Owning Church Property

Abstract

Theological disputes between local congregations and national or international denominations have given rise to legal disputes over who owns religious property. Church splits often occur when a smaller faction of a denomination breaks away from the larger whole, typically after irreconcilable differences on larger social issues. Doctrinal differences have generated three major waves of cases -- first over slavery, then over integration and ordaining women and LGBTQ clergy, and most recently over same-sex marriage. There is a continuing need to clarify the best approach to resolving property disputes after church breakaways. The lack of consistency among courts calls out for guidance from the U.S. Supreme Court, but the Court has denied certiorari in church schisms more than a dozen times in the past two decades.

This Article explores the primary approaches courts use to resolve church property disputes when a local church breaks away from a larger denomination. First, the deference approach, approved by the Court in Watson v. Jones (1871) to resolve church splits during the Civil War, binds a local congregation to the orders and judgments of the larger religious organization. Second, the “neutral principles of law” approach, authorized by the Court in Jones v. Wolf (1979), allows courts to use ordinary principles of property, trust, and contract to resolve church property disputes.

A majority of states adopted the neutral principles approach, but they have done so using either a “strict” neutral principles approach or a “hybrid” neutral principles approach. The strict neutral approach looks only to state law and not national religious documents in attempting to resolve disputes amongst national and breakaway organizations. In contrast, courts that use the hybrid neutral approach consider national religious documents when determining how best to resolve property disputes. This Article argues that the “hybrid” neutral principles approach includes deference to the national denomination in a hierarchical organization, where local churches have benefited from association with national organizations and cannot operate in opposition to national governing documents. The “hybrid” approach is superior to a “strict” approach, which subverts religious organizations’ autonomy in favor of state law doctrines.

Not only does this Article offer reasoning for why the “hybrid” neutral approach is best suited for resolving religious property disputes, it also analyzes the impact that the political ideology orientation of state courts, whether conservative or liberal, has on favoring breakaway factions over national church reforms that address mainstream social issues. Most importantly, the Article demonstrates the confusion that has followed from the Court’s First Amendment jurisprudence where neutrality is the standard. Recent Court decisions in Hosanna-Tabor Evangelical Lutheran Church & School v. EEOC and Our Lady of Guadalupe School v. Morrissey-Berru have rejected using neutral laws to resolve religious disputes by ignoring Jones v. Wolf and attacking Employment Division v. Smith.

Elevating state common law doctrines above a national denomination’s authority over its leadership, organizational structure, and assets, denies religious freedom and autonomy. Further, the “strict” neutral approach goes against the precedent established for nonreligious organizations with similar structures, such as fraternal organizations. The U.S. Supreme Court should clarify Jones v. Wolf and require courts to give deference to the governing documents of national denominations in church property disputes involving breakaway factions. States should be able to choose whether to apply deference or neutral principles of state law when deciding who owns church property, but States should not ignore church governance documents by applying a “strict” neutral principles approach.

Keywords: church property, neutral principles approach, religious property