Protecting Religious Liberty from Class Actions?

When people think of threats to religious liberty, class action lawsuits are not usually at the top of the list. But an ongoing suit in federal court in Washington, D.C., threatens to turn this into a significant issue. The D.C. Circuit — the appellate court with jurisdiction — has had the chance to press the brakes on this, but so far, it has declined to do so. Now that court has a second chance to address the issue. It should take the opportunity.

The case in D.C. pits a former parishioner against the Roman Catholic Church in a dispute about a religious donation. For hundreds of years, that church has taken up donations directly to the Vatican. These are known as “Peter’s Pence.” It started when a man named David O’Connell in Rhode Island donated to the church in the Peter’s Pence collection, only to decide later that he regretted doing so. He brought suit, arguing that he had been deceived into donating. According to his court filings, he said that he believed that the donation was to be for charitable causes such as direct aid to the poor and needy. Rather, he alleges that a significant portion of the funds donated go to longer-term church investments or to support church administrative expenses. In his view, none of this should count as charitable. O’Connell filed a lawsuit. The goal is not just to recover O’Connell’s money. It is also to certify a potentially enormous class of individuals who donated in recent Peter’s Pence offerings and disagree with how the church used the money. All of them seek a judicial finding that the church deceived them.

The problem, though, is that a court would have to decide a religious issue in order to make that kind of decision. It would have to decide who is right about what counts as charitable (as I explained at more length elsewhere). This is a religious question. Different religious traditions and different individual religious leaders can and do have different views about how to think wisely about when to spend for short-term humanitarian aid and when to invest in longer-term infrastructure for the good of the church. A court can’t step in without weighing in — with the authority of the state — on one side or the other of this dispute. And this, the First Amendment will not allow.

The problem right now is that the district court declined to decide the First Amendment issue at this point. And as a result, the case will go on. And here, the process is the punishment for the church.

To see what’s at stake, imagine litigation involving churches as a multi-act play. As I explained to the D.C. Circuit in an amicus brief I submitted supporting the church, Act I is the prelude to conflict, where seeds of discord are sown — disagreement about church donations, in this case. Tensions and disputes outside the courtroom create the conflicts that lead to the legal drama to follow. As the curtain rises for Act II, legal proceedings begin. It is here that the religious institution (a church here, but it could be a synagogue, or religious school) is typically sued. It’s the defendant, defending itself against the lawsuit. In our American constitutional system, its first line of defense is often the First Amendment, which courts have long recognized protects religious institutions like churches from the government (including the courts) meddling in their decision making about religious matters and their self-governance. When this First Amendment principle, known as “church autonomy,” applies, the court can and should dismiss the lawsuit. The outcome of Act II is pivotal; if the church autonomy doctrine applies, then Act III transitions to a quiet resolution, with the church moving forward without further judicial scrutiny of the underlying religious dispute. The plaintiff, of course, can immediately appeal if the doctrine was incorrectly applied, and an appellate court can ensure the case goes forward.

However, if the doctrine is incorrectly applied in the other direction — and the court says that the church does not get any protections — then, absent an immediate appeal, Act III becomes an extended and costly legal battle. It potentially puts courts in the constitutionally untenable position of interfering with religious matters and deciding matters of religious doctrine and church governance. That is true even where courts are not actively engaged with the merits of the underlying religious dispute. Because in litigation, the process itself — discovery, depositions, trial — can be the punishment.

In this litigation about church donations, the church raised a church autonomy defense at an early stage of the litigation (a motion to dismiss). But the district court said that the case should go forward anyway and that it would apply the First Amendment principles at the back end, so as to avoid imposing liability on the church if the matter turned out to be too deeply implicated with religion. How it could possibly not be intertwined with religion, the court failed to recognize.

On appeal, the church asked the D.C. Circuit to correct the district court’s decision. This is a straightforward case for the application of church autonomy doctrine. Unfortunately, the D.C. Circuit has said that it won’t look at the matter now. Rather, it says that this should be considered only at the end of the case.

To be fair, the appellate court’s concern is that it doesn’t want to have to review every little piece of litigation one at a time. Most of the time, for most issues, it’s fine to wait until everything is done in the district court and then review all issues together in the appellate court. The appellate courts don’t want a bunch of separate appeals. All understandable concerns.

But in a handful of cases, it’s necessary to have sooner access to appellate review. That’s where particular rights are at stake about the litigation process itself. For instance, when a state is sued, it has the ability to assert sovereign immunity — that as a sovereign state, it is immune from being sued. If a district court makes a mistake and allows such a case to proceed when it should not, the sovereign’s immunity won’t be worth anything because it is precisely to protect it from litigation itself that it applies. The only way to protect this right is to allow early appeals about the applicability of this issue.

The same principle ought to apply with churches. The D.C. Circuit’s mistake was to fail to recognize that it is judicial review of church’s religious decisions and internal self-governance that is itself a First Amendment problem. Waiting until the end of the litigation is not a solution, because by that point, church decisionmakers and religious issues will be subjected to the interference of litigation. We’ve seen this in other cases, as I described in my amicus brief. This case promises to be even more intrusive because it is a class action, putting at issue potentially thousands or millions of individuals’ donations -- and the decisions of many people in church leadership about how to spend money, how to evaluate immediate humanitarian needs and long-term church infrastructure, and much else. Letting class action lawyers harry clergy about this for extended proceedings will be the result of letting this case proceed. And this is precisely why it’s important that the court reviews the case early in the proceedings.

The church has asked for a rehearing by the full court, so now the D.C. Circuit has a second chance to protect religious liberty. Let’s hope the court takes it.