Court Barred by First Amendment from Resolving a Dismissed Minister’s Terminated Retirement Benefits

Key point. Breach of contract claims by dismissed ministers, no matter how meritorious, cannot be resolved by the civil courts if doing so would require an interpretation of religious doctrine, or involves a claim that a decision by the highest ecclesiastical tribunal of a hierarchical denomination did not comply with the church's laws and regulations.

A federal appeals court ruled that it was barred by the First Amendment religion clauses from resolving a dismissed minister's claim that a denominational pension board acted improperly in terminating his retirement benefits pursuant to denominational rules when he was "defrocked" and ceased to be a minister in good standing.

An ordained minister (the "plaintiff") began collecting benefits in 2009 after fulfilling the three conditions identified in his human resource manual for eligibility: (1) he had remained as a member in good standing of the denomination, (2) completed 10 years of full-time paid service for the denomination, and (3) had reached or exceeded retirement age.

The plaintiff's retirement benefits were terminated for not "remaining as a member of good standing of the denomination" after being defrocked and dismissed from the denomination. The plaintiff sued the denomination, claiming that the termination of his retirement benefits constituted a breach of contract and a violation of the denomination's covenant of good faith and fair dealing. A federal district court ruled that the lawsuit turned on an "interpretation of what constitutes a 'member in good standing' under denominational rules of governance, custom, and faith" and any ruling by the court would violate the religious freedom guaranteed by the First Amendment.

A federal appeals court affirmed the trial court's dismissal of the case. The court observed:

The [trial] court correctly dismissed the lawsuit. A dispute involving the application of church doctrine and procedure to discipline one of its members is not appropriate for secular adjudication. The plaintiff's claims, which were predicated on his defrocking, his excommunication, and the termination of his retirement benefits due to a "theological disagreement" would have required encroachment into matters of church dogma and governance. Based on "the separation of church and state principles required by the … First Amendment … the [trial] court could not interfere with the purely ecclesiastical decisions of the [denomination] regarding the plaintiff's fitness to serve in the clergy or to remain a member of the denomination.

Civil courts may apply neutral principles of law to decide church disputes that involve no consideration of doctrinal matters, but the plaintiff's lawsuit required examination of church doctrine and polity. His claims … turned on whether he was entitled to retirement benefits. And his entitlement to retirement benefits was conditioned on, among other things, that he remain as a member in good standing of the church. As the trial court stated, it could not "define 'member' for a specific church or denomination … because that would require defining the very core of what the religious body as a whole believes." Likewise, to determine if the plaintiff had remained in good standing, the trial court explained, it would have had to "scrutinize documents related to church rules and discipline and … apply its interpretation of those rules to the plaintiff's conduct. In other words, the court would have had to determine whether [the denomination] exercised its religion in accordance with the doctrine, faith, custom, and rules of governance" of the church. Because the plaintiff's claims required an examination of doctrinal beliefs and internal church procedures, the trial court had no power to entertain his controversy with the denomination.

The court noted that the plaintiff's claim that the denomination breached its implied covenants of good faith and fair dealing also would require review of a decision about internal church governance. The plaintiff alleged that he had been defrocked, excommunicated, and had his retirement benefits cancelled in violation of church procedural rules and the process afforded other ministers. But, the court noted, the United States Supreme Court issued a ruling in 1976 "prohibiting civil courts from undertaking an inquiry into whether the decisions of the highest ecclesiastical tribunal of a hierarchical church complied with church laws and regulations." Serbian E. Orthodox Diocese v. Milivojevich, 426 U.S. 696 (1976). Such an inquiry by a civil court "would undermine the general rule that religious controversies are not the proper subject of civil court inquiry, and that a civil court must accept the ecclesiastical decisions of church tribunals as it finds them."

In conclusion, the plaintiff "sought review of the procedures that resulted in ecclesiastical decisions and necessitated a review of religious law and practice, which is exactly the inquiry that the First Amendment prohibits civil courts from undertaking."

What this means for churches

This case illustrates the view of many courts that breach of contract claims by dismissed ministers, no matter how meritorious, cannot be resolved by the civil courts if doing so would require an interpretation of religious doctrine, or, as in this case, involves a claim that a decision by the highest ecclesiastical tribunal of a hierarchical denomination did not comply with the church's laws and regulations. 719 Fed.Appx. 926 (2018).