness intended to say: by acceding to the national Constitution and Canons, the Diocese agreed to go along with, and be subject to, them. But accession, as I noted earlier, involves consent, and consent is at the will of the one consenting: it may be withdrawn at any time, unless the consent is expressly stated to be "perpetual", "forever binding", or words to that effect. (The Articles of Confederation, for example, described the Union so formed as "perpetual" -- and that was one of the reasons why the Supreme Court held, following the Civil War, that States could not unilaterally withdraw from the United States.) Here, the accession by South Carolina was never made "binding", "perpetual", or anything similar -- it was simply an accession for as long as the Diocese should continue to consent to what ECUSA did.] 
However, on cross examination by the diocese’s attorneys, Alan Runyan and Henrietta Golding, he acknowledged that the diocese – while it may incorporate the national rules – is, in fact, governed by its own documents. 
He further acknowledged there is no rule in either the national canons and constitutions, nor in the diocese’s own constitutions and canons that prohibits the diocese from amending its corporate documents. [My emphasis -- Ed.]
He also said that the diocese was within its legal rights to amend its articles of incorporation. [Ed. Note: Well, that pretty much concedes the whole case. Under the ruling in the All Saints Waccamaw case, which is binding on Judge Goodstein, if the Diocese followed its own Constitution and procedures in amending its documents so as to make it no longer capable of being part of ECUSA, then the national Church has nothing to say about those amendments: it reserved in its own Constitution no power to restrict the ability of a diocese to amend its governing documents, and had no language requiring a "perpetual" union.] 
McWilliams was the only witness called.
And no wonder -- his testimony on cross-examination must have thrown the ECUSA attorneys into consternation. (There is no mention of any attempt to rehabilitate the witness by a re-direct examination.) The shock and surprise may also be seen by the fact that as of the time I am posting this (which is around 2:30 a.m. Eastern Daylight Time on July 17), no account of the day's proceedings has yet appeared on the ECSC website.

* * * *

[UPDATE 07/17/2014: The ECSC has now put up its account of Prof. McWilliams' testimony, and given the earlier one provided by the DSC as quoted above, it is a doozy. Notice how it completely omits any and all reference to the testimony on cross-examination which was so devastating to the Defendants' case:
Wednesday, July 16 (Day 7)

The law professor who helped to write South Carolina’s nonprofit corporation law told the court that changes to the governing documents of the Diocese of South Carolina that purported to remove the diocese from The Episcopal Church were beyond the legal powers of Mark Lawrence and other diocesan officials, and were not valid. [Ed. Note: Apparently he did so testify on direct, given the six-page summary of his opinions which the ECSC has referenced on its Website. However, this account of his direct testimony has to be qualified by the concessions he made on cross-examination. If, as the DSC reports, he admitted that the DSC "was within its legal rights to amend its articles of incorporation," then he contradicted his opinion of invalidity.]

Martin C. McWilliams Jr., Professor of Law at the University of South Carolina since 1983, testified on Wednesday as an expert witness for The Episcopal Church in South Carolina. He was Co-Reporter of the South Carolina Nonprofit Corporation Act of 1994 and co-author of the South Carolina Reporters’ comments to the act. [Ed. Note: Now we see why the ECSC called him as an expert witness.]

Prof. McWilliams had reviewed and analyzed the documents pertaining to the original 1973 corporate charter of “The Protestant Episcopal Church in the Diocese of South Carolina” as a nonprofit corporation. He also reviewed later documents that purported to withdraw the diocese from The Episcopal Church. His opinions are summarized in a six-page Expert Report submitted to the court.

On Wednesday, Prof. McWilliams’ testified that:

• The 1973 corporate charter is the “initial, seminal, fundamental, founding document” of the nonprofit corporation that is the diocese.

• The stated purpose of the corporation in the charter is “to continue the operation of an Episcopal Diocese under the Constitution and Canons of the Protestant Episcopal Church in the United States of America.” [Ed. Note: The stated purpose was as quoted, until the Charter was amended in 2012 -- see below.]

• By becoming a nonprofit corporation, the diocese came under the regulatory control of the Nonprofit Corporation Act, and at the same time incorporated by reference the Constitution and Canons of the national church.

• Under the Nonprofit Corporation Act, when state regulations come into conflict with the Constitution and Canons of the church [Ed. Note: this should read "of the church or of the diocese" -- see Prof. McWilliams' report, p. 2], the church laws trump. In the case of the diocese, that means that the Constitution and Canons effectively become neutral principles of corporate law.

• The language of the charter identifies “all” directors, managers, officers and trustees. The persons named were three individuals and their titles: “Bishop” (the Rt. Rev. Gray Temple) and two others identified as “Secretary” and “Treasurer.” By default, the “Bishop” is the designated director.

• No other directors are named in the charter. The designation goes with being a bishop, and passed from bishop to bishop. “It goes down to Bishop Lawrence, and I would argue, Bishop vonRosenberg, in an unbroken line of designated directors,” the professor said. [Ed. Note: This made the diocesan corporation the equivalent of what California and other states recognize as a "corporation sole" -- a special form of religious corporation in which the Bishop is the sole officer and director, and the incumbency passes from each bishop to his successor.]

• The charter can place limitations on the powers of the directors, and the Constitution and Canons became such a limit on the powers of the Bishop to amend the charter. “Any attempt by the Bishop to amend this charter in a way that’s inconsistent with the Constitution and Canons would be outside his powers,” he said. [Ed. Note: This opinion was a stretch when it was offered on direct. It succumbed completely to Prof. McWilliams' admissions on cross-examination -- but you won't read about that moment in this account from the ECSC.]

“The Bishop is, after all, the creature of the national church,” Prof. McWilliams said. “You can’t be a bishop unless the national church makes you a bishop.” He pointed out that although Mark Lawrence was elected at two different diocesan conventions, South Carolina was not permitted to consecrate him as its bishop until he met the requirements of the national church, such as receiving consents from other dioceses and bishops of The Episcopal Church. [Ed. Note: The Professor is a bit out of his league here -- or shall we say (using one of my favorite words), ultracrepidarian. If the bishop must first of all be elected by a diocese, how does that make him exclusively "the creature of the national church"? The truth is that a bishop is "created" for two purposes: (1) to be the chief priest and pastor for his diocese; and (2) to be his diocese's ecclesiastical representative to the rest of the denomination, and to the outer religious world. The first function recognizes his election by his own diocese; the second is given meaning by his endorsement by the whole church of which he is a part.]

Professor McWilliams also reviewed purported amendments to the corporate charter in 2010, signed by Mark Lawrence. “In this case, he has not signed as Bishop, he has signed as President. And it doesn’t say president of what.” New bylaws that were adopted in 2010 also were done without legal authority, and were inconsistent with church law. [Ed. Note: "President" is the title given to the presiding officer of both secular and religious corporations, as Prof. McWilliams well knows. If the document is an amendment to the corporate charter, it had jolly well be signed by the person who is the head of that organization, whether he signs as "president" or as "bishop." As for the amendments supposedly being "inconsistent with church law," see my earlier remarks. The Professor undercut that opinion with his admissions on cross.]

Attorneys for the breakaway group known in court as “the Plaintiff Diocese” interrupted with numerous objections throughout the day, aimed at keeping the professor’s findings from being presented. Many objections were overruled, however, and Prof. McWilliams testified on direct examination until about 3:05 p.m.

As cross-examination began, plaintiff’s attorney Henrietta Golding stood up and immediately began shouting at the professor seated in the witness chair, jabbing her finger in the air: “I think you need to tell the court where you go to church! …Or is this something you want to hide?” Counsel for the defense objected; Judge Goodstein did not intervene. “I don’t think she’s being impolite,” the judge said.

Prof. McWilliams attends St. Martin in the Fields Episcopal Church in Columbia. He later testified that he had wanted to state that fact at the beginning, but the question was inadvertently omitted during his initial testimony. Without the question being asked, he could not offer the information. [Ed. Note: This goes to the witness' bias. An expert is not supposed to have a bias, but nearly all of them do, because nearly all of them are being paid to give their opinions. By being a member of a parish in a diocese that has chosen to stay with ECUSA rather than follow Bishop Lawrence and his Diocese, the Professor would naturally have tended to form the opinions he did.]

At the conclusion of his testimony, court adjourned and will reconvene at 9:30 a.m. Thursday. Judge Goodstein indicated that the trial will need to extend into the week of July 21, as the defense has several more witnesses to present.
Remarkable, is it not? One needs to put the two accounts together to get the whole picture. As I say, it would appear that the good Professor's honesty forced him to admit that his opinions expressed on direct (and in his report) were not as strong as they may have seemed, and were subject to qualification. Nevertheless, the proper assessment of what actually happened will have to await my receiving a copy of the transcript of his full testimony. Then I shall probably have more to say. But for now, I have to conclude that the Professor conceded away on cross-examination the value of whatever he testified to on direct examination. And indeed, he may have conceded away ECUSA's whole case. Watch for ECUSA to call its in-house, million-dollar-expert Dr. Robert Bruce Mullin to try to save the day (hint: he won't, and can't).]

Does this mean that ECUSA's own million-dollar house expert, Prof. Robert Mullin, will be called in to try to rescue the case? He does not have the legal qualifications that Prof. McWilliams has -- but that does not deter him from offering his opinion that dioceses are bound permanently to the national Church, and may not leave on their own. However, he offers that view as an historian of the Church, and readily concedes that there is no language in the Constitution or Canons which says that a diocese may not withdraw once it has joined. It is all a matter of "interpretation", you see.

Nevertheless, any such opinion, even if Dr. Mullin is flown in to offer it, cannot stand beside that of a corporate law expert like Prof. McWilliams. The latter's is based on a neutral analysis of all of the governing documents -- exactly as the South Carolina courts are required to analyze them under the holding in All Saints Waccamaw.

So Day 7 could prove to have been the decisive day of this trial. Stay tuned for more as the trial progresses.


  1. I received at 5:50 am this morning (Pacific Daylight Time; note that the commenter is on EDT) the following comment from a reader, before I updated this post as noted above:

    TECSC still hadn't posted at 5:30 this morning but had an account out by 7:30. Might have described an alternate universe. Personally, I'd have loved to watch the demure - soft-spoken to the point of being occasionally difficult to follow in examination of witnesses - Ms. Golding "shouting at the professor ... jabbing her finger in the air." But St. George and home again is a considerable trek and the majority of the trial to date has understandably been rather cut and dried, if thankfully salvaged by Judge Goodstein's occasional interjection of grand humor.

    Beau Booker
    St. James Church

    1. Having now read Diocese IN SC's account of day 13, I have to conclude there really ARE multiple universes...what with the judge losing her temper, leaving the courtroom. Slamming doors etc.

  2. I would think the lawyers for TEC should have anticipated what the witness might be asked on cross, and what his answers would be!

  3. Of all and many points, the one about a Bishop of a Diocese being an executive manager sent out from the main office to oversee the company's interest in that geographical district just flabbered my gasted. Everyone reading here knows from his/her inner gut, soul, heart, and brain that the entire meaning of the Episcopal Church, as define, is based upon bishoporic (diocesan) imperatives. As we are a Holy, Catholic, and Apostolic Church (or were), what set us apart from the Romans was the fact that the Archbishop of Canterbury was/is a presider and not a ruler. There was/is always the supposition of a substantial sovereignty that each Diocese has in the scheme of things.
    Further, bishops are not recruited out of the Help Wanted - Executive Managerial Positions section of the classifieds in the Wall Street Journal or the New York Times. Bishops are called, and they are consecrated by the hocus pocus and laying on of hands by three other Bishops....not by the presiding bishop of this or that denomination.

    Sheesh!!! Oi vey! Hello, Muddah. Hello Faddah, here I am, at Camp Granada!!!!

    El Gringo Viejo

  4. Seems to me that keyboards are already clicking somewhere typing up revisions to the constitution so as to make it harder for a diocese to disassociate from TEc.

    1. Is that the clickety clatter that keeps waking me up in the middle of the night?

  5. Please correct my misunderstanding. I thought this case was specifically about the ownership of the name "Diocese of South Carolina", not about property ownership. In that case, even if ECUSA wins this case, wouldn't they have a long way to go for an overall win in South Carolina?

  6. Paul Brannan, this case started out as a simple complaint by the EDSC to enjoin ECUSA and ECSC from infringing on their trademarks. But then the defendants counterclaimed for all of the diocesan real and personal property, and soon made it clear that they would go after all the individual parishes and their property, too. At that point, almost all of the parishes jumped in, and the lawsuit became a full-blown contest over titles to property; the trademark issues are just the tail of the dog.