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The U.S. Supreme Court allows Local Churches to keep their Property in Religious Property Disputes

In a huge blow to the Episcopal Church, and an enormous threat to the United Methodist Church, the United States Supreme Court today denied the final appeal of the Episcopal Church in its dispute concerning ownership of religious property with the Episcopal Diocese of Fort Worth, Texas. The list of cases denied by the Supreme Court included  All Saints’ Episcopal Church v. The Episcopal Diocese of Fort Worth, 20-534, The Episcopal Church v. The Episcopal Diocese of Fort Worth, 20-536  and Schulz v. Presbytery of Seattle, 20-261.

When religious organizations divide into factions, local church property becomes the central point of contention. Religious property disputes are decided by balancing federal constitutional claims, based upon the First Amendment Establishment and Free Exercise clauses, and individual state trust, property and corporate laws. This is what the United States Supreme Court’s envisioned when it created the “neutral principles of law, developed for use in all property disputes,” in Jones v Wolf.  The neutral principles approach is intended to be “completely secular in operation” and “rel[y] exclusively on objective, well-established concepts of trust and property law familiar to lawyers and judges.”  The Court opinioned that by applying neutral principles, substantial constitutional benefits would occur that is, neutral principles “promises  to free civil courts completely from entanglement in questions of religious doctrine, polity, and practice.”

The application of the “neutral principals” to religious property disputes by state courts in the ensuing 40 years has been mixed, at best. As of this writing, one state court defers to hierarchy, ten states have not addressed courts have not determined how religious property disputes are to be addressed, and the rest of the states apply either “strict neutral principals” or a “hybrid” approach that combines “neutral principles” with “hierarchal deference” of church canons order denominational constitutions for certain religious organizations. when evaluating religious property disputes. This has left a considerable amount of confusion over how to approach religious property disputes and as a result, a local church that is part of denomination in one state can leave the denomination and keep its property, while other local churches in the same denomination cannot retain their property when they leave. That is why it is critical to know the historical background of the law involving religious property and the application of “neutral principals of law,” by each state prior to planning out a response to disaffiliating from a denomination.

The three cases squarely presented to the Court the issue of left open by the Court in Jones v. Wolf, which, allows each state to determine how it would address religious property disputes. In Jones v. Wolf, the Supreme Court held that state courts could adjudicate such cases by applying “neutral principles of law” to determine through the examination of property deeds, statutes, and church corporate records to whom the properties belong. In the two Fort Worth cases, the Texas Supreme Court  ruled in favor of the diocese against the national Episcopal church and their local allies, using neutral principles of law to award ownership of the properties. In Schulz, the  Washington Court of Appeals deferred to the Presbyterian Church USA. The denial of the writ means no further legal avenues exist for the national Episcopal Church in its bid to regain ownership of the Fort Worth diocese properties, leaving the unanimous ruling of the Texas Supreme Court as the final word on the issue.

The attorneys at Dalton & Tomich have a considerable amount of experience in religious property disputes throughout the United States. We would welcome the opportunity to work with your local church to preserve your ministry and protect your property in a denominational dispute. Learn more here and contact Daniel Dalton to help guide your church to independence.

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