• A California appeals court refused to enforce a denomination's binding arbitration procedure for resolving disputes with affiliated churches. A local Assemblies of God church in California voted in 1989 to disaffiliate from the denomination as a result of bylaw amendments adopted by the Southern California District Council of the Assemblies of God (the "District"). The church interpreted these amendments to adversely affect the sovereign rights of affiliated churches and allow the District to confiscate local church property at any time it chose. The District insisted that the church agree to arbitrate the dispute regarding the disaffiliation. It relied on the following arbitration provision in the District's bylaws:
Any controversy or claim between any District Council member church … or any member or officer … for which either party may have a cause for legal action shall be submitted to binding arbitration by a panel of three arbitrators: one to be selected by the member church … [or] member or officer; one to be selected by the District Council … ; and one to be selected by the two previously selected arbitrators. Each arbitrator shall be selected from the panel of arbitrators elected in accordance with the bylaws.
To qualify as an arbitrator, the District bylaws require that an individual "be an ordained minister … [and] member in good standing in the District [who] has been so for at least two consecutive years … [and] who has been active and cooperative with the District … and is current with his financial responsibilities to the District." The local church refused to arbitrate the dispute, and the District filed a petition with a civil court to compel arbitration. The church opposed the District's petition, contending that the District's arbitration clause was not enforceable since it required arbitration of disputes by "non-neutral arbitrators." The trial court agreed with the church, and the District appealed.