Tuesday, March 31, 2015

As Predicted: Federal Appeals Court Returns Trademark Action to SC District Court

In a published decision earlier today, the United States Court of Appeals for the Fourth Circuit reversed an earlier decision of Senior District Judge C. Weston Houck to abstain from exercising  jurisdiction over a case alleging infringement of trademarks under the Lanham Act. The case had been filed by Provisional Bishop Charles vonRosenberg of the Episcopal Church in South Carolina against Bishop Mark Lawrence of the Episcopal Diocese of South Carolina. The validity of its allegations turns upon the question of whether a diocese is free to disaffiliate from the Episcopal Church (USA).

ECUSA has now lost the argument over whether one of its dioceses may withdraw of its own volition from union with General Convention, without asking the latter body for permission. The courts of Illinois have issued a ruling contrary to ECUSA's position, and that decision is now final, or what attorneys call res judicata ["the matter has been adjudged"]. The term means that the Illinois decision is no longer subject to being changed or altered in any way.

The Illinois courts were diligent and extremely thorough in examining ECUSA's constitution and canons in minute detail. Not only could they find no restrictions upon dioceses' powers to amend their own governing documents so as to remove or change their affiliation with the Episcopal Church (USA), but they also could find no adjudicatory body of any kind within ECUSA that had been given the authority over dioceses, to tell them what they could and could not do.

(General Convention is only a legislative, not a judiciary, body -- it cannot decide a dispute with a diocese, or order a diocese to do anything, and has no means within the Church itself of enforcing its canons against a diocese. Inside the Church, and as regards a member diocese, the canons have mostly moral, rather than legal, force. And that is why ECUSA uniformly has been forced to seek relief against withdrawing dioceses in the secular courts.) 

The legal doctrine of res judicata will now prevent ECUSA's attorneys from continuing to argue to State and federal courts that its dioceses may not leave without permission. That is why the reversal today of Judge Houck's earlier decision will probably have little consequence over the long run. As I wrote in this earlier post:
[W]hat about the case argued last week before the federal Fourth Circuit Court of Appeals, in Richmond? Could that case still go forward?

I listened to the recording of the oral arguments in that case (mp3 file available for download using this link). Based on the questions asked of both sides, I think the Court of Appeals will most likely return the case to Senior District Judge Houck and direct him to use a different technical standard in deciding whether or not to abstain from exercising jurisdiction over the case (which was brought by Bishop vonRosenberg to address charges of federal trademark infringement by Bishop Lawrence and his Diocese).

Judge Houck will have the benefit (which the Court of Appeals may not) of reading Judge Goodstein's well-written opinion -- which decides the trademark issues under State law. Moreover, the injunction against Bishop vonRosenberg claiming to be the "Bishop of the Diocese of South Carolina" is now made final against him, and he cannot disobey it while the case is on appeal without getting the injunction first stayed (see Rule 62 [c], which you may read here). So he can no longer argue to the federal courts that he has the rights to that title unless he can get a South Carolina Appeals Court justice to stay the injunction, and I personally doubt he will be able to do so.

If this analysis correct, the federal case is dead unless and until ECUSA and ECSC manage to get a court to reverse Judge Goodstein's decision. And this Curmudgeon, at this point, just does not see how that could ever happen.
So there are now two very good reasons why ECUSA and its rump group should have no cause to celebrate their opportunity to go before Judge Houck once more with their claims of "infringement." The first is that the injunction against Bishop vonRosenberg remains in effect pending their appeal (which they have asked the South Carolina Supreme Court to hear directly, thus bypassing the Court of Appeals if the Supreme Court grants their request). If he is prevented from claiming to be the Episcopal Bishop of the Diocese of South Carolina, how can he say he owns the trademarks which have been adjudicated to belong to Bishop Lawrence and his Diocese?

Second, if the Episcopal Diocese of South Carolina had the right to withdraw from ECUSA, as now finally adjudged in the Illinois courts, then it has the right to keep its marks and trade names -- and ECUSA (and by extension ECSC, since the latter claims to be one of ECUSA's dioceses) are both now barred from arguing to the contrary.

Judge Houck thought he was doing Bishop vonRosenberg a favor by declining to accept jurisdiction of his suit. Now that he is required to revisit that decision, however, he might just proceed (in due course, after appropriate motions and briefing) to the merits, and add his own adverse decision to the ones in the State courts of Illinois, Texas and South Carolina. ECUSA has asked for a decision, and now it will get one (but not for several more months).

Thursday, March 26, 2015

The Church's Finances: Not as Rosy as Claimed

The Executive Council of the Episcopal Church (USA) has commended the staff at Church headquarters (815 Second Avenue in New York) for producing an operating "surplus" of some $2.4 million for calendar 2014.  A resolution adopted at the Council's latest meeting last week took note of the “consistent, visionary leadership” of Chief Operating Officer Bishop Stacy F. Sauls and Treasurer and Chief Financial Officer N. Kurt Barnes.

The commendation would appear to be premature. The "surplus" claimed exists only if one ignores the full operating statements of the Church, which include in particular the numbers for its Episcopal Migration Ministries ("EMM") -- the arm of the Domestic and Foreign Missionary Society (the incorporated part of the Church handling all money and finances) which provides government-subsidized services to international refugees admitted for resettlement in the United States.

Working through 30 partner organizations in some 22 states, EMM helps the United States government relocate approximately 5,000 new refugees in the United States each year. In exchange for its services provided to the new immigrants -- helping them blend in and become productive members of American society -- the government reimburses EMM for what it spends on relocation services. The reimbursement includes staff and overhead costs, as well as all out-of-pocket expenditures.

Because EMM income is unrelated to regular income of the Church, it is reported in its own section at the end of the monthly operating statements, after the accounting for the usual Church revenues and expenses. And for budgeting purposes, the Church projects EMM reimbursements to be equal to EMM expenditures -- so the numbers should be a wash.

But they are not -- this is the government, remember? Its reimbursements can lag greatly behind expenditures, so that the Church is actually in the position of having to front money for EMM operations which it expects (eventually) to receive back. It's almost like having to invest "working capital" into a business before it can become profitable.

With this background, anyone can now evaluate the strength of 815's "surplus" claim by examining its preliminary 2014 year-end profit-and-loss statement here. According to that statement:

(A) Total ordinary income for the year (line 15) was $ 40,685,373;

(B) Total ordinary expenses for the year (3d page) were $ 38,278,771; producing a nominal

(C) "Budgetary surplus" for the year (A - B) of $ 2,396,602.

But now add in the EMM figures (bottom of the third page):

(D) 2014 EMM reimbursements received were $ 13,322,419; while

(E) 2014 EMM expenditures amounted to $ 16,811,183; for a net

(F) Annual EMM operating deficit of $ 3,488,763, which more than wipes out (C) above, and leaves

(G) A net operating loss for 2014 of $ 1,092,161 !!

In other words, the Episcopal Church is in the hole to the tune of over a million dollars for calendar 2014.

Notice how the budgeted 2014 numbers for EMM were to equal each other: $15,931,732 of reimbursements was supposed to equal $15,931,732 of expenses. That, however, is not how things actually worked out. 

The Church spent the money for EMM in 2014; any money spent in excess of actual reimbursements had to come from the Church's other pockets. And by the time the government reimburses the EMM deficit of $3,488,763 later this year, the Church will already be spending money on EMM in 2015. It will most likely never catch up -- because, as I say, of the long time it takes the government to process claims for reimbursement.

Because of that reality, it looks as though the Church, in order to avoid having to draw down its trust funds excessively to finance EMM operations, pretty much has to find the necessary funds from elsewhere in its operations. So had it not been able in 2014 to increase its rental incomes, and save money on refinancing its loans and in other ways, the operating loss would have been far higher.

And that is my point in this first post on the Church's Finances -- there is no "surplus" for which the Episcopal Church may pat itself on the back. But there is still a lot more to say about EMM, and the Church's 2014 figures, as well. They will be the subject of my next posts in this series looking at the Church's Finances leading up to General Convention 2015.

Tuesday, March 24, 2015

Tyranny in Vestments

The time has come, the Walrus said, to talk of many things:
Of shoes, and ships, and sealing -wax; of cabbages, and kings.
Yes, indeed -- "of cabbages and kings." The thing you need to know about the former is to "[p]lant [the] recommended variety", and that, as with churches and many other things under the sun,  "[e]xcess water taken up ... causes head to burst." 

As for the latter, let us speak of kings in black robes, and of ministers in bright vestments. We are ruled by five of the former, and from time to time there are more of them -- up to nine, in all. They wield a prodigious power over our society, in both manners and morals. The power they have is a tyrannical one, because once exercised, it cannot easily be thwarted or reversed. And yet, in this democracy of ours, they are not elected, and once in their robes, they serve for life.

This coming April 28, for instance, the nine will take up the knotty question of just what a "marriage" is. Now, it is not as though this will be the first time they have done so. Consider this recitation by the U.S. Supreme Court, from rather long ago, in a case in which an inheritance depended on whether the claimants' mother had been legally married:
The residue of the instructions contained in this exception all involve the question as to what constituted marriage, at the time of this cohabitation, by the laws of Georgia and South Carolina. The question has, of course, no concern with the nature and character of the union of man and wife in a religious point of view. But regarding it (as a court of justice must do) merely as a civil contract, and deciding in what form it ought to have been celebrated in order to give the parties the legal rights of property which belong to the husband or the wife, and to render the issue legitimate, the Circuit Court held, and so instructed the jury, that if they believed that, before any sexual connexion between the parties, they, in the presence of her family and friends, agreed to marry, and did afterwards live together as man and wife, the tie was indissoluble even by mutual consent. (Jewell's Lessee v. Jewell, 42 U.S. 219, 233-34, 11 L. Ed. 108 (1843).)
So regardless of what a church may view as a marriage, a civil court in 1843 regarded it as a species of civil contract, which if expressed and witnessed in proper form would be regarded as indissoluble even by mutual consent.

O tempora! O mores! How have we fallen!

For now, on April 28, the wearers of the nine black robes of the Supreme Court will hear argument on these questions, in the case of Obergefell v. Hodges (linked with three other cases):
1) Does the Fourteenth Amendment require a state to license a marriage between two people of the same sex? 2) Does the Fourteenth Amendment require a state to recognize a marriage between two people of the same sex when their marriage was lawfully licensed and performed out-of-state?
The Fourteenth Amendment to the United States Constitution passed Congress in the years immediately following the Civil War. It requires all States to grant to their citizens the "equal protection of the law." What it historically meant is that there could not be one law for blacks and a different one for whites, for example. Since both were persons in the eyes of the law, the same voter eligibility requirements, the same transportation and travel accommodations, and (eventually) the same schools, had to be made available to both races alike.

The advocates for same-sex marriage have portrayed themselves as in the same situation as blacks trying to travel on a train, or get service in a hotel or restaurant. They ask: Why should marriage be between just two people of the opposite sex? And in doing so, they have convinced many of the secular courts to take up their cause.

The premise for their argument is that marriage is defined more as a (lifelong, but not always) relationship between two loving humans than it is a relationship between two who are one of each sex. Introducing the gender dimension into the equation makes the relationship exclusive and discriminatory, they say. Accordingly, laws and even constitutional amendments which limit marriage to two persons of the opposite sex must be struck down by using the "equal protection" clause of the Fourteenth Amendment.

These "equal protection" advocates are not bothered in the slightest by the circularity of their reasoning. If one defines "marriage" at the outset as "any committed relationship between any two human beings," then the definition includes the conclusion one wants to reach: that any two humans are entitled to marry.

Seeing marriage in the traditional way of the courts, as a civil contract, does not resolve the circularity either. The question is: a civil contract between whom? Two human beings, or two humans of the opposite sex? The courts do not allow humans below the age of eighteen to enter into binding contracts, so traditionally minors could not marry. But there are many "committed, loving relationships" today between teenagers. So why should they not be allowed to marry, too, regardless of their age?

I submit that if one's age has something to do with the essence of marriage, then so does one's sex. And in so saying, I am doing nothing more than upholding tradition. Throw away tradition -- throw out sex as a qualifier, and you have no rational basis for retaining age, either. And pretty soon the duality of marriage has to go overboard, too: why stop at a contract between just two people? Can't we have contracts between three or more?

But the U.S. Supreme Court will not address such questions until they are squarely presented in a case before it. It is not in the business of ruling on future cases. It changes the law one brick at a time, but what a change it makes! It is change for the country as a whole. And that is why the same-sex advocates rely on the courts to achieve their goal, rather than upon the popularly elected legislatures. If they can convince the Supreme Court to take away that brick, it is gone for once and for all, in all fifty States, at a single swipe. Legislatures can deal with only the bricks in their own State's walls, and winning State-by-State is an awfully cumbersome (and uncertain) process.

Otto von Bismarck once famously remarked that there were two things which no man should witness being made: one is sausages, and the other is legislation. Well, when it comes to the Supreme Court defining "marriage" for all fifty States, what we are witnessing is massive legislation on a nation-wide scale.

And it is not a pretty sight. Look at this link again. From that one page you can see listed, and have links to, every single brief filed with the Court since the case reached it last November. The bulk of the briefs from non-parties -- called "amicus curiae ['friend of the court'] briefs" -- have been filed just this month. There are nearly eighty of them!

Now look at the "amici" who actually filed the briefs. The ones that argue against redefining marriage can be counted on the fingers of one hand. More than ninety percent of the "friendly" briefs are from people and groups who want the laws against same-sex marriages struck down.

The latter include this particular amicus brief, filed by the Rev. Gay Clark Jennings, President of ECUSA's House of Deputies, and joined by Bishops White and Hahn of Kentucky; Bishops Gibbs,  Houghland, Ray and Ousley from Michigan; Bishops Hollingsworth, Bowman, Persell, Williams, Breidenthal, Price and Rivera from Ohio; and Bishops Johnson and Young of Tennessee, along with other denominations, groups and committees. Moreover, there is a list in Appendix A to the brief of nearly 2,000 priests, many of them Episcopal, who have joined in filing the brief as well. All say that they "support equal treatment for same-sex couples with respect to civil marriage" (Brief, p. 1; emphasis added.)

Now these I have mentioned are all bishops and clergy in the Episcopal Church. What business do they have touting their religious affiliation in endorsing the redefinition of civil marriage? Moreover, look at how -- from they very first page -- they disavow and undermine the very authority of any church to define what marriage is (emphasis again added):
While Amici come from faiths that have approached issues affecting lesbian and gay people and their families in different ways over the years, they are united in the belief that, in our vastly diverse and pluralistic society, particular religious views or definitions of marriage should not be permitted to influence which couples’ marriages the state recognizes or permits.
It is not enough for ECUSA's bishops and clergy to say that the Church's traditional definition of marriage is inadequate for "our vastly diverse and pluralistic society." Not only is that definition no longer serviceable to society at large, but also it should not even be "permitted to influence" what society thinks marriage is!

But if they truly believe what they write, then why do the bishops and clergy join the brief as bishops and clergy of ECUSA, instead of just as private civilians? Bishops and clergy should not seek to impose their religion-based views on secular society, right? Why then tout their titles, if not to pat themselves on the back for being so "broad-minded" as to endorse views at odds with their religion?

Moreover, who gave them permission to speak using the Church's name and offices, anyway?? It was just last year that the Presiding Bishop and several other bishops brought Title IV charges against the Communion Partner bishops and clergy -- the Quincy three and the Fort Worth ten -- for filing affidavits in the Quincy case and an amicus brief with the Texas Supreme Court. The charges were that they misrepresented the polity of the Church, and consisted only of a "minority view" (words which they were forced to acknowledge under duress of more severe punishment).

The official Book of Common Prayer used throughout the Episcopal Church solemnly declares that marriage is "between a man and a woman." Who are these righteous prelates who betray their ordination vows to profess publicly and without shame or apology a marriage doctrine that is contrary to, and that positively undermines, the only one authorized by Holy Scripture and currently recognized by the whole Church? General Convention supposedly offered experimental rites for same-sex blessings (which it had no authority to offer until the Prayer Book was officially changed). But when did General Convention authorize the Rev. Jennings and her episcopal colleagues to appear with all their trappings and titles to offer their experimental views to aid the secular courts?

I do not ever remember, when I was growing up, any bishops in ECUSA trying to influence courts or legislatures in favor of no-fault divorce. The Church addressed the issue only gradually (including through resolutions adopted over the years at Lambeth Conferences), and no small coterie of clergy organized to promote doctrine contrary to its then teaching. Yes, the Church changed the doctrine with time, but it did so at first very reluctantly -- and some (myself included) mark that apostasy as the beginning of the decline of the authority of church in Western society. By relinquishing control of the dissolution of marriage to the State, the Church next will relinquish control of marriage itself to the State. We will reap what earlier generations sowed for us.

Indeed, given the Supreme Court's simple observation in 1843 (quoted above) that a civil marriage contract was indissoluble, even with the parties' mutual consent, one has to say the Church is currently hastening the day when the concept of "marriage" will have been so expanded as to be meaningless: It will mean a relationship between any number of people of any age or gender who want to have a relationship for as long as they want to have one -- with maybe some pets thrown in for good measure. "Marriage" will thus follow "divorce" into meaninglessness, and will be so easy to enter into and to dissolve that churches will be superfluous.

When it happens, it will happen with the Church's active collaboration, as we are witnessing now before the Supreme Court. The brazenness of those Episcopal bishops and clergy in clothing themselves with the Church's ostensible authority is unfortunately of a piece with their self-defeating support for same-sex marriage. And it is also, in miniature, the problem we as a country have with nine (actually, just five) people in black robes who take it upon themselves to tell the rest of us how to define marriage.

The Court will issue its opinion in the Obergefell cases by the end of June. It will be another 5-4 Constitutional wreck of a decision, held together intellectually with band-aids and baling-wire, logically proceeding in an endless circle, and totally unworthy of the august institution from which it proceeds. It will be celebrated totally out of proportion to the number of people it directly affects, and hailed as another "milestone" of our "vastly diverse and pluralistic society."

With five Supreme Court justices and fifteen Episcopal bishops to light the way for us in their respective vestments, how could we ever go wrong? O brave new world, that has such people in it!

Friday, March 13, 2015

Obama and "Affordable Plumbing": a Parable

Only weeks after leaving office on Jan. 20, 2017, former President Barack Obama discovers a leak under his sink, so he calls Troy the Plumber to come out and fix it.

Troy drives to Obama’s new house, which is located in a very exclusive, gated community near Chicago where all the residents have a net income of way more than $250,000 per year.

Troy arrives and takes his tools into the house. He is led to the guest bathroom that contains the leaky pipe under the sink. Troy assesses the problem and tells Obama that it’s an easy repair that will take less than 10 minutes. Obama asks Troy how much it will cost. Troy checks his rate chart and says, “$9,500.”

 “What?! $9,500?!” Obama asks, stunned, “But you said it’s an easy repair. Michelle will whip me if I pay a plumber that much!”

Troy says, “Yes, but what I do is charge those who make more than $250,000 per year a much higher amount so I can fix the plumbing of poorer people for free. This has always been my philosophy. As a matter of fact, I lobbied the Democrat Congress, who passed this philosophy into law. Now all plumbers must do business this way. It’s known as the ‘Affordable Plumbing Act of 2014′. I’m surprised you haven’t heard of it.”

In spite of that, Obama tells Troy there’s no way he’s paying that much for a small plumbing repair, so Troy leaves. Obama spends the next hour flipping through the phone book calling for another plumber, but he finds that all other plumbing businesses in the area have gone out of business.

Not wanting to pay Troy’s price, Obama does nothing and the leak goes unrepaired for several more days. A week later the leak is so bad Obama has had to put a bucket under the sink. Michelle is not happy as she has Oprah and guests arriving the next morning.

The bucket fills up quickly and has to be emptied every hour, and there’s a risk the room will flood, so Obama calls Troy and pleads with him to return. Troy goes back to Obama’s house, looks at the leaky pipe, checks his new rate chart and says, “Let’s see, this will now cost you $21,000.” Obama quickly fires back, “What? A few days ago you told me it would cost $9,500!”

Troy explains, “Well, because of the ‘Affordable Plumbing Act,’ a lot of wealthier people are learning how to maintain and take care of their own plumbing, so there are fewer payers in the plumbing exchanges. As a result, the price I have to charge wealthy people like you keeps rising.

“Not only that, but for some reason the demand for plumbing work by those who get it for free has skyrocketed! There’s a long waiting list of those who need repairs, but the amount we get doesn’t cover our costs, especially paperwork and record-keeping. This unfortunately has put a lot of my fellow plumbers out of business, they’re not being replaced, and nobody is going into the plumbing business because they know they can’t make any money at it. I’m hurting too, all thanks to greedy rich people like you who won’t pay their ‘fair share’.

“On the other hand, why didn’t you buy plumbing insurance last December? If you had bought plumbing insurance available under the ‘Affordable Plumbing Act,’ all this would have been covered by your policy.”

“You mean I wouldn’t have to pay anything to have you fix my plumbing problem?” asks Obama.

“Well, not exactly,” replies Troy. “You would have had to buy the insurance before the deadline, which has passed now. And, because you’re rich, you would have had to pay $34,000 in premiums, which would have given you a ‘silver’ plan, and then, since this would have been your first repair, you would have to pay up to the $21,000 deductible, and anything over that would have a $7,500 co-pay, and then there’s the mandatory maintenance program, which is covered up to 17.5%, so there are some costs involved. Nothing is for free.”

“WHAT?!” exclaims Obama. “Why so much for a puny sink leak?!”

With a bland look, Troy replies, “Well, paperwork, mostly, as I said. And the internal cost of the program itself. You don’t think a program of this complexity and scope can run itself, do you? Besides, there are millions of folks with lower incomes than you, even many in the ‘middle class’, who qualify for subsidies that people like you must support. That’s why they call it the ‘Affordable Plumbing Act’! Only people who don’t make much money can afford it.

“If you want affordable plumbing, you’ll have to give away most of what you have accumulated and cut your and Michelle’s income by about 90%. Then you can qualify to get your ‘Fair Share’ instead of giving it.”

“But who would pass a crazy law like the ‘Affordable Plumbing Act’?!” exclaims the exasperated Obama.

After a sigh, Troy replies, “Congress… because they never bother to read what they vote on. They just vote for the idea, such as ‘affordable plumbing.’ ”

Wednesday, March 11, 2015

Dust-up in Fort Worth over All Saints

As I reported at the end of this post, Bishop Iker made an overture to the congregation of All Saints in the rump diocese to use the dispute resolution process of diocesan Canon 32 to reach a settlement as to which faction of All Saints parish would remain in control of the property. Well, the lawyers got hold of the proposal, and you can predict what happened: "Use Christian methods to resolve a dispute among Christians, as St. Paul directed us? No way! We prefer the secular courts, thank you!"

Here is Bishop Iker's initial letter to the congregation, and here is the response by ECUSA's (and the rump faction's) attorneys. Finally, here is the reply to the attorneys' letter sent by (as is required in such cases) Bishop Iker's attorney. Let me try to translate some of the legalese for the benefit of lay participants.

At the hearing on the motions for summary judgment, Judge Chupp took note of the Canon 32 dispute resolution process and suggested that the parties might follow it. According to the account at Bishop Iker's website:
During oral argument by attorney Frank Hill, who represented the plaintiff parishes, Judge Chupp decided to sever out the claims of All Saints’, Fort Worth, for a separate jury trial this spring. As an alternative, the judge urged Mr. Hill several times to opt instead for a settlement under diocesan Canon 32, which sets out a procedure to follow in cases where a parish wishes to separate from the Diocese. Though Mr. Hill expressed his belief that the Diocese would not have given the parish a favorable settlement at any time from 2008 to the present, the judge chided him, saying, “But you didn't even try.”
Now we learn from Mr. Leatherbury's response to Bishop Iker that Judge Chupp also suggested mediation, and that the attorneys discussed the name of a potential mediator. As frequently happens in these matters, mediation with that particular mediator was not acceptable to one of the two sides, and while the reply to Mr. Leatherbury by R. David Weaver does not propose a different mediator, it leaves open the possibility of mediation, and instead proposes first that the parties engage in some limited discovery as to the All Saints property issues.

(My understanding of this matter is limited to the court filings and to my sources, and I would welcome any contributions to the facts in the comments.) The Canons of the original Episcopal Diocese of Fort Worth allow  member parishes to form separate corporations, but under certain conditions. One such condition is that the parish corporation not take title to any real property in its own name, but that all real property of the parish be held in the name of the Diocesan corporation, as required by Art. XIV of the Diocesan constitution. All Saints is one parish in Fort Worth that had incorporated in 1953, while it was still in the Diocese of Dallas, and both it and its property moved to the Fort Worth Diocese when that entity came into union with General Convention in 1982.

My understanding is that Bishop Iker's diocesan corporation does hold title to the two parcels of real property on which the church and the main accessory buildings of All Saints are situated. However, the parish in the intervening years acquired several parcels of nearby property to make more room. Of these, three are held simply in the name of the parish itself, while one (used for a curate's home) was acquired in the name of the parish corporation, despite the provisions of Canon 31 linked above. (The church also uses another parcel about 7 miles away for "All Saints School." The school is run as a separate corporation, and its ownership of the property is not at issue in the lawsuit.) So when the dispute started, Bishop Iker offered to facilitate the use of Canon 32 to untangle which entity would take title to which pieces of property, and as I noted in my earlier post, the rump faction's attorney, Mr. Frank Hill, angrily rejected that overture. Moreover, under Mr. Hill's guidance, the parish proceeded to conduct a one-sided vote (from which all those who supported Bishop Iker were excluded by the requirement of a signed "loyalty oath") so it could claim it "overwhelmingly" had decided to remain in ECUSA.

Bishop Iker's latest request was thus simply an attempt to go back to ground zero, before Mr. Hill started drawing the battle lines, and to take the real pulse of the entire All Saints congregation in order to arrive at an amicable, Paulian-motivated settlement of the dispute. The rump faction at All Saints once again has spurned any such resolution -- acting, no doubt, in unity with ECUSA and its attorneys.

And so we see that little has changed, despite Bishop Iker's success in the underlying lawsuit. The attorneys have agreed on some procedures to expedite the resolution or trial, if necessary, of the All Saints case, and there remain still other matters which the parties can address by means of further partial summary judgment motions. No one seems to think that there are any material disputed facts.

The ECUSA parties have announced their intention to appeal Judge Chupp's decision, but all of these secondary issues have to be resolved first so that a final judgment can be entered, as I explained in the preceding post. Given the Supreme Court's prior rulings in the Fort Worth and San Angelo cases, however, I foresee little chance that any Court of Appeals will reverse Judge Chupp. If the Ft. Worth Court of Appeals affirms his decision, then there will be no reason for the Texas Supreme Court to grant review, and ECUSA will be left to its remedies with the United States Supreme Court -- which thus far has turned down every single Episcopal church property case it has been asked to review.

Let's review, then, where we are from the standpoint of just the All Saints case:

1. The deeds to the principal parish property are in the name of the diocesan corporation governed by Bishop Iker and his trustees. The parish corporation has title only to one parcel used as a curate's residence. The other parcels are held ambiguously, in the name of the parish (but which faction?).

2. The parish corporation, however, decided to remain with ECUSA -- after a vote whose outcome was strictly regulated from the start.

3. Meanwhile, the remainder of the congregation loyal to Bishop Iker organized as a separate parish, and is meeting in a separate building nearby each Sunday.

4. The trademark infringement lawsuits filed against Bishop Iker in Texas federal district court (including one brought separately by the rump All Saints parish) have each been dismissed by that court, based on the ruling by the Texas Supreme Court. Judge Chupp has yet to deal with the state-law trademark issues left in his case.

Given these starting points, it seems reasonable to anticipate that Bishop Iker and his diocese will retain the rights to the use of the name "Episcopal Diocese of Fort Worth," because all the Texas courts to date have recognized his corporation as the entity which has owned that name and its marks since its formation, and Judge Chupp's latest ruling held that neither ECUSA nor its rump group had any right to elect or control the officers and directors of that entity.

And that entity holds title to the principal portion of the All Saints property. It would seem, therefore, that this is a perfectly proper situation in which to invoke Canon 32. The parish corporation (controlled for now by the rump faction) could decide under that Canon, for instance, if it wanted to purchase its property from Bishop Iker's corporation and his loyal congregation. Or else it could agree to rent the buildings from them.

Given neutral principles, and the specific ruling that Bishop Iker's group effectively revoked the Dennis Canon as to its parish properties, I do not see how the All Saints parish corporation can prove it has any outright claim to the real property held by the Diocese, unless and until it shows that it also followed Texas law in deciding who should control the corporation. Then it might be able to convince a court that it is the entity for which the diocesan corporation holds the property in trust, and if so, the only question is whether any compensation should be paid. (In effect, the court would take the place of Bishop Iker in applying the provisions of Canon 32.)

If the parish congregation followed applicable Texas religious corporation law in holding the vote and in controlling who was entitled to take part, then control of the parish corporation (and its name) would remain with the rump group, even under Judge Chupp's latest decision. But if the vestry and rector of All Saints improperly excluded parishioners from voting on the basis of their alleged "disloyalty," then the vote itself was improper and could be set aside. The question will then turn on who should have been able to vote, under a proper neutral principles of law analysis.

And there the issue gets very murky indeed, because we are six years down the line from when the vote was held. How could a proper vote now be taken, even if the court were willing to supervise it? What happens to the people who were driven away by the dispute, and have joined other churches?  How does one treat the people who have joined each faction in the years since?

These are all good reasons why the secular courts are not the best vehicles to resolve church property disputes. It seems as though a settlement which divided up the parish assets might be a pretty good outcome under these circumstances. Let's hope that all the lawyering and posturing does not get in the way of good sense and Christian charity.  

Saturday, March 7, 2015

The Meaning of the Fort Worth Decision

The brief summary judgment order signed last Monday by Judge Chupp does not even begin to touch on the significance that lies behind it. Let me use this post as a vehicle to make its significance understandable to anyone who will take the time to read it.

The first thing to note is that the Order deals with "Motions for Partial Summary Judgment" (my emphasis). To understand what those words mean, first one needs to know what "summary judgment" is.

A judgment is the final decision of a court that ends a case -- whether after a jury trial, or a trial to just a judge alone (called a "bench trial"). Because the judgment is final (meaning the trial court cannot alter or change it once it is signed and filed -- except in certain trivial cases, to correct clerical errors), it is then subject to appeal, to the next higher tribunal. The higher court may then either affirm or reverse the judgment.

If the appellate court affirms the judgment below, it once again will become final after about thirty days or so (depending on the State), unless it is taken up by a still higher court, like the State's supreme court, or by the highest court in the land, the United States Supreme Court. Unlike a normal appellate court, however, those highest courts are not required to accept all requests to review a lower court's judgment -- review with them is discretionary. If they decline review, the judgment then really becomes final, and is unalterable by any court thereafter.

Because it comes at the very end of a case, a "judgment" wraps up all of the claims made on either side. It reduces them down to the ones as to which a remedy is granted (such as ordering a defendant to pay the plaintiff a sum of money, to compensate for an injury), and the ones on which relief is denied, perhaps because there was not evidence enough to support the claim, or perhaps because the claim was not well taken in the law, or for any number of other reasons.

When we speak of a "summary judgment", we mean simply a judgment that is entered without there having been a trial, which is why it is called "summary." The court reads the motions and supporting papers submitted by both sides, and if it finds that there are no genuine disputes over any material  issues of fact (i.e., that both sides essentially agree on what took place), then there is no need to impanel a jury. The court simply applies the law to the facts as demonstrated by the motions, and renders a summary judgment -- which may then become final in the same way that an ordinary judgment becomes final.

A partial summary judgment is one, then, that grants summary judgment, but only as to part of the whole case. Perhaps there were some claims raised by one of the sides that will require a jury to sort out the facts. The court cannot grant a summary judgment as to those issues -- while it is able to do so on the other claims in the case.

And that was what happened in the Fort Worth case. The parties each brought motions for summary judgment as to the issues of who controlled the diocesan corporation that owned all the real property, and whether or not there was any permanent trust imposed upon that property. As to those issues, Judge Chupp ruled that the trustees elected by Bishop Iker's diocese controlled the corporation, and that the corporation held its real property free and clear of any trust in favor of the national Church.

ECUSA and Bishop Iker each had additional claims against the other, however, which could not be resolved by summary judgment. For the most part, ECUSA alleged that Bishop Iker breached his "fiduciary duties" owed to the national Church, or converted property that was not his, or committed trespass, while Bishop Iker asserted claims against ECUSA for trademark infringement and damages.  These raised disputed questions of fact which would need to be tried before a jury. So ECUSA was not able to move for summary judgment as to its whole complaint; nor could Bishop Iker move for summary judgment on his whole complaint -- they both had to settle for motions for partial summary judgment, as to the facts that were undisputed, and as to just the claims that turned on those facts.

Now, however, that Judge Chupp has ruled in Bishop Iker's favor on the main claims, the lesser claims by ECUSA are, for all practical purposes, "moot" -- that is, they no longer matter to the outcome of the case. Because Bishop Iker is the rightful head of the diocesan corporation, then nothing he did with the corporation's property could ever amount to conversion, trespass, or breach of fiduciary duty. As just noted, however, there are still some claims to be tried on Bishop Iker's side. The judgment is only partial, and not final, as long as there are still claims which have not been resolved; an appeal may be taken only from a final judgment.

Judge Chupp's ruling is thus significant for a number of reasons:

1. For all practical purposes, it ended the case -- in favor of Bishop Iker and his co-defendants. There are still some claims for damages and trademark infringement, etc., reserved for another day.

2. It agreed with the Texas Supreme Court that "neutral principles of law" were to be used to decide the issues in the case, and that their application was not retroactive, since Texas courts had been applying neutral principles to church property disputes for a number of years already.

3. It decided that Bishop Iker and his co-trustees were the rightful officers and directors of the diocesan corporation -- not those people belatedly elected by the rump group that organized after Bishop Iker's diocese left the Church.

4. It decided that nothing in the national Church's Constitution or canons (bylaws) prohibited the Diocese from amending its governing documents so as to remove itself from the national Church, and realign itself with another denomination. The amendments it adopted were lawful, and not ultra vires ("beyond its powers").

5. It decided that the diocesan corporation held its property -- including that of all the individual Fort Worth parishes -- free and clear of any claims by either the national Church or its rump diocese.

6. And it decided that Bishop Iker's diocese, not the rump group, is entitled to call itself "the Episcopal Diocese of Fort Worth."

At the same time, Judge Chupp's order severed the case of the ownership of the parish property of All Saints, Ft. Worth, for a separate trial later this spring. He apparently did so because All Saints is a separate religious corporation under Texas law, and because it holds legal title to several parcels of property which it purchased in addition to the parcel on which the church building sits. There are some disputed issues of fact as to which faction of the original All Saints congregation is in control of the parish corporation, and hence of its real property.

At the hearing on the summary judgment motions, Judge Chupp asked why the parties had not applied Diocesan Canon 32 to the case of All Saints. That Canon provides in part:
Section 32.3 In the case of a controversy between a Parish and the Diocese, the Rector and a majority of the members of the Vestry may petition the Bishop, whose duty it shall be to seek to bring the parties to an amicable conclusion. To that end, the Rector and majority of the Vestry shall provide a reasonable opportunity for the Bishop, a diocesan chancellor and a member of the Standing Committee to meet on parish property with the entire Vestry and such members of the parish as wish to be present. Both verbal and written notice of the meeting must be provided to the members of the parish. It will be the duty of the Bishop to determine the extent to which the members of the parish agree with the Rector and majority of the Vestry. It shall also be the duty of the Bishop to make adequate provision in any resolution to protect the interest of the minority of the parish wishing to remain in union with the Diocese, and to protect the missionary interest of the Episcopal Diocese of Fort Worth. In the case where an agreement is reached, it shall be signed by the Rector and the Bishop and attested to by at least a two thirds majority of the members of the Vestry and at least a majority of the members of the Standing Committee...
Pursuant to Judge Chupp's suggestion, Bishop Iker recently sent out a letter to all members on both sides of the All Saints congregation, inviting them to a meeting to discuss how the parties -- without prejudice to their respective positions in the litigation -- might try to reach a resolution of their differences in accordance with the procedures and guidelines earlier given out for the application of Canon 32. These procedures and guidelines were followed in resolving three previous disputes with congregations about the ownership of parish properties.

Admittedly, the problem with All Saints is more complex, because the current group in de facto  control of the parish corporation did not exactly follow Canon 32's guidelines earlier, and indeed kept Bishop Iker out of the process. Now that the Court has decided that Bishop Iker and his trustees are the incumbents of the diocesan corporation, however, and given that that corporation holds legal title to the main parish property of All Saints, there should be an incentive on the part of both sides to seek an amicable resolution of their dispute. The meeting is called for next March 26, and what happens then will tell the tale.

Monday, March 2, 2015

ECUSA and the Freedom of Association: a Showdown Is Coming

Litigation between the Episcopal Church (USA) and its parishes has been ongoing for more than fifteen years. It is a myth to say that the Church did not start any of the lawsuits: you can read all of the dreary details in this post. The Church and its several Dioceses, in fact, are responsible for more than 90% of the cases that have been filed.

The first Diocese, however, did not vote to dissolve its union with General Convention until December 2007. Before that time, the cases all involved individual parishes that attempted to withdraw from their respective Dioceses. Thus, the All Saints Waccamaw case in the Diocese of South Carolina began in 2000 (it was not finally resolved until 2009). So also did the case of St. Andrew's, in Morehead City, North Carolina, which was finally decided in June 2003. The former was decided for the parish; the latter for the Diocese.

And that has pretty much been the story of the parish cases: mostly wins for ECUSA, with some occasional losses (particularly in those States which still adhere to the requirements of the Statute of Frauds, which requires that in order to create a legally binding trust in real property, there must be a trust instrument in writing that is signed by the actual owner of the real property).

The details, again, are all in the post linked before. By my count, 40 of the 91 cases listed resulted in legal victories at the trial or appellate level for ECUSA; just two parish cases (All Saints and the Good Shepherd San Angelo case in Texas) went the other way, but three of the five cases involving Dioceses resulted in rulings against ECUSA. A fourth diocese case (San Joaquin) is on appeal; the fifth one (Pittsburgh) gave a victory to ECUSA on the basis of a very strained reading of the effect of a stipulation between the parties.

It is a legitimate query to ask why the results of the parish cases are so lopsided in favor of ECUSA, while the results of the diocese cases go just the other way. For the parishes, most of the decisions turned upon explicit language in their own bylaws that made them "perpetually" subject to their Diocese and ECUSA. No such language exists in any of the Dioceses' governing documents, however. For the cases involving them, the explanation lies in the well-established freedom of association, which is a fundamental right enshrined in the First and Fourteenth Amendments to the United States Constitution. It holds that just as no one can be prevented by the government from joining a group, so also the group may not go to court to prevent a member from leaving it. "Freedom of association therefore plainly presupposes a freedom not to associate," as the Supreme Court put it in Roberts v. U.S. Jaycees, 468 U.S. 609, 623, 104 S. Ct. 3244, 3252, 82 L. Ed. 2d 462 (1984).

The liberals in ECUSA have a very difficult time trying to understand why their Church should be subject to such a doctrine. For them, the union between a Diocese and General Convention is an ecclesiastical one, and as such, they claim, civil courts should be precluded (by that same First Amendment!) from examining or questioning it in any way.

A moment's reflection will expose the flaws in that argument (not that ecclesiastical liberals ever pay any attention to logic or reason). ECUSA is, ecclesiastically speaking, a denomination -- but that says nothing about what it is in the eyes of the law. In order to sue or be sued in a civil court, for instance, ECUSA has to be a juridical person, not just an ecclesiastical one. Which is to say, it has a secular existence in the eyes of the law: it is, as noted here many times, an unincorporated association that was organized at common law in 1789, and not licensed or chartered by any one particular State. (On the other hand, ECUSA's corporate arm, the Domestic and Foreign Missionary Society, is a religious corporation chartered by the State of New York.) 

Ecclesiastically speaking again, ECUSA may make its own rules (called canons), which -- to the extent they are ecclesiatical -- may not be examined or countermanded in any civil court. But as a secular association, ECUSA is at the same time subject to the civil laws of each State in which it operates, as well as to the civil laws of the United States (to the extent they may apply to it). And one of those laws is the freedom of association guaranteed by the First Amendment.

What the First Amendment says is that as an association, ECUSA may not constitutionally restrict the rights of its members to associate or to disassociate. The most it can do, under the cases that have been decided to date, is require a member to pay any previously owed dues before recognizing his withdrawal. Thus for an organization like ECUSA which does -- not yet -- have any membership dues, there is nothing it can do in law to prevent a member diocese from pulling out, and associating (or realigning) with another denomination.

Speaking from an ecclesiastical standpoint, ECUSA may attach all kinds of ecclesiastical sanctions to the withdrawing member: it can refuse to recognize its clerical orders; it can ask other denominations not to recognize the member as an ecclesiastical body; and it can (but only symbolically) "depose" the withdrawing member's clergy, i.e., strike them from the rolls of its ordained ministers.

Other denominations, however, are just as free to do the opposite, so the effect of any such ecclesiastical sanctions may be limited. My main point stands: any unincorporated association, whether religious or secular, may not prevent one of its members from withdrawing (except temporarily, until back dues are paid). 

In some of their court filings, ECUSA's attorneys have argued that under the "freedom to exercise its religion" also guaranteed by the First Amendment, ECUSA may prevent dioceses unilaterally from withdrawing (without General Convention's consent). This is just the same old fallacious argument in another guise. ECUSA wants to have its cake and eat it, too: it wants to be able to go into court to claim the bank accounts and real estate of withdrawing members, but it does not want to incur the civil consequences of being a juridical person entitled to sue -- which means being subject to the general civil law.

Moreover, ECUSA has  never tried even ecclesiastically to place any limits on the ability of its member dioceses to withdraw. If there were any such language in the Constitution or Canons, it still could not be enforced in a civil court, due to the First Amendment, so its practical effect would be useless.

These points are very plain and straightforward. Yet ECUSA is spending tens and tens of millions of dollars on fighting against them in the courts. And do you know what any reasonable attorney could predict? Simply this: given the jurisprudence on the freedom to associate, ECUSA's arguments, such as they are, will lose every time.

So why is it spending so much money on a futile legal dispute? Ah, that is the question. Whenever someone who is as wealthy as ECUSA is spends so much on an uphill legal battle, which it has no rational hope of winning, the motive has to be simply to hope to win by outspending one's opponent. Make it so costly for them that they will just fold their tents and walk away from all their property.

The strategy did not work in Illinois. And it has not worked to date in Fort Worth or South Carolina; I have little difficulty in predicting it will not work in San Joaquin. The decision in Fort Worth has just come out, and confirms what I wrote above; the one in South Carolina (affirming the trial court's ruling) is at least a year away; and the one in San Joaquin is probably eighteen months to two years away. But at the end of it all, ECUSA will lose, and lose big -- especially after having spent so much money.

And, really -- it couldn't happen to a nicer bunch of people. Watch this entire issue be swept under the rug at the coming General Convention -- watch them approve the next triennial budget without allowing any discussion (let alone itemization!) of more than $40 million in litigation costs. Watch 815 hide its head in the sand as it is presented with an order to pay still more millions of dollars to Bishop Lawrence's diocese to reimburse it for its attorneys' fees. Watch for the same thing to happen again in Texas. They must know what is coming, but they will not publicly acknowledge it.  

That is precisely why ECUSA and 815 will deserve what is bound to happen.