Key point 6-03.1. Church members generally have no right to inspect church records unless such a right is conferred by state nonprofit corporation law, a church's charter or bylaws, state securities law (if the church has issued securities), or a subpoena. Church records enjoy no privilege against disclosure, with the exception of documents that are protected by the clergy-penitent privilege under state law.
A Texas court ruled that the first amendment did not bar the civil courts from enforcing the rights of church members to inspect the records of an incorporated church.
A church member (Tim) made a written request through his attorney to examine and copy some of his church's financial records. Tim made the request pursuant to the Texas Nonprofit Corporation Act, which contains the following provision regarding the authority of members to inspect corporate records:
Each corporation shall keep correct and complete books and records of account and shall keep minutes of the proceedings of its members, board of directors, and committees having any authority of the board of directors and shall keep at its registered office or principal office in this State a record of the names and addresses of its members entitled to vote.
A member of a corporation, on written demand stating the purpose of the demand, has the right to examine and copy, in person or by agent, accountant, or attorney, at any reasonable time, for any proper purpose, the books and records of the corporation relevant to that purpose, at the expense of the member.
Initially, the church agreed Tim could examine and copy the requested records; however, prior to the date he was to inspect the records, the church's pastor sent Tim a letter advising him that the church could not comply with his request.
Tim filed a lawsuit against the church, alleging a violation of the Nonprofit Corporation Act. The church asked the court to dismiss the lawsuit on the basis of the "ecclesiastical abstention doctrine" which bars the courts from intervening in internal church disputes involving governance issues. The trial court granted the church's request and dismissed the lawsuit. Tim promptly appealed.
A state appeals court began its opinion by explaining the ecclesiastical abstention doctrine:
Under the ecclesiastical abstention doctrine, civil courts may not intrude into the church's governance of religious or ecclesiastical matters, such as theological controversy, church discipline, ecclesiastical government, or the conformity of members to standards of morality. In addition, courts should not involve themselves in matters relating to the hiring, firing, discipline, or administration of clergy. The relationships between an organized church and its ministers are considered a church's "lifeblood" and matters involving those relationships are recognized as "of prime ecclesiastical concern." Nevertheless, acknowledging that churches, their congregations, and hierarchy exist and function within the civil community, they can be as amenable to rules governing civil, contract, or property rights as any other societal entity. Therefore, a state may adopt an approach, including neutral principles of law, for resolving church disputes that do not involve consideration of doctrinal matters. Under such an approach, a court may interpret church documents in purely secular terms without relying on religious precepts in resolving the conflict. If an issue cannot be determined without resolving a religious controversy, a court must defer to the resolution of the doctrinal issue by the authoritative ecclesiastical body. Often, however, the difficulty arises in determining whether a particular dispute is "ecclesiastical" or simply a civil law controversy in which church officials happen to be involved. To resolve the question, courts must look to the "substance and effect of a plaintiff's complaint to determine its ecclesiastical implication, not its emblemata."
In the trial court, Tim sought an order declaring and enforcing the parties' rights under the Nonprofit Corporation Act. Tim argued that as a nonprofit corporation incorporated under the Act, the church was required to maintain books and to make them available to its members. The church insisted that the disclosure of its financial records was a matter of internal ecclesiastical governance, reasoning that because the pastor decides when disclosure is appropriate, it is an ecclesiastical matter.
The court concluded that Tim's request to inspect church records, pursuant to the Nonprofit Corporation Act under which the church was incorporated, "did not involve any religious doctrine or precept. Resolution of the dispute does not require that we intervene in the hiring, firing, discipline, or administration of the church's clergy, nor that we address the conformity of members to the church's standards of morality, or any other matters traditionally held to involve religious doctrine. Further, we are not being called upon to interpret any church constitution, bylaws, or other governing documents. In fact, there are no documents in the record indicating how or by whom the church is governed. Moreover, we are not asked to decide matters relating to the hierarchical or congregational nature of the church."
The court noted that courts in other states had reached a similar conclusion that the first amendment does not bar the civil courts from enforcing the rights of church members to inspect church records if such a right is granted by the state nonprofit corporation law under which the church is incorporated. It specifically referenced two cases. In the first case, the Louisiana Supreme Court ruled that "the underlying first amendment principles, which protect against entanglement of civil courts in questions of religious doctrine, polity, or practice, are not offended by the judicial enforcement of a statute requiring a church, as a non-profit corporation, to keep at its registered office, corporate records for examination by its voting members." Bourgeoise v. Landrum, 396 So.2d 1275 (La. 1981). In the second case, a New York court concluded that a church's first amendment rights were not violated by inspection of its records because the questions involved were not concerned with internal ecclesiastical or religious issues, but only secular ones. Watson v. Christie, 732 N.Y.S.2d 405 (2001).
The Texas court agreed with the conclusions reached by the Louisiana and New York courts in similar cases. It concluded, "By incorporating under the Act, the church has become amenable to the provisions of that statute. The trial court was merely called upon to uphold the plain language of the Act and ensure Tim was allowed access to the church's books and records in accordance with the statute. This judicial function does not jeopardize the ability of religious organizations to establish religious doctrine or develop their internal rules and regulations, nor does it implicate secular interests in purely ecclesiastical matters; therefore, first amendment principles are not offended. We find Tim's request to review the church's records merely requires the trial court to enforce a neutral principle of law."
The court conceded that "a dispute may arise regarding the church's finances should Tim be allowed access to its records," however, "the issue now before us cannot be resolved based upon what may happen. The trial court dismissed Tim's claims for lack of jurisdiction relying upon the ecclesiastical abstention doctrine. Because under these circumstances the court is not required to involve itself with any religious doctrine or principles, we conclude the trial court erred in dismissing Tim's lawsuit on the basis that it lacked jurisdiction."
What this means for churches
This case illustrates a very important point. Church leaders often wrestle with the question of whether or not to honor requests by members to inspect various kinds of corporate records. In most states, members of churches that are incorporated under the state nonprofit corporation law have a legal right to inspect specified corporate records for a "proper purpose." This case illustrates that this requirement is not a mere technicality that is disregarded by the courts. Members demanding to inspect church records have the burden of establishing a proper purpose for their request. Obviously, deciding whether or not a member has met this burden can be a difficult question in some cases. A local attorney should be consulted if there is any doubt.
Lacy v. Bassett, 132 S.W.3d 119 (Tex. App. 14th Dist. 2004).